What Is the Purpose of the Orphan Drug Act?

Matthew Herder suggests it may be time to re-examine the purpose of the U.S. Orphan Drug Act.

simply because it targeted a rare disease; rather, the disease had to be rare enough to occasion market neglect.
However, just as the Food and Drug Administration (FDA) began making "determinations" about whether a given disease met the ODA's test of market neglect, the FDA's task was grossly simplified. In 1984 the ODA was amended, redefining rare diseases as those affecting "less than 200,000 persons in the United States" (the prevalence-based definition) or more than 200,000 persons, but for whom "there is no reasonable expectation that the cost of developing and making available in the United States a drug for such disease or condition will be recovered from the sale in the United States" (a commercial viability definition) [12].
With that change, the FDA went from requiring evidence of the commercial non-viability of orphan drug R&D to assuming commercial non-viability, provided the drug targeted fewer than 200,000 persons. Numerous studies that suggest that orphan drugs are actually more profitable than non-orphan drugs call this underlying assumption into serious question [7,13,14]. Avoiding any accounting of their actual R&D costs, nearly all of the more than 2,000 orphan drug designations sought and obtained by drug-makers between 1983 and 2011 fall within the prevalence-based definition [15]. And without upfront scrutiny of the relationship between disease prevalence and anticipated profits, drug manufacturers are routinely able to price orphan drugs at US$100,000-US$200,000 per patient per year, needing only 5,000-10,000 patients to generate US$1 billion in annual revenues.

Revise and Reclaim the ODA
What should be done? One idea is for the FDA to try yet again to cut down on the practice of salami slicing and, in turn, to better discriminate between genuine and artificial rare diseases. In 1992, the FDA first purported to curb salami slicing by requiring that, for subsets of common diseases to be considered rare, they needed to be "medically plausible" [16], a term it failed to define. Twenty-one years later, the FDA finally promulgated more promising regulations [17] that hold drug manufacturers to a higher standard of evidence. When seeking an orphan drug indication, manufacturers must now show not only why one subset of a disease should be targeted by their drug, but also why the drug is inappropriate outside the selected subset [18]. However, the findings of Kesselheim and colleagues [4] suggest that these new regulations-or the FDA's application of them-may not be adequate to the task. Another potentially more fruitful approach is to limit orphan drug designation to disease pathways rather than the rarity of the disease per se [4].
Fundamentally, though, the purpose of the ODA merits re-examination. At bottom, the ODA was intended to redistribute resources to medical needs that would otherwise be marginalized by market forces. With the introduction of the prevalence-based definition of rare disease, we began losing sight of the ODA's core, redistributive function.
To restore that function, we need to open up the very concept of an orphan disease or condition under the ODA and resume the scrutiny of claims of market-mediated, unmet medical need instead of policing the ever-shifting boundaries of disease. After all, "the category of orphan diseases bears no essential relationship to their prevalence, morbidity, or mortality" [19]. Markets also discourage a range of other research areas, including research involving pregnant women (because of perceived risks to the foetus) [20], comparative effectiveness research that seeks to assess the risks and benefits of competing drug treatments (because of the difficulty involved in patenting that type of information) [21], and research into diseases that disproportionately affect the world's poor (because of the population's low purchasing power) [22]. All of these areas of research carry tremendous social welfare gains; however, they have been effectively orphaned by the ODA's current focus on rare diseases. Policymakers can reclaim the ODA by removing the prevalence-based definition of a rare disease, allowing other areas of research to qualify as orphans and reviving the FDA's original, albeit short-lived, task of scrutinizing the demonstrable level of market neglect of the affected population, whether for reasons of rarity, poverty, gender, or otherwise. Waiting to see what comes down the pipe and then attempting to negotiate better prices for orphan drugs seems unlikely to succeed as a strategy for securing access to marginalized, but socially valuable, health innovations.