Continuing Innovation for Rare Conditions Under the Orphan Drug Act 

Since its passage into law in 1983, the Orphan Drug Act has spurred the development of numerous advances in the treatment of rare diseases. Before 1983, there were a handful of treatments available; today, more than 500 products are approved by the Food and Drug Administration (FDA). 

Developing these treatments remains challenging. Per the National Institutes of Health, there are 7,000 rare diseases, yet only 5% of rare diseases have treatments. Rare conditions — or even ultra-orphan conditions — usually affect the youngest, most vulnerable populations and are often fatal. Challenges include diagnosing and understanding the disease, finding sufficient patients for clinical trials, and gaining FDA approval, which can take an average of 16 years. 

Under the Orphan Drug Act, innovators are granted seven years of exclusivity for the approved orphan indication, a tax credit for expenditures related to clinical trials, a waiver from user fees, and potential use of the FDA's accelerated approval pathway, among other benefits. Although some health care stakeholders have suggested that reforms to the Act are needed, it's important to consider how policy changes could create unintended consequences for advancing future innovation and patient health. 

To date, the Orphan Drug Act has served as a catalyst for the development of many innovative therapies to treat rare diseases such as hemophilia, cancers, and genetic conditions. Without the appropriate incentives to develop therapies for rare or ultra-rare conditions, we could miss out on clinically important therapies. When it comes to biopharmaceutical innovation, even a small number of therapies can make a big difference to patient health outcomes. We don't know which therapies we'll miss or what their clinical significance would have been.  

Additionally, many patients with rare conditions have faster access to treatments that provide meaningful advantages through accelerated approval. A study published in Health Affairs that compared drugs approved from 1999 to 2012 through expedited versus conventional review processes found that drugs with an expedited review program offered greater health gains than drugs reviewed through a conventional process. 

There's also a misperception that all treatments for rare diseases are high cost or account for a large portion of health care spending. According to a study by IQVIA and NORD, “The total invoice spending on orphan indications accounted for 11%, or $58 billion of total invoice spending in 2019, while $378 billion was spent on non-orphan drugs.” 

Government price-setting isn't the answer to addressing health care costs and access issues. Treating a rare condition is not limited to pharmaceutical costs alone. That isn't to ignore their price but to recognize that the care of these patients is often complex. It requires support from a wide range of people — physicians, nurses, caregivers, and many others — to manage a patient's condition and provide the unique care they need. 

The management of their condition is not only challenging for patients; they are also challenged in their efforts to gain access to these medicines. Because so few people are living with the same rare disease, their treatment might be covered completely by a biopharmaceutical company patient assistance program, charity care or foundation, or another alternative funding mechanism. While health insurers might cover the treatment, a copay is likely required. Although generic versions of orphan drugs are typically priced much lower than the innovator's product, patient assistance for generics is often nonexistent. These out-of-pocket costs can put the generic out of reach for some patients. 

Scientific innovation is rapidly outpacing the rate of innovation in our health care payment and delivery system. Our health care payment system wasn't built to handle targeted cell and gene therapies and other transformative treatments. That's why NPC is working with MIT and other leading organizations to test and model alternative payment methods. While changes to our health care payment system are needed, we should carefully consider the trade-offs with any reforms under discussion. 

We believe that it's important to continue the dialogue, consider a wide range of options, and include all stakeholders in the conversation, especially patients and their caregivers. Patients with rare conditions already have few treatment options; we shouldn't make it harder without fully understanding the consequences.