Hospital Pharmacy - October 2019 - 283

867665
research-article2019

HPXXXX10.1177/0018578719867665Hospital PharmacyGabay

Rx Legal

The Orphan Drug Act: An
Appropriate Approval Pathway
for Treatments of Rare Diseases?

Hospital Pharmacy
2019, Vol. 54(5) 283-284
© The Author(s) 2019
Article reuse guidelines:
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https://doi.org/10.1177/0018578719867665
DOI: 10.1177/0018578719867665
journals.sagepub.com/home/hpx

Michael Gabay1

Abstract
The Orphan Drug Act provides financial incentives to pharmaceutical manufacturers to develop treatments for rare diseases
affecting limited patient populations. Since passage of the Act in 1983, the U.S. Food and Drug Administration (FDA) has
approved more than 600 orphan drug indications from greater than 450 distinct drug products. The annual number of orphan
drug designation approvals has increased significantly in the recent past with much of this increase driven by approval of
secondary indications for previously approved treatments. This recent increase has led to concerns regarding the Act as
some pharmaceutical manufacturers have reaped outsized financial benefits while avoiding the regulatory requirements and
costs associated with nonorphan drug development.
Keywords
drug information, legal aspects, education
In 1983, President Ronald Reagan signed the Orphan Drug
Act into law. The purpose of this Act is to encourage pharmaceutical manufacturers to develop treatments for individuals with rare diseases.1-3 In the United States, there are
approximately 7000 rare diseases, defined as either illnesses affecting <200 000 individuals or conditions that
affect >200 000 individuals, but for whom manufacturers
are not expected to recover drug development costs.1,4
These diseases affect an estimated 25 to 30 million people,
of which >50% are children.1 In return for investment in
rare disease drug development, manufacturers receive an
orphan drug designation on U.S. Food and Drug
Administration (FDA) approval with associated incentives
including tax credits, a waiver of user fees, and 7 years of
marketing exclusivity.5 Since passage of the Orphan Drug
Act, the FDA has approved more than 600 orphan drug
indications from more than 450 distinct drug products compared with only 10 such product approvals in the decade
prior to enactment.
Notably, the largest annual numbers of orphan drug designation approvals have occurred in the recent past (20142017),2,5 with 39% of drugs and biologics approved by the
FDA in 2017 conferred an orphan designation.6 A significant proportion of this increase is driven by approval of
secondary indications for previously approved treatments
not unique molecular entities developed specifically for a
rare disease.2 The increase in orphan drug development
and approval is beneficial for the treatment of diseases
affecting limited patient populations. However, concerns

regarding the Orphan Drug Act have recently arisen leading to investigations of the approval process and potential
future revisiting of the language within the law.3,7,8
In March 2017, Republican Sens. Orrin Hatch, Chuck
Grassley, and Tom Cotton requested that the Government
Accountability Office (GAO) investigate the orphan drug
program after a Kaiser Health News investigation suggested
that the program was "being manipulated by drug makers to
maximize profits and to protect niche markets for medicines
being taken by millions."8 This investigation revealed that
FDA reviews of orphan drug applications were inconsistent
and often incomplete, particularly regarding 2 specific criteria: the number of patients that would potentially benefit
from the drug product and whether scientific evidence
existed indicating that the medication actually treated the
rare disease. In some cases, it appeared that FDA reviewers
simply trusted whatever information the sponsor provided
rather than investigate claims independently, which could
potentially lead to orphan approval and associated benefits
without sufficient regulatory scrutiny.
Beyond the GAO investigation, others have expressed
concerns that the recent exponential increase in successful
orphan drug designations under the Act may adversely impact
1

The University of Illinois at Chicago, USA

Corresponding Author:
Michael Gabay, College of Pharmacy, The University of Illinois at Chicago,
833 S Wood St, Chicago, IL 60612, USA.
Email: mgabay@uic.edu
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