The 1983 U.S. Orphan Drug Act (ODA) was designed to promote the development of drugs that demonstrate promise for the diagnosis, prevention or treatment of rare diseases1
. The definition of what constitutes a rare disease varies by country but includes any disease that affects less than 200,000 individuals in the United States2
. There are currently approximately 7000 rare diseases listed on the National Instititute of Health’s (NIH) Office of Rare Diseases website, affecting an estimated 25–30 million people within the United States3
, most of these rare diseases are genetic and many are neurological. Approximately 250 new rare diseases are described each year4
, and with advances in genetics many more common disorders will be subdivided into genetically distinct “rare” diseases.
The 1962 Kefauver-Harris amendment to the Federal Food, Drug and Cosmetic Act mandated that all drugs must be demonstrated to be safe and effective by adequate, well-controlled studies prior to receiving marketing approval5
. This amendment was prompted by the thalidomide-induced birth defects in the 1950s and 1960s. Although the amendment aimed to protect the public, it increased the cost of drug development. As a result, the pharmaceutical industry focused on large target populations, thus “orphaning” individuals with rare diseases. In an attempt to encourage pharmaceutical companies to develop orphan drugs the ODA was signed into law by President Reagan in 1983, followed by similar legislation in Japan, Australia and Europe6
. ODA incentives exist to encourage sponsors. In the United States, tax incentives include a 50% tax credit for development costs, with a 20 year carry forward and one year retrospective arrangement7
. In addition, Food and Drug Administration (FDA) fees for review of the application for marketing are waived ($1.2 million in 2009)8
. Federal grants are available for academic investigators and companies studying orphan drugs under the FDA orphan product designation (OPD) grants program; approximately $14 million is awarded among 10–15 new grants annually9
. Probably the biggest incentive for sponsors is the 7-year market exclusivity awarded from the date of FDA approval. During this period the FDA cannot approve a new or generic drug application for the same product for the same indication.
The ODA succeeded in encouraging sponsors in developing drugs for rare diseases. In the decade prior to the ODA, only 10 drugs were approved for rare diseases. In the 28 years since 1983, 367 drugs have been approved10
: a twelve-fold increase. Forty five of the orphan drugs approved have resulted from the Orphan Grants Program (out of over 500 studies funded). However, there is debate as to whether this increase came about purely as a result of the ODA, described by some as “one of the most successful US legislative actions in recent history”11
. Over the same time period there has been a major increase in public and private investment in pharmaceutical research and development; major advances in science and technology have occurred. Other US legislation incentivized the pharmaceutical industry by increasing patent times and market exclusivity12
, and small businesses were encouraged with the use of NIH funded grants13
. Changes to the FDA review procedures resulted in reduced times to drug approval and prevented distribution of unapproved drugs. In addition, improved patient education, growth of patient advocacy groups and the widespread use of the internet have resulted in an increased demand for orphan drug development.
The U.S. government and Congress maintain an active interest in promoting development of orphan products. The recent Patient Protection and Affordable Care Act imposed an annual fee (based on sales) on any company manufacturing or importing branded prescription drugs14
The Preserving Access to Orphan Drugs Act of 2011 is currently referred to the Subcommittee on Health by Congress to exclude orphan product sales from the calculation of this fee15
. A further Medical Innovation Prize Act has been referred to Senate committee by Congress; this Act establishes a fund (funded by health insurers) to reward research and development of drugs, biologics or manufacturing processes, specifically mentioning orphan diseases16
In this article, we highlight issues of emerging concern to neurologists, using the examples of tetrabenazine, adrenocorticotropic hormone (ACTH) and Myozyme/Lumizyme to illustrate our concerns.