The Orphan Drug Program

BPI Contributor

September 1, 2008

4 Min Read

It’s been a quarter-century since the Orphan Drug Act became law in 1983. An orphan drug is any therapeutic, vaccine, or blood product that treats a rare disease or condition (one with fewer than 200,000 US patients). Such drugs may be new products or those already approved for other diseases but discovered to treat a rare disease. Drug sponsors must apply for orphan drug designation through the US FDA (1). Similiar status may be obtained in Europe through the EMEA’s Committee on Orphan Medical Products.

25 Years of Success

Originally introduced by Republican senator Nancy Kassebaum (KS) and Democratic representative Henry Waxman (CA), the Orphan Drug Act of 1982 was cosponsored by several members of both parties in Congress. But it really came about as a result of hard work by founders of the National Organization for Rare Disorders (NORD, Since the drug was signed into law in 1983 by then-president Ronald Reagan, about 1,700 drugs and biologics have been designated as orphan drugs.

Orphan drug designation provides a company with several incentives to encourage it through the expensive process of developing drugs for small patient populations: seven years of market exclusivity, a 50% tax credit to cover the costs of clinical research, opportunities for grant funding to cover certain clinical testing expenses, assistance in clinical research study design, and a waiver of PDUFA filing fees.

“In the 10 years before the Orphan Drug Act was signed into law, only 10 new drugs were developed for rare diseases,” said Jim Greenwood, president and CEO of the Biotechnology Industry Organization, at BIO 2008 in San Diego, CA, this past June. “In the past 25 years, the FDA has approved more than 300 drugs to treat orphan diseases.” Those successes include Amgen’s Epogen injection (epoetin alfa), which treats anemia in transplant patients, and Genentech’s Pulmozyme product (dornase alfa for inhalation), which treats cystic fibrosis.

Tim Cote is director of the FDA’s Office of Orphan Product Development. He describes rare diseases as “individually infrequent, but collectively common,” which NORD backs up by listing some 6,000-7,000 known rare diseases in the United States alone. These include epidermolysis bullosa (EB), a genetic skin disorder that affects an estimated 100,000 people, many of them undiagnosed; and tyrosinemia, a hereditary metabolic disorder with fewer than 75 identified patients in the country.

Toward Personalized Medicine

The Orphan Drug Act was born about the same time as the biotechnology industry itself. And Cote says that the law has created much opportunity for young biotech companies over the past 25 years. “Big Pharma’s” blockbuster mentality has kept it less interested in the program, so “Little Bio” is disproportionately well represented among the list of approved orphan drugs. Sure, biotech companies (and their investors) are just as interested in blockbuster profits as anyone else. However, smaller companies need less money to get by — and sometimes orphan drug earnings can fuel further development of other drugs.

Additionally, some orphan drug research could translate to therapies with wider applicability. My friend Kim Luty, who has EB and has been active in promoting awareness of the disorder, wonders, “Could research into treatment of certain forms of EB ultimately help burn patients (e.g., wounded soldiers)?”

Another relevant trend has appeared during this past quarter-century of biotechnology. The growing science of pharmacogenomics is slowly pushing the pharmaceutical industry away from blockbuster drugs and toward personalized medicine. Genentech’s Herceptin treatment is the oft-touted example — a breast cancer drug that works only in patients with a certain genetic marker. In the future, orphan drugs could conceivably move from the exception to the norm.

“Egregious” Prices?

On 28 July, FDAnews reported that part of the congressional inquiry into drug pricing has focused on orphan drugs. Senator Amy Klobuchar (D-MN) said that “at least a handful of drug companies have used the status of orphan drugs to keep increasing costs well beyond the costs of research, development, and manufacturing.” She singled out Ovation Pharmaceuticals for increasing the price of its Indocin IV product from $100 to $1,875 over the years, as well as Questcor Pharmaceuticals for increasing the price of corticotrophin from ∼$1,600/vial to $23,000/vial (2). It’s not hard to imagine that, as their seven-year exclusivity expires, companies need to raise their prices to counter the loss of market share to competitors. And over the years, of course, inflation figures in. How much that explains the situation is up for debate — like so much of the pricing issue is. But the increased visibility of this highly successful program will increase scrutiny on the companies that take part in it. It’s estimated that 90% of rare diseases are treated by off-label drug uses, which are not covered by Medicare/Medicaid because the indications are listed compendially.

Want to share your experiences with the Orphan Drug Act? Contact our editor in chief, Anne Montgomery.


1.) Legislation Relating to HUDs/HDEs, US Food and Drug Administration, Rockville.

2.) 2008. Lawmakers Lambaste Drugmakers for ‘Egregious’ Prices. FDAnews Drug Daily Bull 5.

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