While the number of drugs approved for rare diseases has increased significantly since the passage of the Orphan Drug Act of 1983, questions linger about whether is connected with innovation in treatments for rare diseases, especially given the fact that patent protection for new products often extends well beyond the 7 years granted to orphan drugs.
The Orphan Drug Act of 1983 provides incentives for drug makers to develop therapies targeting rare diseases, primarily by instituting 7-year exclusive marketing rights for rare disease indications that achieve FDA approval. While the number of drugs approved for rare diseases has increased significantly since the Act’s passage, questions linger about whether the incentive is connected with innovation in treatments for rare diseases, especially given the fact that patent protection for new products often extends well beyond the 7 years granted to orphan drugs.
A new paper, published in Health Affairs, examines the degree to which the Act’s grant of 7 years of exclusivity has protected manufacturers’ investments in developing drugs by assessing the interaction of orphan drug exclusivity with patent terms for small-molecule drugs approved between 1985 and 2014. Researchers also assessed the availability of generic competition for those therapies.
Drawing from the FDA’s records, the research team found that the FDA approved 160 small-molecule drugs with at least 1 rare disease indication as of 2017, and 146 of these drugs had an orphan designation at the time of market entry.
In considering all type of patents, 72% of these products had 1 or more patents listed in the FDA’s Orange Book, the last patent of which expired a median of 16 years after the drug’s approval. Within each successive 10-year period in the study’s date range, a smaller percentage of drugs had orphan exclusivity periods that outlasted the terms of their patents; for the cohort approved between 1985 and 1994, 50% had an exclusivity period that outlived patent terms, and that share fell to 35% for the 1995 to 2005 cohort, and to 18% for the 2005 to 2014 cohort.
Among 102 drugs with single indications, the respective percentages for the 3 cohorts fell from 48% to 44%, and finally to 17%. In total, orphan drug exclusivity contributed just 356 years to 2141 total years of market exclusivity for these drugs.
With respect to product-only patents, 97% of the drugs studied had 1 or more such patent listed in the Orange Book, the last of which expired a median of 14 years after approval. The percentage of cases in which orphan drug exclusivity outlasted all patent terms dropped from 62% to 49% to 33% across the 3 cohorts, and among single-indication drugs, the percentage dropped from 64% to 59% to 37%.
As of January 2017, 87 of the study drugs had no remaining exclusivities (orphan drug- or patent-related), and 51 (59%) of them had no generic competition.
These findings, wrote the authors, demonstrate that orphan drug exclusivity’s utility is waning, and that the upward trend in rare disease drug approvals likely has little to do with 7-year market exclusivity. Instead, posited the authors, drug makers may target rare disease therapies because they see an opportunity to charge high prices for products that address unmet patient needs. Tax credits for clinical testing costs, which are also provided for under the Act, may also play a role in drug makers’ decisions about which products to develop. Legislators, wrote the authors, should carefully consider these findings as they develop new policies targeting other areas of public health.
Sarpatwari A, Beall RF, Abdurrob A, He M, Kesselheim AS. Evaluating the impact of the orphan drug act’s seven-year market exclusivity period. Health Aff. 2018;37(5):732-737. doi: 10.1377/hlthaff.2017.1179.