Life Science Compliance Update

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April 06, 2017

Senators Ask GAO to Investigate Potential Orphan Drug Act Abuse

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In a March 3, 2017, letter to the United States Government Accountability Office, Senators Orrin Hatch, Chuck Grassley, and Tom Cotton raised the idea that regulatory or legislative changes might be needed to “preserve the intent of this vital law” that gives drug makers lucrative incentives to develop drugs for rare diseases.

The letter notes that, “[w]hile few will argue against the importance of the development of these drugs, several recent press reports suggest that some pharmaceutical manufacturers might be taking advantage of the multiple designation allowance in the orphan drug approval process.”

The senators ask for a list of drugs that have been approved or denied orphan status by the Food and Drug Administration (FDA), also asking whether resources at the FDA have been able to keep up with the “number of requests” from drug makers and whether there is consistency in the department’s reviews.

The senators also expressed concern about patients, saying in their letter that “we feel it is important to include the patient voice in your review.”

Few senators are in a position to alter the law. However, the three authors of this letter are in such a position. Hatch, a longtime advocate of the rare disease community, said late Monday in a statement that there was little evidence to suggest the Orphan Drug Act needs to change.

Hatch is chairman of the Senate Finance Committee, which oversees 50 percent of the federal budget, including Medicaid and Medicare spending. He said the letter is requesting “the first GAO study exclusively reviewing the Orphan Drug Act, and such oversight will ensure those critical innovations are continued into the future.”

Grassley, the senior senator from Iowa, chairs the Judiciary Committee and has jurisdiction over anti-competitive and patent-related issues. Grassley last month announced an inquiry into the Orphan Drug Act in response to KHN’s investigation.

Cotton, a strong conservative voice, chairs the subcommittee on economic policy under the committee on banking, housing and urban affairs. In a floor speech last month, he announced that he would find a legislative solution to price hikes associated with the orphan drug program.

Kaiser Health News Investigation

This letter comes on the heels of a January investigation published by Kaiser Health News (KHN) that found the orphan drug program is being manipulated by drug makers to maximize their profits and protect niche markets for particular medicines.

Recently, orphan drugs have come under fire (along with the rest of the industry) for high prices. The investigation by KHN found that many drugs that now have orphan status are not entirely new – more than seventy were drugs that were first approved by the FDA for mass-market use. Others (roughly numbering eighty) are drugs that have received multiple exclusivity periods for two or more rare conditions.

Marathon Pharma Hikes Emflaza Price

Senators have been incensed by actions taken by Marathon Pharmaceuticals, manufacturer of Emflaza, a corticosteroid approved to treat Duchenne muscular dystrophy. Marathon recently announced an $89,000 annual list price for the drug, which many U.S. patients have purchased overseas for $1,000 to $1,600 a year.

Marathon responded in February by delaying the rollout of the drug, saying it will talk with stakeholders, including patients, about the price.

Eight senators sent a letter to Marathon CEO Jeff Aronin demanding information on the private drug maker’s pricing strategy. Marathon spokeswoman Wanda Moebius released a statement saying the company is committed to ensuring that all patients who need this drug have access to it and will continue to work with the Duchenne community.

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