Senators Ask GAO to Investigate Possible Abuses of Orphan Drug Act

Lawmakers see need for regulatory or legislative changes

Building on weeks of mounting pressure to address high prescription drug prices, three influential senators have asked the government’s accountability arm to investigate potential abuses of the Orphan Drug Act, according to a report from Kaiser Health News (KHN).

In a March 3 letter to the Government Accountability Office (GAO), Senators Orrin Hatch (R-Utah), Chuck Grassley (R-Iowa) and Tom Cotton (R-Arkansas) raised the possibility that regulatory or legislative changes might be needed “to preserve the intent of this vital law,” which gives drug makers lucrative incentives to develop medications for rare diseases.

“While few will argue against the importance of the development of these drugs, several recent press reports suggest that some pharmaceutical manufacturers might be taking advantage of the multiple designation allowance in the orphan drug approval process,” the letter states.

In January, a KHN investigation found that the orphan drug program is being manipulated by drug makers to maximize profits and to protect niche markets for medications being taken by millions of patients.

Congress overwhelmingly passed the 1983 Orphan Drug Act to motivate pharmaceutical companies to develop drugs for people whose rare diseases had been ignored. Medications approved as orphans are granted tax incentives and seven years of exclusive rights to a market that affects fewer than 200,000 patients in the U.S.

In recent months, reports of five- and six-figure annual price tags for orphan drugs have amplified long-simmering concerns—and the letter reflects that sentiment.

The senators’ letter asked for a list of drugs approved for and denied orphan status by the FDA. It also asked whether resources at the agency, which oversees the Orphan Drug Act, have “kept up with the number of requests” from drug makers and whether there is consistency in the department’s reviews.

KHN’s investigation, which was also aired by National Public Radio, found that many drugs that now have orphan status aren’t entirely new. More than 70 were medications first approved by the FDA for mass-market use. These include the cholesterol blockbuster Crestor (rosuvastatin, AstraZeneca); Abilify (aripiprazole, Otsuka) for psychiatric disorders; and the rheumatoid arthritis drug Humira (adalimumab, AbbbVie), the world’s best-selling medication.

Others are drugs that have received multiple exclusivity periods for two or more rare conditions. Approximately 80 medications fall into this category, including cancer drug Gleevec (imatinib, Novartis) and wrinkle-fighting drug Botox Cosmetic (onabotulinumtoxinA, Allergan).

Cotton focused on an orphan drug that has been a flashpoint in the recent national dialogue about drug prices, arguing that the seven-year marketing exclusivity offered by the Orphan Drug Act should not have been given to Emflaza (deflazacort, Marathon Pharmaceuticals), a corticosteroid approved to treat patients with Duchenne muscular dystrophy. Emflaza was not mentioned in the letter to the GAO.

“Monopoly rights are not merit badges,” Cotton said. “They’re not a reward for business smarts. They’re supposed to serve the interests of patients.”

Marathon Pharmaceuticals triggered an uproar when it announced an $89,000 annual list price for Enflaza, which many U.S. patients have purchased overseas for $1,000 to $1,600 a year. Marathon responded in February by delaying the launch of the drug, saying it will talk with patients and other stakeholders about the price.

Source: Kaiser Health News; March 7, 2017.