Orphan Drug Approval Laws

Excerpt

In 1983, the United States Congress passed the Orphan Drug Law Act (ODA), which incentivized pharmaceutical companies to develop drugs aimed specifically at treating rare diseases. Orphan drugs, or those that treat rare diseases, are referred to as such because prior development efforts may have been abandoned or "orphaned" due to a lack of funding or interest in drug development. The act offers tax credits, a waiver of the Prescription Drug User Fee, and extended market exclusivity options to participating drug developers.

The Food and Drug Administration (FDA) qualifies a rare disease as one which affects fewer than 200,000 people or as a condition that affects greater than 200,00 persons in the United States but for which there is no reasonable expectation that pharmaceutical companies will recover the costs incurred during drug development following pharmaceutical sales. In the United States, between 6,000 and 8,000 diseases meet this condition, affecting an estimated 25 million people. Despite the large number of individuals affected by rare diseases, pharmaceutical companies have been reticent to focus their efforts on drug development for these conditions. They believed that they would not feasibly recover the development costs.

This industry-wide decision originated from an amendment made to the Federal Food, Drug, and Cosmetic Act due to the increase in thalidomide-related congenital disabilities seen in the 1950s and subsequent decades. The amendment, known as the Kefauver-Harris amendment, effectively increased the cost of drug development for all pharmaceutical companies, thus shifting the collective focus to developing drugs for larger, generalized populations. This shift effectively excluded certain populations with rare diseases and severely limited drug treatment options for these patients.