Sen. Grassley Opens Inquiry Into Orphan Drug Act

Sen. Charles Grassley (R-IA) on Friday confirmed to Focus that he is gathering more information and discussing with his staff and interested parties a possible inquiry into the Orphan Drug Act’s abuses leading to high drug prices.

“Based on the reporting from Kaiser Health News [KHN] about how the orphan drug provisions appear to be stretched beyond their original intent, and the strong consumer concern about high drug prices, I'm interested in learning whether the unanticipated uses of the provisions are contributing to high prices for commonly used drugs,” Grassley said in an emailed statement to Focus. “My staff is meeting with interested groups and other Senate staff to get their views on the extent of the problem and how we might fix it. I also continue to work on other ways to help bring down drug prices, such as increasing competition with available products.”

Grassley’s comment follows a KHN investigation from January detailing how the incentives created by the Act’s provisions have led to more than 200 companies bringing almost 450 orphan drugs to market since the law took effect in 1983. The incentives are for diseases affecting fewer than 200,000 individuals in the US per year and include seven years of market exclusivity, tax credits for clinical trial expenses, user fee waivers and federal grants.

Dr. Gayatri Rao, director of the FDA’s Office of Orphan Products Development, told KHN that she would look into the investigation and pointed out that the “repurposing” of drugs does have scientific and patient benefits.

“We always talked about how we permit the second bite of the apple, third bite of the apple, as one small way to incentivize repurposing,” Rao told KHN, noting that industry and patient groups have been pressing the FDA for more incentives. “Now, all of sudden, it seems like, wow, this practice may be driving up prices.”

In 2015, researchers at Johns Hopkins called for reforms to the Act, saying loopholes have allowed drug companies to skirt its intent by taking advantage of its incentives for non-orphan conditions.

An article in PLOS Medicine in early January also noted: “Orphan-designated drugs to treat biomarker-defined subsets of common conditions have a number of characteristics that make them ill-suited to the orphan drug designation, including short development times and rapid expansion of off-label indications after approval. Application of the Orphan Drug Act in these cases risks wasting resources that might be better focused on truly rare conditions.”

According to data from EvaluatePharma, "7 of the top 10 projected worldwide best selling drugs in 2015 have an FDA-approved orphan indication."

Potential reforms to the Act cited by the Hopkins researchers include: A stratified benefit system with tiers for diseases affecting fewer than 20,000 patients, 20,000 to 100,000 patients and 100,000 to 200,000 patients; decreased exclusivity periods when benchmark profits are achieved; and decreased benefits for drugs that reach a larger target disease population.