Orphan drug incentives reviewed at BIO

Regulatory NewsRegulatory News | 09 June 2020 |  By 

Orphan drug designation has been a fruitful pathway for drug development, but unmet need remains. Whether changes are needed to the legislation, and how orphan drug research can incorporate patient-focused drug development principles and make room for modern-day collaboration were topics for expert discussion at an orphan drug-focused session during BIO Digital 2020.
The future looks bright for drug development for rare diseases, said session moderator Natasha Bonhomme. However, said Bonhomme, chief strategy officer for Genetic Alliance, Washington, “We know that still for many – and really most – who have an orphan disease or rare disease, they’re still waiting for treatments. We know that there continues to be the investment from all stakeholders, but the waiting persists.”
The Orphan Drug Act has been in place since 1983, said James Shehan, chair of FDA regulatory practice at Lowenstein Sandler PC, New York. He reviewed the history of the act and looked forward to challenges and proposed changes to the legislation.
Since its inception, the definition of an orphan drug hasn’t changed, said Shehan, but, “Since the passage of the act there’s been a steady rise in products that are designated by the FDA as orphan drugs and that ultimately are approved and reached the market.” Now, over 7,400 orphan drug designation requests have been submitted with 503 drugs, with some drugs receiving approval for multiple orphan indications. Most of the drugs – 78%, said Shehan – only have orphan indication approvals.
Orphan drugs have accounted for 40-50% of FDA approvals over the last several years, with an increase in rate of sales approximately double that of non-orphan drugs. The global orphan drug market is projected to reach $250,000,000 by 2024, or about 20% of global prescription drug sales.
“Over time, people have talked about changing the orphan drug law in various ways,” said Shehan. Questions have arisen about the scope of exclusivity, when a product follows after an orphan drug and approval for the later product hinges on a demonstration of greater safety or efficacy, but those disputes “tend to be confined to the particular facts of that case,” said Shehan.
More broadly, a 2018 Government Accountability Office report examining the orphan drug process found a lack of consistency in the review of products for orphan designation; for example, reviewers would vary in how they assessed whether the number of people affected by a condition fell below the 200,000 mark. Shehan said that the agency also found that although many approvals were being given, “more could be done to bring rare disease drugs to market.” (RELATED: GAO raises questions on FDA’s orphan drug designation process, Regulatory Focus 30 November 2018).
He noted that the Tax Cuts and Jobs Act of 2017 reduced the orphan drug tax credit from 50% to 25% of the applicable cost.
Some have criticized the law by noting that although the orphan drug designation was not originally intended for profitable products, there are now “plenty of examples of commercial success,” said Shehan. A proposal floated by some would lower the number of affected patients from the current threshold of 200,000 patients in the US. Also in discussion is a model where products would have to show that they are not profitable. “But none of those proposals have really gone forward,” he said.
On the other side of the coin, he said, are patients with rare diseases and their advocates, who see the success of the law as an incentive to develop rare therapies. These advocates point to the large number of diseases which remain without effective treatments.
Laura Clague, chief financial officer for Retrophin, Inc., said that patient-informed research and meaningful collaborations with patient groups is key to achieving her company’s mission.
“In the biotechnology ecosystem, patients tell us what is needed. FDA guides us on science and regulations, but eventually the decision to invest in rare disease clinical research takes place in the boardroom,” said Clague. “Right now, life science companies all across the country are deciding or are on the verge of deciding whether or not to invest in a clinical trial, one that would likely provide hope to patients who sorely needed.”
Clague cited the statistic that 95% of rare diseases currently do not have an FDA approved treatment, so “the stakes are very high.” She noted though the bottom line is within her purview in her role as chief financial officer, “The decision to go forward with rare disease research or pass on it is not only about numbers.”
Clague said her firm incorporates the patient voice early in the drug development process, an important adjustment that lets researchers garner firsthand information about rare diseases, which may be poorly characterized at the beginning of the development process. The paucity of data is often a given in developing therapies for rare diseases, noted Clague, adding that the 21st Century Cures Act, among other initiatives, has helped spur such collaborations along.
“The reality is that capital is finite,” said Clague. The amount of funding available for small companies such as hers will not support limitless exploration of potential therapies. “This is where incentives including the orphan drug tax credit come into play,” she said, adding that the tax credit, along with other incentives, “helped shape the boundaries for our financial capabilities to support programs, a critical aspect of good governance in the boardroom. If it weren’t for the [tax credit], fewer of these programs would be able to move forward,” she said, calling the halving of the tax credit that occurred with the tax reforms of 2017 “unfortunate.”
Though exact numbers are not yet available, Clague said that forecasts and financial decisions are being affected by the tax credit reduction. She called for support of a bipartisan bill that would reinstate the 50% tax credit for orphan drug designation and increase rare disease surveillance by the US Centers for Disease Control and Prevention.
“Incentives should reflect today’s efforts and potential contributions to society,” said Clague, with the caveat that “focusing solely on tax policy incentives misses the bigger picture.”  She exhorted Congress to incentivize patient-focused drug development and public-private collaboration. “These efforts help us make leaps in our discovery that none of us could do on our own.”



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Tags: FDA, orphan drugs, US

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