Proactive Agency Initiatives Promote the Development of Treatments for Rare Diseases

As we all know, the cost of developing drug therapies, clinically evaluating effectiveness and then scaling up production facilities, is considerable. Recent figures suggest that prior to release to the public, investments by industry can exceed $800 million USD. Eventually, when these therapies reach the market place, they must be priced accessibly, and recoup not only that investment, but also investments made in therapies that did not successfully make it to market. Hopefully, therapies will pay for their own development, development of therapies that did not reach the market and then fund future development.

The impact of the financial reality of development costs has traditionally been developmental efforts that focus on therapies required by large sectors of the population. Increasing the potential customer base, allows the unit cost per dose to be kept as low as possible while achieving the necessary return on investment.

Unfortunately, these financial considerations have translated into a lack of therapies for rare diseases. It is estimated that two thirds of the 30,000 known diseases currently lack an available and effective treatment.

In recent years, the The Food and Drug Administration (FDA) has instituted a number of proactive initiatives, including cGMP reform to allow manufacturers to modernize control systems, the Fast Track program designed to allow urgently needed therapies to safely reach the marketplace rapidly, and, in conjunction with patient advocacy groups, the Orphan Drug Act, to promote the development of therapies designed to treat diseases the affect small portions of the population, and advancing pharmacological technologies in general.

This act encourages pharmaceutical groups to create new products that diagnose and treat rare diseases. The Orphan Drug Act is enforced by the Office of Orphan Products Development (OOPD), an Office created by and under the direction of the FDA. As defined by the Orphan Drug Act, applicable products must treat diseases that present in less than .075 % of the population. If the new product is approved, the product is labeled an orphan drug, and the developing pharmaceutical company is then eligible to receive the following benefits related to the product if applicable:

• Tax incentives
• Seven years market exclusivity
• Clinical trial tax incentives (50%)
• Enhanced patent protection and marketing rights
• Clinical research financial subsidization
• Creating a government-run enterprise to engage in research and development
• Exemption from the Food and Drug Administration registration fee
• Protocol assistance and congressional grants of approximately $20m

The European Union (EU) has created a similar act, as have Australia and Japan. The EU has established the Committee on Orphan Medicinal Products of the European Medicines Agency (EMEA). The FDA and EMEA will maintain separate approval processes, but have agreed to use a common application process in order to reduce the burden on manufacturers.

In 2009, the FDA charged the OOPD to devote its mission entirely to the “promotion of development of products that demonstrate promise for the diagnosis and/or treatment of rare diseases or conditions.” In response, the OOPD works with groups to encourage new product development and administers the Orphan Products Grants Program which provides funding for clinical research of rare diseases.

The OOPD also newly administers the Pediatric Device Consortia (PDC) Grant Program. This program awards grants that support the development of nonprofit businesses designed to stimulate projects which will promote pediatric device development (medical devices designed specifically for use in populations under 21 years of age). Each year, one to four companies will compete to receive up to $2 million USD in funding, and regulatory assistance.

The OOPD announced that it is expected that over $14.2 million is available in grants during 2009 and 2010.

Some argue that the definition of an orphan drug is too broad, therefore allowing companies to create a product that could acquire a large profit (if the product could be used by many). Dissenters have also voiced concern that the Orphan Drug Act could prevent competition, by discouraging investments of rival companies once markets become legally exclusive.

However, these concerns have largely been proven to be unnecessary, as financials report that currently less than 2% of therapies approved as orphan drugs (Genentech/Lilly’s growth hormone, Glaxo Wellcome’s Zidovudine, Amgen’s Erythropoietin, and Genzyme’s Alglucerase) have realized significant financial returns for developing companies.

The EU act seeks to minimize this risk to the marketplace by including the following clause “privileged monopoly position can be withdrawn if the criteria which led to the product originally gaining orphan status are no longer being met, or if unreasonable profit has been gained by the company marketing the drug.”

Further control systems have not been ruled out, but at this point, statistics reveal no misuse or abuse of the regulation.

Conversely, statistics indicate that the Orphan Drug Act has been a huge success. Prior to 1983 there were fewer than 10 products on the market that met the definition in the Act. Since the Act has been implemented, there have been over 228 applicable products approved in the US. The number of applications of designated products has increased each year since 1997, suggesting that the initiative is indeed promoting development of products to treat rare diseases and children’s medical devices.

Recently the FDA approved Quinazoline495 for the treatment of Spinal Muscular Atrophy (SMA). SMA is the leading genetic killer of children under the age of two. Children that are affected with this disease face degeneration of muscle movement including the muscles that control crawling, walking, swallowing or breathing. This is the first approved therapy for the treatment of this horrific disease. There is now hope for the families dealing with this disease.

There are many other new products in clinical trials such as Alendronate Sodium for Children With High-Turnover Idiopathic Juvenile Osteoporosis, and Olanzapine for Children with Autism. The development of these treatments is almost certainly a function of the Orphan Drug Act.

The success of the Orphan Drug Act has inspired a renewed belief in the ability of our regulatory systems developed to promote our safety to adapt and move beyond traditional bureaucratic models, to contributory partners in ingenuity and discovery. We in the industry, those in patient advocacy groups, and most essentially, those effected by rare diseases, applaud this success and hope for continued collaboration between our government and our medical researchers.

© Coda Corp USA 2010. All rights reserved.

Co Authors:
Gina Guido-Redden and Corrine Knight

Grabowski H. Vernon J.J Health Eon 1994
Rozek RP, Tully N. Journal World Intellectual Property. 1999

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