Companies abuse orphan drug designation, team says

Although the reasons for this boom in orphan drugs are likely multifactorial, the exploitation of the orphan drug act is an important catalyst behind this trend, the authors say.

Because orphan designation guarantees a 7-year exclusivity deal to market the drug and protects it from generic competition, the price tags for such medications often balloon rapidly.

For example, the drug imatinib was initially priced at $30,000 per year in 2001. By 2012, it cost $92,000 a year.

The drug’s original designation was for chronic myelogenous leukemia, and it would therefore treat 9000 patients a year in the US. Subsequently, imatinib was given 6 additional orphan designations for various conditions, including gastric cancers and immune disorders.

Dr Makary says, in essence, the exclusivity clause guarantees a hyperextended government-sponsored monopoly. So it’s not surprising that the median cost for orphan drugs is more than $98,000 per patient per year, compared with a median cost of just over $5000 per patient per year for drugs without orphan status.

Overall, nearly 15% of already approved orphan drugs subsequently add far more common diseases to their treatment repertoires.

Dr Makary and his colleagues recommend that, once a drug exceeds the basic tenets of the act—to treat fewer than 200,000 people—it should no longer receive government support or marketing exclusivity.

This can be achieved, the authors say, through pricing negotiations, clauses that reduce marketing exclusivity, and leveling of taxes once a medication becomes a blockbuster treatment for conditions not listed in the original FDA approval.

They say such measures would ensure the spirit of the original act is followed while continuing to provide critical economic incentives for truly rare diseases.