Over three decades ago, the United States Congress passed the Orphan Drug Act (ODA) in 1983. The act focused on encouraging drug development for rare diseases, which the agency defined as “affecting fewer than 200,000 people.” When new FDA commissioner, Scott Gottlieb, M.D., joined the FDA in 2016 he promised to revamp the ODA and close abuse-prone loopholes but how is it going?

Why do we need an Orphan Drug Act?

Before Congress enacted the Orphan Drug Act, companies had very little incentive to invest money in the development of these drugs. As a result, patients were left with limited to no options for treatment. Any treatment option offered was usually expensive because of the significant cost of development for a small population.

Therefore, Congress provided the incentive. First, companies were provided a 50 percent tax credit toward the cost of research and human clinical trials. Generous research grants were given, and relief from prescription drug fees was provided. Most of all, companies were provided marketing exclusivity for seven years, which greatly limits competition because other companies could not market the same drug.

Today, the U.S. Food and Drug Administration (FDA) is the agency responsible for administering the Orphan Drug Act (ODA) by reviewing applications for orphan drug designations, awarding the designations and reviewing applications for marketing approval.

So, how is the FDA doing? Last year around summer time, FDA Commissioner Scott Gottlieb, M.D. provided a status. He began his role as commissioner in May 2016, and attacked the ODA problems on all fronts. Gottlieb is an internal medicine doctor and drug company insider who has long believed in the deregulation and off-label marketing of medical devices.

FDA backlog of 200 requests for ODA status

Approximately 200 requests for orphan drug designation status were backlogged and pending FDA review when Gottlieb took the reins. Gottlieb vowed to never let orphan drug requests backlog again, and pledged to create policies whereby the FDA will respond to all new requests within a 90-day period. The FDA has experienced astronomical growth in new orphan drug requests in the last five years. In 2016, the FDA saw nearly 600 new requests, a number that has doubled since 2012. The FDA attributes the increase in part due to drug manufacturers’ increased interest in the program.

Gottlieb formed an FDA backlog SWAT team of experienced senior reviewers who have been singularly focused on tackling the backlog. They started with the oldest requests and worked their way forward. The agency has also developed a streamlined review process for better review consistency and efficiency. The FDA completed a review of the 200 backlogged items by the end of August. It is extremely important for companies to get the orphan drug designation, as that is the first crucial step toward benefiting from the other orphan incentives if the drug is approved for treatment. About 100 of the 200 applicants were given the orphan drug status.

Advances in Pharma

The FDA Commissioner said that the ODA policy needs to be brought up to 21^st century standards after remaining largely unchanged for the last 30 years. Gottlieb cites the tremendous advances in medicine and innovation since the ODA was first enacted. Given both, he feels that taking the time to review the policies and key provisions is a good idea, particularly to make sure the FDA is being as efficient as possible, and as modern as possible. Gottlieb cited biologics, precision medicine and molecularly-targeted drugs as some of the most prominent advances.

Gottlieb launched the Orphan Drug Modernization Plan on June 29, 2016 to accomplish these goals.

With the sharp increase in new drug applications, one of the challenges has been scientific and regulatory issues. With the advent of biologics and other therapies, regulatory issues have become particularly complex, so Gottlieb has created the Orphan Products Council to address these issues consistently across requests.

The FDA will also better collaborate with other entities within its organization. For example, if drugs for rare pediatric diseases are being reviewed, the SWAT review team will jointly conduct that review with the FDA’s Office of Pediatric Therapeutics. In a 10-year analysis of Orphan Drug Act contributions towards pediatrics, researchers found that 1,138 orphan drugs were designated with 148 receiving marketing approval; one-quarter of these were for pediatric diseases, mostly drugs in the endocrine/metabolic therapeutic drug class.

Closing Loopholes

Finally, Gottlieb is requiring an FDA review to ensure that the incentives currently offered to companies are in line with Congress’ original intent. The Orphan Drug Act has been successful, but there are some complaints that companies are using it as a way to abuse the system.

For example, NPR aired a report in January 2017 showing that a sizable number of drugs with orphan status were first approved for mass-market use by the FDA. Of the 450 drugs approved as orphan status since 1983, more than 70 had already received the FDA nod for mass-market approval. NPR reports that Crestor, Abilify and Humira all fall into this category. In fact, nearly half of the drugs FDA now approves have the rare disease designation even though many drugs are mass-marketed for common diseases.

At the beginning of 2017, Republican senators asked the Government Accountability Office (GAO) to investigate ODA abuses by drug companies.

Gottlieb also passed the FDA Reauthorization Act in August, requiring drug makers to earn the incentives afforded by the ODA. The manufacturer will now have to provide proof of their medication’s clinical superiority before they get the market exclusivity.

Perhaps the biggest change will be closing the loophole for pediatric orphan drugs. It’s been a longstanding practice, and Gottlieb says it’s time to go. Orphan drugs for adults are not required to undergo testing prior to classification as a pediatric orphan drug. Congress began to change that starting with an act in August 2016  requiring cancer orphan drugs developed for adults to be tested for children.

Gottlieb’s Orphan Drug Modernization Plan is part of the FDA’s larger effort called the Medical Innovation Development Plan, designed to bring all of the FDA’s tools and policies into the modern light. The FDA views its entire modernization effort as a way to increase competition among companies to ultimately decrease drug costs.

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