The Orphan Drug Act: Does it Help or Hurt?

Introduced with good intent, some of the provisions of the Orphan Drug Act may compel the FDA to rethink its strategy.

The Orphan Drug Act, introduced by the FDA in 1983 was intended to treat conditions affecting less than 200,000 patients per year. Since drug developers would not profit from investing in drug programs intended for such a small section of the population, the FDA hoped to provide incentives to the pharmaceutical industry through this Act. Although well-intended, the outcomes may not be those intended by the drug regulatory authority.

Orphan drugs can be very high priced, and they also come with a 7-year marketing exclusivity, which kills competition for the manufacturer. They are also exempt of the branded prescription drug fee levied through provisions of the Affordable Care Act. Taken together, these incentives may be distorting the original intent of the Act.

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