And we don’t mean “Little Orphan Annie” from children’s folklore. We are talking about billions of dollars big pharma earns by using a very liberal interpretation of very well intended 1980’s legislation named the Orphan Drug Act.
The pharmaceutical industry historically avoided spending large sums of money on research to produce drugs for diseases that affected a rather small number of American’s.
The Orphan Drug Act was signed into law by President Reagan in 1983 to address this tragic need. A company developing an orphan drug was given patent protection for a full seven years along with a guarantee no competing drug would be approved during that time. Since then, more than 200 companies have brought more than 450 drugs to market to treat or cure diseases. The FDA defines a rare disease as one that affects 200,000 or fewer patients. This is a very broad definition, which includes millions, but the legislation was aimed at far smaller groups. Typical of the original intention was drug development for diseases like Duchenne Muscular Dystrophy, Phophsplatsia an inherited bone disease for infants, and Idiopathic Pulmonary Fibrosis (IPF) a debilitating and ultimately fatal disease. These and other diseases affect so few, it was not profitable for drug research because the market for the drug was small. The legislation provided financial aid for this research and it has been phenomenally successful.
Kaiser Health News describes the process this way, “When a drug maker wins approval of a medicine for an orphan disease, the company gets seven years of exclusive rights to the marketplace, which means the FDA won’t approve another version to treat that rare disease for seven years, even if the brand name company’s patent has run out. The exclusivity is compensation for developing a drug designed for a small number of patients whose total sales weren’t expected to be that profitable.”
Often times, a drug was approved through the normal process without reference to the Orphan Drug Act. It was later found to be effective for a rare disease and was then repurposed, renamed and reclassified as an orphan drug. Example of this is the regularly approved drug Harvoni which was then repurposed four times to create the drugs Humira, Enbrel, Lantus and Remcade. Three of these are classified orphan drugs and advertised on TV. They have collectively produced $17.9 billion in revenue. In fact, seven of all top ten selling drugs today are orphan drugs.
The abuse can arise when the research firm sets the pricing for these orphan drugs. It is not uncommon to see pricing that is several thousand dollars per month for the very rare diseases, and there is no viable alternative. A second unseemly profit is earned by the research firm returning to the FDA seven years later with yet another use of the same drug, thus getting orphan status a second or third time for the same drug. Gleevec, an approved cancer orphan drug has been repurposed seven more times. Botox was originally approved for painful muscle spasms in the eye and now has three additional orphan drug approvals.
In 2003, Ten years after the legislation passed, there were ten orphan drugs approved, but that has now grown to almost 50 per year.
Big Parma is using this legislation to research and produce life savings drugs that probably would not have been available without the Orphan Drug Act. They deserve to be compensated and make a profit. However, they should not be abusing the legislation through the repurposing of the drugs. This is abuse through a loophole that is not within the spirit of the Orphan Drug Act.