The United States Orphan Drug Act: Challenges and Success
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0092-86 15/97
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Copyright 0 1997 Drug Information Association Inc.
THE UNITED STATES ORPHAN DRUG ACT CHALLENGES AND SUCCESS MARLENEE. HAFFNER,MD, MPH Director, Office of Orphan Products Development, Office of the Commissioner, Food and Drug Administration, Rockville, Maryland
The Orphan Drug Act, by providing incentives to pharmaceutical f i r m to develop new drugs for rare diseases, has helped many patients in the United States. This paper reviews its progress from its passage in 1983 to date, including the designation of 643 orphan products and the marketing approval of 125 of these. The next goal is to achieve harmonization with the European Union and Japan. Key Words: Orphan Drug Act; Orphan drugs; Rare diseases
THE HIGH COST of drug development throughout the world has always discouraged pharmacologic research for uncommon disorders; drugs are not developed when profits are unlikely and costs cannot be recovered. Because of the rarity of orphan diseases, orphan products suffer from a limited commercial market that lacks a cost-effective benefit to the developing company. Such economic disincentives make it unlikely that a pharmaceutical manufacturer in the United States, France, or Japan will recoup its research and development costs or marketing expenditures for products for rare diseases. Drug development is expensive and resource-intensive for any manufacturer. According to the Pharmaceutical Research and Manufacturers of America (PhRMA), a phar~
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maceutical manufacturer may spend an estimated $290 million undertaking the research and development process and meeting regulatory requirements to bring a new drug to market in the United States. Products to treat diseases with large populations may be expected to bring an adequate return on this investment. When a firm is developing a drug to treat a disease that occurs infrequently, that is, an orphan product, this is not the case. Pharmaceutical firms in the United States usually have little interest in developing drugs for which the sales potential is less than $20 million. Even large drug manufacturers have limited resources to commit to drug development, so, from a financial standpoint, it is more logical for them to pursue drugs with a greater chance of success, that is, sales potential of $100 million or greater. The United States Orphan Drug Act provided meaningful incentives to the pharmaceutical industry in the United States to encourage development of new drugs for rare diseases. The Orphan Drug Act helps overcome the economic disincentives for orphan product manufacturers in the United States by affording certain advantages for academic researchers and manufacturers to determine
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Presented at the DIA 32nd Annual Meeting “The Challenge of Worldwide Pharmaceutical Development in an Era of Regulatory Change: Accelerated Approval with Quality and Contained Cost,’’ June 9-13, 1996, San Diego. California. Reprint address: Marlene E. Haffner, MD, MPH, Director, Office of Orphan Products Development, Food a
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