Recognizing that drug companies would actually incur a financial loss in developing important drugs for rare conditions, Congress passed the Orphan Drug Act in 1983. The Act offers incentives to induce companies to develop drugs and other medical products for the small markets of individuals with rare disorders, defined as diseases affecting fewer than 200,000 people in the U.S. Have these incentives worked?
This past week, FDA Law Blog ran some interesting analytics on orphan drug designations and approvals over the past year which suggest the answer is “Yes.”
Mostly using data culled from FDA’s Orphan Drug Designations and Approvals database, the article’s author Kurt Karst found that 2014 was a groundbreaking year for the number of orphan drug designations received by the Office of Orphan Products Development (OOPD), the number of designations of granted, as well as the number of orphan drugs ultimately approved.
The numbers revealed some big leaps in all three categories:
In 2014, records were shattered for all three metrics, with an astounding 467 designation requests (a nearly 35% increase over 2013), an astonishing 293 orphan drug designations granted (a nearly 13% increase over 2013), and a whopping 49 orphan drug approvals (a 53% increase over 2013).
We wrote in January that 2014 had been a big year for pharmaceuticals all around--the FDA approved 41 new medicines in 2014, the most since 1996, when the agency approved a record 53. FDA approved 27 in 2013. The jump can largely be attributed to many new drugs for orphan diseases.
Karst also provides interesting insight on the impact of the Orphan Drug Act on other drugs. “[S]uccessful program breeds copycats,” notes Karst. “We’ve seen that with the creation of orphan drug programs in other countries modeled after the Orphan Drug Act.” He also points to new U.S. initiatives modeled after the ODA, including the Generating Antibiotic Incentives Now Act (“GAIN Act”) (FDC Act § 505E), and the Dormant Therapies Act provisions included in the draft 21st Century Cures Act.
The American Pharmacists Association looked closely at the upswing in specialty drugs in January. “In 2012, specialty drug spend accounted for approximately $87 billion, or about 3.1% of national health spend in the United States,” APhA states. “In 2020, the forecasted specialty drug spend is expected to be $400 billion, or about 9.1% of national health spend.” Furthermore, analysts predict that 7 of the top 10 drugs in terms of sales will be specialty products. Looking ahead to 2015, the pipeline is again forecasted to have a high number of approvals in oncology, as well as immunology and rare diseases.
Impact on contract research organizations (CROs): Outsourcing Pharma ran a related story this week titled Orphan drug boom comes with a steady stream of outsourcing. They noted that CROs saw a parallel rising share of rare and orphan drug trials. Furthermore, “nearly a quarter of respondents said they outsource between 91% and all of their orphan drug/rare disease trials.” The article indicates that hundreds more orphan trials are still ongoing.