Rare disease day with the logo showing multiple hands

With Rare Disease Day approaching Feb. 29, it’s a good time to take stock on how far treatment of these indications has come and what the future holds for one hotly contested piece of legislation.

The FDA closed 2015 with 42 orphan drug approvals, which are needed to treat the estimated 25 million to 30 million Americans are afflicted by 6,800 rare diseases. Since the inception of Orphan Drug Act in 1983, the FDA has approved close to 550 orphan drugs with 2014 being the strongest for orphan drugs with 49 approvals. Although 2015 saw an increase in the number of orphan drug designation requests, the approval rate declined.

In the past few years an acute interest in this highly incentivized market has been witnessed among pharmaceutical companies. The market is trending towards projected worldwide sales of around $176 billion by 2020, according to one report.

The future of the orphan drug market will be influenced, in part, by whether the 21st Century Cures Act becomes law. In July 2015, the House of Representatives passed the bill, but it faces an uphill climb in the U.S. Senate this year. If implemented, the legislation would bring about major changes in the U.S. pharmaceutical landscape. It aims to increase funding to National Institutes of Health (NIH) and improve access to drugs for patients. The U.S. government has faced immense pressure from patient support groups and associations to encourage innovation and faster approvals of life-saving drugs. The act would aid the pharmaceutical industry with faster FDA approvals and relaxed regulations while being of some help to patients with faster access to drugs.

A provision in this act grants an extra six months of exclusivity to already approved drugs being repurposed for a rare disease for all of their indications. Some healthcare experts believe that this discourages innovation and breakthrough research in orphan drugs and the availability of generics for common diseases. FDA approval regulations for orphan drugs are in general relaxed due to lack of evidence and natural history studies. A seven-year market exclusivity in the U.S., along with 50% tax credit on Research & Development costs and faster approvals, are stimulants for major pharma companies to invest in this sector which yields an almost double return on their investment versus non-orphan drugs. Eculizumab (Soliris), a highly expensive drug used to treat paroxysmal nocturnal hemoglobinuria, a rare blood disease, sells for $17,000 per vial. Alexion Pharmaceuticals invested $1 billion in developing this drug which generated a revenue of $2.6 billion in 2015 alone for the company.

However, the legislation has drawn some criticism. Opponents claim that the Act unnecessarily adds to these incentives instead of streamlining the approval process. A John Hopkins research argued that pharmaceutical companies are taking advantage of the orphan drug approval process and adding billions to their bottom line by exploiting the ambiguous clauses in this process.

Experts point to a feature in the act, which they argue encourages approval of drugs based on clinical experiences on therapeutic use, historical data and uncontrolled observational studies as opposed to rigorous clinical trials.  They maintain that these stipulations would lead to approval of ineffective and potentially unsafe treatments behind the façade of accelerated access to drugs and thus putting the long term health and safety of patients at risk. Moreover, observers claim that implementation of the 21st Century Cures Act would result in increased healthcare spending in the US which has already sky rocketed in the past few years.

Sen. Lamar Alexander, Chairman of the Health, Education, Labor and Pensions (HELP) Committee, indicated that instead of an extensive bill which was passed by the House of Representatives, the HELP Committee would look at smaller sections of legislation one by one. On Feb. 9, 2016, the HELP Committee passed seven uncontroversial bills with bipartisan support. NIH funding is where senators are in disagreement, which could affect the final outcome.

How this conflict is resolved will go a long way to determine how industry can help and profit from treating this vulnerable population.

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