Report Examines Pros, Cons of Orphan Drug Status

The Orphan Drug Act (ODA) has spurred the development of treatments for rare diseases, such as Lambert-Eaton myasthenic syndrome (LEMS), according to a recent report.

Yet, patient advocates say that a better balance between development incentives and competition might benefit the rare disease community.

The report, “Orphan Drugs in the United States: An Examination of Patents and Orphan Drug Exclusivity,” was commissioned by the National Organization for Rare Disorders (NORD) and conducted by Avalere Health, a business consulting firm.

Prior to the ODA’s passing in 1983, the U.S. Food and Drug Administration (FDA) approved 38 orphan medications. From 1983 to July 2020, that number grew to 599. At the time of this study, 552 of those were on the market.

Further underscoring the law’s impact, 75% of current orphan drugs are approved to treat only a single rare disease, meaning that in many cases one of the orphan medications is the only approved therapy for that condition.

“More than nine out of 10 orphan products on the market today would never have been developed without the Orphan Drug Act,” Peter Saltonstall, president and CEO of NORD, said in a press release. 

ODA incentives helped drugmakers develop Firdapse (amifampridine) and Ruzurgi (amifampridine) for the treatment of LEMS, for instance. Firdapse is approved for patients ages 17 and older, while Ruzurgi is indicated for those ages 6–16.

The report found that orphan drug designation has helped several medications become available for rare diseases, while also bolstering their market protections.

The study also found that 37 (7%) orphan products first won approval for a more common illness and later for an orphan indication. Additionally, 154 medications that were approved originally for a single rare condition ended up being cleared to treat multiple rare disorders later on.

Although having two rare disease indications is not entirely uncommon, few products (64, or 10%) have three or more indications.

Although 552 orphan drugs are currently available in the market, including some for multiple conditions, approved therapies for rare disorders remain a largely unmet medical need, accounting for approximately 5% of these disorders.

Because orphan drug status carries with it a seven-year period of marketing exclusivity, in which generic formulations cannot come into competition with it, approved therapies that later gain orphan drug status for new indications can win market protection exceeding their original 20-year patent lifespan.

The study found, for instance, that orphan drug exclusivity outlasted a product’s patent life in 61 cases (11%), and a compound’s patent life exceeded orphan drug exclusivity in 125 cases (22%).

At the time of the study’s publication, 158 orphan medications were eligible for competition from generics or biosimilars (generic forms of biological medications). Such competition existed, however, for only 81 (51%) of these products.

Of the 394 orphan drugs not eligible for generic or biosimilar competition, 80% were protected by patent life and 20% by orphan drug exclusivity.

Although these market protections create a lag in access to more economical treatment options, they also fulfill ODA’s intent of providing inventors with effective incentives to invest “the massive amount of time, effort, and capital required to bring a drug to market,” which, the report states, is estimated at near $1 billion.

While the report acknowledges the need for incentives such as those the ODA provides, NORD also argues that government could work to find a way to better balance both innovation and competition.

“The vast majority of people with rare diseases still have no treatment,” Saltonstall said, “and we need government to provide a framework that helps patients by encouraging the development of innovative therapies, and spurs competition after a reasonable amount of time.”