Biotech Values

[Preciouslife1]

Dew:Treating Rare Diseases: The Orphan Drug Act

I. INTRODUCTION

A rare disease is a disease that effects only a small patient population yet they effect between ten to twenty million people in the United States alone. [1] Drugs are often “orphaned”, or never are produced and sold on the market, even when a compound is thought to be useful for the treatment of a rare disease. Due to the small number of patients suffering, and the resultant lack of revenue they provide, pharmaceutical companies do not have any incentives to develop drugs and treatments for rare diseases. Therefore the pharmaceutical company may have the ability to supply orphan drugs, even when there is a demand, but this demand is not significant enough to manufacture the needed product. This is also partially due to the lack of sponsorship, or no one to “adopt” the orphan drug, to conduct the necessary testing to obtain the necessary approval from the Food and Drug Administration (“FDA”). [2]

Pharmaceutical companies are also faced by restrictions in where time and money can actually be invested into. They often have limited resources available to them for research and development (“R&D”), so research must be prioritized.[3] The drugs or treatments that will bring in the largest amount of revenue will be ranked highly and be of most importance, while developing treatments for rare diseases will fall very low. Generally, bringing any drug into the market can be very costly and time consuming. The estimated cost of bringing a single drug through screening processes and FDA procedures to obtain approval is between $350-500 million. [4] Companies report that nearly $21 billion was spent just on research and development for treatments.[5] It can take up to ten years just to bring a single drug into the market in addition.[6] As a result of these economic factors, treatments for rare disease are often “orphaned” and given very little recognition from the pharmaceutical industry.

Beyond the costs to the organization itself, companies have an additional responsibility to their shareholders. In order to fulfill a shareholder’s investment, a company must continue to grow and bring in revenue. An estimated 10% growth per year is necessary to meet the expectations of the company’s stockholders. To accomplish this goal, a company must introduce at least five new products into the market every year. Of the products that actually made it into the market between 1990 and 1994, only a small percentage achieved the minimum sales of $350 million required to be considered successful.[7]

An additional disincentive faced by the pharmaceutical industry is that many of the compounds found to treat rare diseases are not eligible for any form of patent protection. A patent is the exclusive right to make, use or sell a product.[8] Therefore, competitors are not able to sell a product that is the same as a product already protected by a patent. Without this type of protection a company would be left open to immediate competition with generics, which are usually offered at a lower price.[9] Generic drugs are less expensive than brand-name drugs, even though they are chemically identical and also meet the U.S. Food and Drug Administration standards for safety, purity and effectiveness.[10] The introduction of a generic into the market drives market prices down due to competition and therefore reduces the amount of revenue a “non-generic” could have potentially brought in. The high costs of bringing a drug into the market, added to the concerns about the amount of revenue a drug can actually bring in, the financial responsibility to shareholders and the lack of patent protection all outweigh a pharmaceutical company’s incentive and/or ethical obligation to provide drugs to those suffering from rare diseases.

The United States government soon realized the need to create incentives for pharmaceutical companies to develop drugs for rare diseases. It is the government’s responsibility to ensure “base-line well being of its citizens” and the government is already active in health issues and shaping health related policies.[11] In the early 1900s the government used to be involved with developing new drugs and treatments. New therapeutic treatments were often developed in federally operated labs, nonprofit medical research centers as well as within the pharmaceutical industry. By the 1960s, most new drugs were manufactured for profit and the focus of federal labs and research universities soon turned to only basic research and clinical studies.[12]

Although the government no longer develops treatments itself, it potentially has the power to pass laws that will control drug pricing and to compel companies to produce particular products. This type of enforcement through law could be a “highly dangerous proposition as interference with the ability to profit from one’s labor or inventions would stifle innovations and productivity.” [13] Congressional response to this concern led to the promulgation of the Orphan Drug Act. This Act was created to overcome the barriers confronting pharmaceutical companies by primarily establishing economic incentives to overcome them. The Pharmaceutical Manufacturers Association (“PMA”) quickly opposed any legislation and insisted that the industry could meet the needs of all patients if the FDA would relax the approval procedure for all drugs. This would decrease pre-market approval costs incurred by pharmaceutical companies and promote innovations for all drugs, not just those for rare diseases.[14] Surprisingly, the FDA also opposed any new legislation and stated the problem could be fixed by relaxing the approval process specifically for orphan drugs due to their unique and special need. [15] Regardless of these objections, the Orphan Drug Act was passed by Congress.

II. THE ORPHAN DRUG ACT – WHAT IS IT?

The passage of the Orphan Drug Act has been attributed in part to television; starting with the medical drama “Quincy” which aired an episode depicted a young boy with Tourette syndrome, a classic orphan disease. [16] In 1980, Rep. Henry Waxman received an urgent phone call from the mother of a boy, Adam Seligman, whose drug treatment for the rare disorder Tourette syndrome had been seized at the Canadian border. Since the drug was approved in Canada but not in the United States, Adam's doctor had to make alternative arrangements to bring the drug from Canada for his patient.[17] Meanwhile, Adam’s mother was anxiously waiting as her son’s medication was running out.

Shortly thereafter, hearings were held by Waxman to determine the extent of the rare disease problem.[18] Because of an article covering these hearings, Jack Klugman, an actor of the hit TV show “Quincy” decided to create an episode devoted to Tourette syndrome and the orphan drug problem. After it aired in March 1981, viewers responded quickly by sending thousands of letters voicing their support and asking how they could help.[19] With the issue in the public eye, Waxman introduced an orphan drug bill and held a second hearing which included Klugman as a witness. The media covered the hearing extensively because of Klugman’s celebrity involvement, and even greater public support followed. The bill was still stalled within Congress, so in response, Klugman put together another "Quincy" episode, mirroring the real-life holdup of the bill taking place on Capitol Hill. 500 "extras" were used in the shows who were actual victims of orphan disorders.[20] Public sentiment was successfully stirred and the efforts eventually led to the passage of the Orphan Drug Act.[21]

The Orphan Drug Act (“Act”) was passed in 1982 and went into effect in 1983.[22] The Act was designed to encourage the development of orphan drugs through economic incentives and by providing special assistance with the FDA drug approval process. In passing the Orphan Drug Act, Congress was motivated by public opinion but also had to weigh the economic needs of the pharmaceutical industry. Through this Act, “the public’s interest is served by encouraging drug development for an economically nonviable market.”[23]

In the United States, an “orphan drug” is defined as a drug useful for a condition that is considered to be a rare disease. Representative Henry Waxman, the co-sponsor of the Orphan Drug Act, stated, “[t]he naming of drugs for rare diseases as ‘orphan drugs’ was not done frivolously…They are very much liked children who have no parents, and they require special effort.”[24] At the time of the Act’s passage, a rare disease meant any disease or condition which occurs so infrequently that there is no reasonable expectation that the cost of developing and actually placing a drug on the market for such a disease or condition will recover sales within the United States for such a drug.[25] These terms were intentionally left vague by Congress so that the FDA would have the responsibility to define them.[26] If a drug met these definitions then they would be designated as an “orphan drug” and would be entitled to the incentives provided under the Act.

A great administrative burden was placed on the FDA and the organizations applying for orphan designation due to the way the definitions and requirements of the Act were initially outlined. The FDA required companies to submit detailed financial reports and market data to show that sales were not recoverable for a drug before it was given the designation as an orphan drug.[27] This involved elaborate research and detailed paperwork from the company that were both time consuming and costly. Additionally, the Act offered protection only to compounds which were not patent protected, and also excluded any compounds which could possibly even obtain a patent. To qualify for marketing exclusivity, a major incentive discussed later, the drug must not have a patent and prove to be unpatentable.[28] Proving a product cannot be patented is another time consuming and inefficient process.

Six incentives that were provided by the Orphan Drug Act:

1. assistance from the FDA,

2. open clinical trials,

3. tax credits,

4. grant funds,

5. marketing exclusivity, and

6. the Orphan Drug Product Board.[29]

The Orphan Drug Board was created to coordinate the government orphan drug program. It is situated within the Department of Health and Human Services which has authority over the FDA.[30] The administrative burden and cost of obtaining drug approval was reduced by providing assistance from the FDA. The FDA aids companies and sponsors that gain orphan designation by helping them design the necessary clinical trials necessary to obtain marketing approval.[31] This guides companies in their research and makes the approval process more efficient and less costly.

Open clinical trials are an additional incentive that benefits both the pharmaceutical companies as well as the patients suffering from rare diseases. These clinical trial protocols are left open to increase the availability of experimental drugs to patients before they are put on the market. This incentive allows the manufacturer to sell drugs to patients that are not part of the actual clinical trials while the testing is still going on.[32] Additionally, funds are granted through the Act for research, clinical trials, or other “qualified testing”. Another big financial incentive offered by the Act is a 50% tax credit for money spent on clinical testing. This number represents a compromise between the Senate and the House of Representatives. Senate called for a 90% tax credit while the House of Representatives wanted no tax credit at all.[33]

The major and most controversial incentive, created by the Orphan Drug Act is the protection offered through the seven year marketing exclusivity provision. During this seven year period, the FDA will not grant the necessary approval to another company for a drug for the same use. In the United States, all drugs must be approved by the FDA before being placed onto the market.[34] Congress harnessed this unique power of the FDA and protected orphan drugs by restricting their competitors from entering the market for a period of time. This privilege will be revoked if a sponsor can no longer produce the orphan drug to meet the market demand or if the sponsor voluntarily consents in writing approving another application to produce the orphan drug.[35]

A. The Evolution of the U.S. Orphan Drug Act

The Orphan Drug Act was formed incentives for pharmaceutical companies to develop and research treatments for rare disease. Prior to the Act being passed, only ten orphan drugs were approved in the United States.[36] In the first year of its passage, there were fifteen requests for designation of which only ten were actually granted.[37] The Act was not successful in increasing research and development. A greater response to the Act was expected from the pharmaceutical company since many companies had already developed orphan drugs and only had to bring them into the market.[38] Because of the poor response initially, Congress took a close look at the Orphan Drug Act and it went through several phases of amendments which included changes in definitions and criteria over the next few years.

After being in effect for only one year, the Act no longer required a company to show that a drug would be unprofitable. Since so few patients were actually effected by a particular rare disease, Congress decided unprofitability could now just be assumed. This 1984 amendment only requires the company to show that the disease effects less than 200,000, and thus reduced the administrative hassle of submitting data to prove the lack of profit a drug would bring.[39] The flaws with this requirement were duly noted. The Office of Management and Budget recommended that the term “rare disease” should be clearly defined. Senator Hatch also suggested the profits should be monitored even after a drug receives designation.[40] These suggestions were never incorporated.

In 1985 more substantive and procedural changes were made, expanding the Act. The most significant change was that marketing exclusivity was extended to all drugs, including those that are already patentable.[41] This change hoped to create a major incentive by offering protection (and a guaranteed monopoly) to all and also reducing the administrative burden of showing patentability. Some other minor changes included expanding the Act to encompass antibiotics. Before this amendment only traditional pharmaceutical and biotics were included.[42] Also, the financial incentive of providing research grants was extended to all qualified testing and not just qualified clinical testing.[43]

Procedural changes were also made defining how a company should proceed with the application process in order to obtain orphan status and to gain the benefits of the offered incentives. First, this set of amendments requires a company to file a request for orphan designation before submitting an application for marketing approval. Also, companies are now required to notify the FDA at least one year prior to ending the production of an approved drug. This notification was found to be necessary in order for the FDA to find another sponsor in time to continue production so the approved drug would continue to be available on the market.[44]

B. The 1992 Response from the FDA

Since many of the terms were intentionally left ambiguous by Congress, the FDA was left with the duty of defining the regulations and shaping the Orphan Drug Act. The FDA stated, “the main purpose of the Orphan Drug Act is to stimulate innovation in developing treatments for patients with rare diseases and conditions and to foster the prompt availability of therapeutically superior drugs.”[45] To promote this stated purpose, the FDA promulgated several specifications to the Act.

The FDA strongly backed the major incentive of the Act, the marketing exclusivity provision. The FDA expressed that exclusivity should be retained even when the patient population increased beyond the 200,000 maximum set out by the Act. This would be necessary to “protect a sponsor’s good faith investment.” Also, the FDA would strive to ensure that when companies originally apply, they correctly state their qualifications for designation by fitting within the 200,000 effected patient population qualification. In order to accomplish this, the FDA will “scrutinize” applications to make sure the true population is indicated. To enforce this, a penalty will be instituted for intentionally false statements of material fact. The penalty includes the loss of designation and/or marketing exclusivity.

The criterion to determine whether two drugs were actually the same was also explained by the FDA. Initially, it was unclear how the FDA would resolve whether a drug would be considered the same as another drug that already achieved designation. The FDA regulation now requires the second drug to show that it is clinically superior to the original orphan drug. This can be proven by showing that the drug is either more effective, safer or otherwise makes a “major contribution to patient care.”

The Orphan Drug Act also retained the provision indicating designation can be gained by a showing by the company that it will not recoup investments. In order to utilize this provision to obtain designation, the FDA requires the company to provide:

1. Data of all costs incurred and will incur during development and marketing;

2. Demonstration of the reasonableness of the cost data;

3. Explanation and justification of the apportionment of development costs if the drug is used for other indications;

4. Sales projections with justification of price;

5. Report from independent accountant; and

6. Permission for the FDA to examine relevant financial records.



III. HAS THE ORPHAN DRUG ACT HELPED?

The Orphan Drug has been in effect for almost twenty years, has it successfully enticed the pharmaceutical companies to develop treatments for rare disease? Has the change been significant? Statistically, there are more orphan drugs being produced since the inception of the Act as well as an increase in funding for orphan drug programs. This growth is evident in the fact that the Office of Orphan Products Development (OPD) has grown from five staff members to a total of nineteen.[46] The funds available in the grants program also increased from $500,000 given in 1983 to $9 million given in 1993.[47] Two bills have recently passed that would double funding to the research grant program and would also formally establish the National Institutes of Health Office of Rare Diseases.[48] One of these bills provides $25 million per year over the next fours years to the orphan drug research program and the other will authorize another $20 million each year for a period of the same four years to the National Institutes of Health program.

The expansion and increase in funding reflects growing activity in this area of research and development as well as the need for more staff to oversee the activities regarding rare diseases. This funding is greatly welcomed and needed. The bills increasing funding will hopefully “encourage more doctors to devote a career to finding an answer to a cure for these rare diseases since it is desperately needed to attract more young investigators into the field."[49] But the $25 million represents only a single dollar for each of the 25 million patients in the United States that suffer from a rare disease.

Prior to the Act very few new drugs were designed to treat rare disease. Only 10 orphan drugs had been approved before the Act was passed.[50] Twelve years after the passage of the Act, the FDA granted 631 orphan status designations to 450 drugs which led to 121 marketing authorizations.[51] More than 100 products have FDA approval and are available to treat patients for rare diseases in the United States such as tuberculosis, cystic fibrosis and hairy cell leukemia[52] and it is more likely that we have these drugs now because of the Orphan Drug Act.

A study conducted by Frank Lichetenberg, a Research Associate from the National Bureau of Economic Research, indicated that these new drugs reduce mortality rates for rare diseases. Before the Act, the mortality rates for selected rare diseases were growing at the same rate as other diseases.[53] Fives years after the Act was enacted, the mortality for diseases such as Huntington’s disease, myoclonus, ALS, Tourette’s syndrome and muscular syndrome began growing at a slower rate. Mortality rates dramatically declined with the increase in drug approvals. One orphan drug approval is estimated to prevent up to 211 deaths. The 216 orphan drugs approved since 1983 are estimated to have prevented nearly 108,000 deaths from rare diseases.[54] Lichentenberg’s research focused on HIV drug approvals and the mortality rates associated with them. He found HIV drug approvals have reduced mortality both directly and indirectly (via increased drug consumption). HIV mortality depends on both the quality and the quantity of medications consumed, and the new drug approvals have a sizeable impact on drug consumption. Therefore, this study suggests the financial incentives offered by the Orphan Drug Act led to more orphan drug designations. This in turn offers patients access to drugs and decreases mortality rates.

Some concerns or weakness have also been found in the Orphan Drug Act. For example, it does not deal with growing patient populations. The classic illustration of this issue is the growth of the AIDS epidemic.[55] In 1989 the drug AZT was approved for orphan designation to treat those with full blown AIDS. At the time only 45,000 patients were diagnosed. AZT was then found to be able to treat and be useful in delaying the onset of AIDS in those that were HIV positive, a patient population of over 600,000. This situation leads to many potential issues. For example, “the lack of a competitive market in comparable treatments fostered by the market exclusivity provision of the Act led to instances of supracompetitive pricing for AIDS treatments.”[56]

Another issue is more procedural. Once a company receives orphan status it does not automatically obtain marketing exclusivity. Several drugs can be designated as orphans for the same use, but then a race begins to who can obtain marketing exclusivity first. This leads to a major waste of resources. A company which invests time and money into developing an orphan drug may not be able to put it on the market for seven years because another company beat them by a matter of days. The “race to develop orphan drugs adds uncertainty and unpredictability to business decisions” that normally only have small profits.[57] There is risk of being completely blocked out of the market after investing a substantial amount of money. An example of this problem is the race between Bristol-Myers Squibb and IVAX. Both companies applied for marketing exclusivity for drugs that would treat Kaposi’s sarcoma.[58] IVAX produced a generic version which would have been less costly, but it was beat by only six days by Bristol-Myers. Bristol-Myers was also granted a monopoly within the United States for seven years and was allowed to provide a drug which would be more expensive to patients.

The Orphan Drug Act has succeeding in treating more than 10 million patients and increasing research in the arena of rare disease. The Orphan Drug Act has also awakened awareness globally. Many other nations such as the European Union, Australia and Japan are following the United States model. Other countries that are seeking to establish similar legislation include South Korea, Canada, New Zealand, and India. A group of pharmacologists recently requested the Indian government to institute an Orphan Drug Act at a conference held by the Indian Drug Manufacturing Association in 2001.[59]

IV. THE GLOBAL RESPONSE

The problem of developing treatments for rare disease is not limited to just the United States, it is a worldwide problem. The pharmaceutical industry is a global enterprise. More than 5,000 rare diseases affect millions of people worldwide, yet the patient population for each rare disease is still too small to entice the pharmaceutical industry to offer or manufacture a treatment.[60] The regulations offered in the U.S., such as the Orphan Drug Act, have become a “reference point” for many other countries such as Japan, Europe, Korea and Australia.[61] Australia has gone as far as automatically recognizing orphan drugs approved in the U.S. for the same indication when the prevalence of the disease in the Australian population is “not more than one person per 5000.”[62]

The European Union has recently approved a similar orphan drug act.[63] The European Union had adopted a “Programme of Community Action on Rare Diseases”. The aim of this organization was to “contribute towards a high level of health protection by improving knowledge, facilitating access to information for health professionals, researchers and patients, and by encouraging transnational cooperation on rare diseases.”[64] A proposal for Regulation of Medicinal Products was published by the EU in 1998. A drug would be given designation as an orphan drug if:

1. “It is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition effecting not more than five in 10,000 person in the community; or



2. It is intended for the diagnosis, prevention or treatment of a life-threatening, seriously debilitating or serious and chronic disease, and it is unlikely that the return from the community market would be sufficient to justify the necessary investment”[65]



After a drug receives designation, another application will not be accepted for ten years for a drug with the same purpose, opposed to the seven year period offered in the U.S. Similar to the U.S. regulations, this exclusivity will be revoked if:

1. the original holder gives consent

2. the sponsor is unable to supply sufficient amounts of the drug; or

3. the second applicant can show that their product is safer, more effective or clinically superior.[66]

Unlike the U.S. regulations, marketing exclusivity can be reduced to six years if after five years the criteria for designation are no longer met or the profits being made on the product are considered unreasonable.[67] The American Orphan Drug Act does not provide for any penalties or guidelines to revoke any of the incentives offered. Other economic incentives provided by the European Union’s Act include funds for examination fees and the possibility of other member states to waive their fees for applications to place the orphan drugs on their domestic markets.[68]

Japan has had a financial support system in place since 1973 that focused on researching orphan drugs that has been amended in 1993.[69] In Japan, the same rules are applied to orphan medical devices as well orphan drugs. Orphan status is given to drugs that are:

1. used to treat severe diseases effecting less that 50,000 patients in Japan,

2. alternative treatments are not available, or greater effectiveness and/or safety are expected; and

3. the development of the drug is highly probable.

Once a drug receives designation, it is eligible to receive: grants, tax reductions, guidance to facilitate development, accelerated procedures on new drug approval applications, a ten year period of exclusivity of the collected data from practical medical use and a ten year term for re-examination.[70]

The pharmaceutical industry participates in a strong worldwide market and rare diseases are a global concern. The availability of drugs, pharmaceutical production and consumption is linked to developments that occur worldwide as well as domestically. “The introduction of new products and the expansion of foreign markets have kept domestic production growing” therefore it is important to encourage involvement in world markets and harmonize procedures.[71] The majority (83.5%) of the world market is distributed among North America (36.5%), Europe (29%), and Japan (15.8%).[72] As discussed earlier, many of the nations are instating similar plans to promote R&D for rare diseases modeling the American Orphan Drug Act.

The pharmaceutical industry is seeking a harmonization by offering ten years of marketing exclusivity for all countries and it is trying to extend these rights to any registration data, including indications of older drugs.[73] The U.S. should provide additional incentives or the FDA should offer more guidance on marketing on the global market. Also, there should be efforts to gain mutual recognition of approvals from other countries, as Australia does for orphan drug approved in the U.S. There should also be harmonization to permit companies to import drugs that are marketed in a different country upon authorization.

V. ALTERNATIVES, OTHER INCENTIVES AND PROGRAMS

The U.S. Orphan Drug Act primarily focuses on the pharmaceutical companies and inciting them to produce orphan drugs. The Act, as it is, has proven to significantly increase the revenue a company can make on an orphan drug and harness’s these financial incentives to induce companies to invest. Corporate responsibility and public image should be promoted and there should be less emphasis on profitability. In addition to offering financial incentives through the Orphan Drug Act, Congress should also encourage academic researchers and others outside of just the for-profit pharmaceutical industry to develop more drugs and provide them with more incentives, funding and grants.

Since pharmaceuticals companies are so profitable in general, it has been proposed that they should set aside a fraction of their revenues for development of rare diseases and assist governments in providing access and implementing health programs.[74] The industry should also work with organizations such as WHO, World Bank and NGOs to build up collaborative policies. Major pharmaceutical companies should aid the WTO to set up exceptions to permit underdeveloped countries to produce or import generic drugs instead of prohibiting them. At the November 1999 conference entitled “Increasing Access to Essential Drugs in a Globalized Economy” called for “compulsory research obligations, such as requirements that companies reinvest a percentage of pharmaceutical sales into R&D, either directly or through public or private sector R&D programs.”[75]

Sometimes the pharmaceutical industry is more concerned about profits and business, forgetting that they play a vital role in the health and fitness of people. The “industry should consider its social responsibilities and not just its profits.”[76] There are other things a company should be concerned about, such as their public image. If a pharmaceutical researcher has come across a cure for a rare disease, why not share it and help those that need it? The argument provided by the pharmaceutical industry is, “Giving away our medicines away in general is an unsustainable and unrealistic answer because, at the end of the day, we must earn adequate return on our investment in order to fund future research.” It seems selfish and almost cruel to withhold a possible antidote from someone suffering from a rare disease. Pharmaceuticals should be encouraged to make donations, either by their own morality or by incentives offered through the government. Displaying good corporate responsibility is valuable for a company's image in the long run. If clients and patients perceive a company as moral and genuinely interested in the public good, they are more likely to maintain a relationship and invest in that corporation. Tax incentives over the past 20 years and corporate giving amounted to 6 billion.[77] This is a practice that should be continued and encouraged.

An exemplary model of such corporate giving is Merck. Merck discovered a treatment for river blindness during development and research. While investigating a heartworm treatment for animals, researchers found a drug that would prevent tropical river blindness. The drug was already produced but no one was buying the product despite the great need. The government also provided no aid because of the lack of a market so Merck just donated the medicine. Since then 51 million treatments have been distributed. Now the Merck project is managed in cooperation with United Nation agencies, WHO and the Task Force for Child Survival and Development.[78] Other organizations should look to Merck as a role model and take responsibility upon themselves to offer or donate medications which they have available. As George W. Merck, the Chairman and CEO of Merck wisely stated, “We try never to forget that medicine for the people. It’s not for the profits. The profits follow, and if we have remembered that, they never failed to appear.”[79]

Additionally, there are alternatives for putting a drug on the market to treat rare diseases. In the United States, the regulations of FDA permit physicians to prescribe approved medications for other uses aside from than their intended indications. This practice is known as “off-label use”.[80] This method allows a physician to use an FDA approved drug to treat a patient for a symptom that the drug was not initially approved for. A manufacturer is allowed to continue producing the drug for its approved use as well as for the additional uses that were not initially foreseen. This way the product is still available to patients and the manufacturer does not have to wait and go through the FDA approval process for the new use. The FDA does have certain restrictions on how information can be distributed by companies to inform physicians about these alternative uses.[81] The information can be disseminated through means such as studies published in scientific journals about the safety, effectiveness or benefits of "off label" uses for marketed drugs, biologics and medical devices. This information can only be distributed for "off-label" uses which have been, or will be, studied and submitted for FDA approval. It must also be both reliable and balanced. The FDA should be flexible with these restrictions if an approved drug is found to also treat orphan disease but has not been intended for that use yet.[82]

­­­­­­­­­­­­­

For additional references, see:

Ø http://www.fda.gov/orphan/

Ø http://www.rarediseases.org/

Ø http://ord.aspensys.com/diseases.asp

Ø http://orphanet.infobiogen.fr/



Examples of rare diseases:

Ø Anorexia Nervosa

Ø Anthrax

Ø Carpal Tunnel Syndrome

Ø Dysthymia

Ø Endomyocardial Fibrosis

Ø Growth Hormone Deficiency

Ø Huntington's Disease

Ø Meningioma

Ø Rubella

Ø Werner Syndrome

*************************************************************
Orphan Drug Regulations (21 CFR 316)
[Code of Federal Regulations]
[Title 21, Volume 5]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 21CFR316.1]


TITLE 21--FOOD AND DRUGS

PART 316: ORPHAN DRUGS--Table of Contents
Sec.
316.1 Scope of this part.
316.2 Purpose.
316.3 Definitions.
316.4 Address for submissions.

Subpart B - Written Recommendations for Investigations of Orphan Drugs

316.10 Content and format of a request for written recommendations.
316.12 Providing written recommendations.
316.14 Refusal to provide written recommendations.

Subpart C - Designation of an Orphan Drug

316.20 Content and format of a request for orphan-drug designation.
316.21 Verification of orphan-drug status.
316.22 Permanent-resident agent for foreign sponsor.
316.23 Timing of requests for orphan-drug designation; designation of already approved drugs.
316.24 Granting orphan-drug designation.
316.25 Refusal to grant orphan-drug designation.
316.26 Amendment to orphan-drug designation.
316.27 Change in ownership of orphan-drug designation.
316.28 Publication of orphan-drug designations.
316.29 Revocation of orphan-drug designation.
316.30 Annual reports of holder of orphan-drug designation.

Subpart D - Orphan-drug Exclusive Approval

316.31 Scope of orphan-drug exclusive approval.
316.34 FDA recognition of exclusive approval.
316.36 Insufficient quantities of orphan drugs.

Subpart E - Open Protocols for Investigations

316.40 Treatment use of a designated orphan drug.

Subpart F - Availability of Information

316.50 Guidance documents.

316.52 Availability for public disclosure of data and information in requests and applications.

Authority: 21 U.S.C. 360aa, 360bb, 360cc, 360dd, 371.

Source: 57 FR 62085, Dec. 29, 1992, unless otherwise noted.

Editorial Note: Nomenclature changes to part 316 can be found at 69 FR 13717, Mar. 24, 2004.

(a) This part implements sections 525, 526, 527, and 528 of the act and provides procedures to encourage and facilitate the development of drugs for rare diseases or conditions, including biological products and antibiotics. This part sets forth the procedures and requirements for:

(1) Submissions to FDA of:

(i) Requests for recommendations for investigations of drugs for rare diseases or conditions;

(ii) Requests for designation of a drug for a rare disease or condition; and

(iii) Requests for gaining exclusive approval for a drug product for a rare disease or condition.

(2) Allowing a sponsor to provide an investigational drug product under a treatment protocol to patients who need the drug for treatment of a rare disease or condition.

(b) This part does not apply to food, medical devices, or drugs for veterinary use.

(c) References in this part to regulatory sections of the Code of Federal Regulations are to chapter I of title 21, unless otherwise noted.


Subpart A General Provisions

§ 316.1 Scope of this part.

(a) This part implements sections 525, 526, 527, and 528 of the act and provides procedures to encourage and facilitate the development of drugs for rare diseases or conditions, including biological products and antibiotics. This part sets forth the procedures and requirements for:

(1) Submissions to FDA of:

(i) Requests for recommendations for investigations of drugs for rare diseases or conditions;

(ii) Requests for designation of a drug for a rare disease or condition; and

(iii) Requests for gaining exclusive approval for a drug product for a rare disease or condition.

(2) Allowing a sponsor to provide an investigational drug product under a treatment protocol to patients who need the drug for treatment of a rare disease or condition.

(b) This part does not apply to food, medical devices, or drugs for veterinary use.

(c) References in this part to regulatory sections of the Code of Federal Regulations are to Chapter I of Title 21, unless otherwise noted.


§ 316.2 Purpose.

The purpose of this part is to establish standards and procedures for determining eligibility for the benefits provided for in section 2 of the Orphan Drug Act, including written recommendations for investigations of orphan drugs, a 7year period of exclusive marketing, and treatment use of investigational orphan drugs. This part is also intended to satisfy Congress' requirements that FDA promulgate procedures for the implementation of sections 525(a) and 526(a) of the act.


§ 316.3 Definitions.

(a) The definitions and interpretations contained in section 201 of the act apply to those terms when used in this part.

(b) The following definitions of terms apply to this part:

(1) Act means the Federal Food, Drug, and Cosmetic Act as amended by section 2 of the Orphan Drug Act (sections 525528 (21 U.S.C. 360aa360dd)).

(2) Active moiety means the molecule or ion, excluding those appended portions of the molecule that cause the drug to be an ester, salt (including a salt with hydrogen or coordination bonds), or other noncovalent derivative (such as a complex, chelate, or clathrate) of the molecule, responsible for the physiological or pharmacological action of the drug substance.

(3) Clinically superior means that a drug is shown to provide a significant therapeutic advantage over and above that provided by an approved orphan drug (that is otherwise the same drug) in one or more of the following ways:

(i) Greater effectiveness than an approved orphan drug (as assessed by effect on a clinically meaningful endpoint in adequate and well controlled clinical trials). Generally, this would represent the same kind of evidence needed to support a comparative effectiveness claim for two different drugs; in most cases, direct comparative clinical trials would be necessary; or

(ii) Greater safety in a substantial portion of the target populations, for example, by the elimination of an ingredient or contaminant that is associated with relatively frequent adverse effects. In some cases, direct comparative clinical trials will be necessary; or

(iii) In unusual cases, where neither greater safety nor greater effectiveness has been shown, a demonstration that the drug otherwise makes a major contribution to patient care.

(4) Director means the Director of FDA's Office of Orphan Products Development.

(5) FDA means the Food and Drug Administration.

(6) Holder means the sponsor in whose name an orphan drug is designated and approved.

(7) IND means an investigational new drug application under Part 312 of this chapter.

(8) Manufacturer means any person or agency engaged in the manufacture of a drug that is subject to investigation and approval under the act or the biologics provisions of the Public Health Service Act (42 U.S.C. 262-263).

(9) Marketing application means an application for approval of a new drug filed under section 505(b) of the act, a request for certification of an antibiotic under section 507 of the act, or an application for a biological product/establishment license submitted under section 351 of the Public Health Service Act (42 U.S.C. 262).

(10) Orphan drug means a drug intended for use in a rare disease or condition as defined in section 526 of the act.

(11) Orphan drug designation means FDA's act of granting a request for designation under section 526 of the act.

(12) Orphan drug exclusive approval or exclusive approval means that, effective on the date of FDA approval as stated in the approval letter of a marketing application for a sponsor of a designated orphan drug, no approval will be given to a subsequent sponsor of the same drug product for the same indication for 7 years, except as otherwise provided by law or in this part.

(13) Same drug means:

(i) If it is a drug composed of small molecules, a drug that contains the same active moiety as a previously approved drug and is intended for the same use as the previously approved drug, even if the particular ester or salt (including a salt with hydrogen or coordination bonds) or other noncovalent derivative such as a complex, chelate or clathrate has not been previously approved, except that if the subsequent drug can be shown to be clinically superior to the first drug, it will not be considered to be the same drug.

(ii) If it is a drug composed of large molecules (macromolecules), a drug that contains the same principal molecular structural features (but not necessarily all of the same structural features) and is intended for the same use as a previously approved drug, except that, if the subsequent drug can be shown to be clinically superior, it will not be considered to be the same drug. This criterion will be applied as follows to different kinds of macromolecules:

(A) Two protein drugs would be considered the same if the only differences in structure between them were due to posttranslational events or infidelity of translation or transcription or were minor differences in amino acid sequence; other potentially important differences, such as different glycosylation patterns or different tertiary structures, would not cause the drugs to be considered different unless the differences were shown to be clinically superior.

(B) Two polysaccharide drugs would be considered the same if they had identical saccharide repeating units, even if the number of units were to vary and even if there were postpolymerization modifications, unless the subsequent drug could be shown to be clinically superior.

(C) Two polynucleotide drugs consisting of two or more distinct nucleotides would be considered the same if they had an identical sequence of purine and pyrimidine bases (or their derivatives) bound to an identical sugar backbone (ribose, deoxyribose, or modifications of these sugars), unless the subsequent drug were shown to be clinically superior.

(D) Closely related, complex partly definable drugs with similar therapeutic intent, such as two live viral vaccines for the same indication, would be considered the same unless the subsequent drug was shown to be clinically superior.

(14) Sponsor means the entity that assumes responsibility for a clinical or nonclinical investigation of a drug, including the responsibility for compliance with applicable provisions of the act and regulations. A sponsor may be an individual, partnership, corporation, or Government agency and may be a manufacturer, scientific institution, or an investigator regularly and lawfully engaged in the investigation of drugs. For purposes of the Orphan Drug Act, FDA considers the real party or parties in interest to be a sponsor.


§ 316.4 Address for submissions.

All correspondence and requests for FDA action pursuant to the provisions of this rule should be addressed as follows: Office of Orphan Products Development (HF-35), Food and Drug Administration, 5600 Fishers Lane, Rockville, MD 20857.

Subpart B Written Recommendations for Investigations of Orphan Drugs

§ 316.10 Content and format of a request for written recommendations.

(a) A sponsor's request for written recommendations from FDA concerning the nonclinical and clinical investigations necessary for approval of a marketing application shall be submitted in the form and contain the information required in this section. FDA may require the sponsor to submit information in addition to that specified in paragraph (b) of this section if FDA determines that the sponsor's initial request does not contain adequate information on which to base recommendations.

(b) A sponsor shall submit two copies of a completed, dated, and signed request for written recommendations that contains the following:

(1) The sponsor's name and address.

(2) A statement that the sponsor is requesting written recommendations on orphan drug development under section 525 of the act.

(3) The name of the sponsor's primary contact person and/or resident agent, and the person's title, address, and telephone number.

(4) The generic name and trade name, if any, of the drug and a list of the drug product's components or description of the drug product's formulation, and chemical and physical properties.

(5) The proposed dosage form and route of administration.

(6) A description of the disease or condition for which the drug is proposed to be investigated and the proposed indication or indications for use for such disease or condition.

(7) Current regulatory and marketing status and history of the drug product, including:

(i) Whether the product is the subject of an IND or a marketing application (if the product is the subject of an IND or a marketing application, the IND or marketing application numbers should be stated and the investigational or approved indication or indications for use specified);

(ii) Known marketing experience or investigational status outside the United States;

(iii) So far as is known or can be determined, all indications previously or currently under investigation anywhere;

(iv) All adverse regulatory actions taken by the United States or foreign authorities.

(8) The basis for concluding that the drug is for a disease or condition that is rare in the United States, including the following:

(i) The size and other known demographic characteristics of the patient population affected and the source of this information.

(ii) For drugs intended for diseases or conditions affecting 200,000 or more people in the United States, or for a vaccine, diagnostic drug, or preventive drug that would be given to 200,000 or more persons per year, a summary of the sponsor's basis for believing that the disease or condition described in paragraph (b)(6) of this section occurs so infrequently that there is no reasonable expectation that the costs of drug development and marketing will be recovered in future sales of the drug in the United States. The estimated costs and sales data should be submitted as provided for in § 316.21(c).

(9) A summary and analysis of available data on the pharmacologic effects of the drug.

(10) A summary and analysis of available nonclinical and clinical data pertinent to the drug and the disease to be studied including copies of pertinent published reports. When a drug proposed for orphan drug designation is intended to treat a life-threatening or severely debilitating illness, especially where no satisfactory alternative therapy exists, the sponsor may wish voluntarily to provide this information. A sponsor of such a drug may be entitled to expeditious development, evaluation, and marketing under 21 CFR Part 312, Subpart E.

(11) An explanation of how the data summarized and analyzed under paragraphs (b)(9) and (b)(10) of this section support the rationale for use of the drug in the rare disease or condition.

(12) A definition of the population from which subjects will be identified for clinical trials, if known.

(13) A detailed outline of any protocols under which the drug has been or is being studied for the rare disease or condition and a summary and analysis of any available data from such studies.

(14) The sponsor's proposal as to the scope of nonclinical and clinical investigations needed to establish the safety and effectiveness of the drug.

(15) Detailed protocols for each proposed United States or foreign clinical investigation, if available.

(16) Specific questions to be addressed by FDA in its recommendations for nonclinical laboratory studies and clinical investigations.

§ 316.12 Providing written recommendations.

(a) FDA will provide the sponsor with written recommendations concerning the nonclinical laboratory studies and clinical investigations necessary for approval of a marketing application if none of the reasons described in § 316.14 for refusing to do so applies.

(b) When a sponsor seeks written recommendations at a stage of drug development at which advice on any clinical investigations, or on particular investigations would be premature, FDA's response may be limited to written recommendations concerning only nonclinical laboratory studies, or only certain of the clinical studies (e.g., Phase 1 studies as described in § 312.21 of this chapter). Prior to providing written recommendations for the clinical investigations required to achieve marketing approval, FDA may require that the results of the nonclinical laboratory studies or completed early clinical studies be submitted to FDA for agency review.

§ 316.14 Refusal to provide written recommendations.

(a) FDA may refuse to provide written recommendations concerning the nonclinical laboratory studies and clinical investigations necessary for approval of a marketing application for any of the following reasons:

(1) The information required to be submitted by § 316.10(b) has not been submitted, or the information submitted is incomplete.

(2) There is insufficient information about:

(i) The drug to identify the active moiety and its physical and chemical properties, if these characteristics can be determined; or

(ii) The disease or condition to determine that the disease or condition is rare in the United States; or

(iii) The reasons for believing that the drug may be useful for treating the rare disease or condition with that drug; or

(iv) The regulatory and marketing history of the drug to determine the scope and type of investigations that have already been conducted on the drug for the rare disease or condition; or

(v) The plan of study for establishing the safety and effectiveness of the drug for treatment of the rare disease or condition.

(3) The specific questions for which the sponsor seeks the advice of the agency are unclear or are not sufficiently specific.

(4) On the basis of the information submitted and on other information available to the agency, FDA determines that the disease or condition for which the drug is intended is not rare in the United States.

(5) On the basis of the information submitted and on other information available to the agency, FDA determines that there is an inadequate basis for permitting investigational use of the drug under Part 312 of this chapter for the rare disease or condition.

(6) The request for information contains an untrue statement of material fact.

(b) A refusal to provide written recommendations will be in writing and will include a statement of the reason for FDA's refusal. Where practicable, FDA will describe the information or material it requires or the conditions the sponsor must meet for FDA to provide recommendations.

(c) Within 90 days after the date of a letter from FDA requesting additional information or material or setting forth the conditions that the sponsor is asked to meet, the sponsor shall either:

(1) Provide the information or material or amend the request for written recommendations to meet the conditions sought by FDA; or

(2) Withdraw the request for written recommendations. FDA will consider a sponsor's failure to respond within 90 days to an FDA letter requesting information or material or setting forth conditions to be met to be a withdrawal of the request for written recommendations.

Subpart C Designation of an Orphan Drug

§ 316.20 Content and format of a request for orphan drug designation.

(a) A sponsor that submits a request for orphan drug designation of a drug for a specified rare disease or condition shall submit each request in the form and containing the information required in paragraph (b) of this section. A sponsor may request orphan drug designation of a previously unapproved drug, or of a new orphan indication for an already marketed drug. In addition, a sponsor of a drug that is otherwise the same drug as an already approved orphan drug may seek and obtain orphan drug designation for the subsequent drug for the same rare disease or condition if it can present a plausible hypothesis that its drug may be clinically superior to the first drug. More than one sponsor may receive orphan drug designation of the same drug for the same rare disease or condition, but each sponsor seeking orphan drug designation must file a complete request for designation as provided in paragraph (b) of this section.

(b) A sponsor shall submit two copies of a completed, dated, and signed request for designation that contains the following:

(1) A statement that the sponsor requests orphan drug designation for a rare disease or condition, which shall be identified with specificity.

(2) The name and address of the sponsor; the name of the sponsor's primary contact person and/or resident agent including title, address, and telephone number; the generic and trade name, if any, of the drug or drug product; and the name and address of the source of the drug if it is not manufactured by the sponsor.

(3) A description of the rare disease or condition for which the drug is being or will be investigated, the proposed indication or indications for use of the drug, and the reasons why such therapy is needed.

(4) A description of the drug and a discussion of the scientific rationale for the use of the drug for the rare disease or condition, including all data from nonclinical laboratory studies, clinical investigations, and other relevant data that are available to the sponsor, whether positive, negative, or inconclusive. Copies of pertinent unpublished and published papers are also required.

(5) Where the sponsor of a drug that is otherwise the same drug as an already approved orphan drug seeks orphan drug designation for the subsequent drug for the same rare disease or condition, an explanation of why the proposed variation may be clinically superior to the first drug.

(6) Where a drug is under development for only a subset of persons with a particular disease or condition, a demonstration that the subset is medically plausible.

(7) A summary of the regulatory status and marketing history of the drug in the United States and in foreign countries, e.g., IND and marketing application status and dispositions, what uses are under investigation and in what countries; for what indication is the drug approved in foreign countries; what adverse regulatory actions have been taken against the drug in any country.

(8) Documentation, with appended authoritative references, to demonstrate that:

(i) The disease or condition for which the drug is intended affects fewer than 200,000 people in the United States or, if the drug is a vaccine, diagnostic drug, or preventive drug, the persons to whom the drug will be administered in the United States are fewer than 200,000 per year as specified in § 316.21(b), or

(ii) For a drug intended for diseases or conditions affecting 200,000 or more people, or for a vaccine, diagnostic drug, or preventive drug to be administered to 200,000 or more persons per year in the United States, there is no reasonable expectation that costs of research and development of the drug for the indication can be recovered by sales of the drug in the United States as specified in § 316.21(c).

(9) A statement as to whether the sponsor submitting the request is the real party in interest of the development and the intended or actual production and sales of the product.

(c) Any of the information previously provided by the sponsor to FDA under Subpart B of this part may be referenced by specific page or location if it duplicates information required elsewhere in this section.

§ 316.21 Verification of orphan drug status.


(a) So that FDA can determine whether a drug qualifies for orphan drug designation under section 526(a) of the act, the sponsor shall include in its request to FDA for orphan drug designation under § 316.20 either:

(1) Documentation as described in paragraph (b) of this section that the number of people affected by the disease or condition for which the drug product is indicated is fewer than 200,000 persons; or

(2) Documentation as described in paragraph (c) of this section that demonstrates that there is no reasonable expectation that the sales of the drug will be sufficient to offset the costs of developing the drug for the U.S. market and the costs of making the drug available in the United States.

(b) For the purpose of documenting that the number of people affected by the disease or condition for which the drug product is indicated is less than 200,000 persons, "prevalence" is defined as the number of persons in the United States who have been diagnosed as having the disease or condition at the time of the submission of the request for orphan drug designation. To document the number of persons in the United States who have the disease or condition for which the drug is to be indicated, the sponsor shall submit to FDA evidence showing:

(1) The estimated prevalence of the disease or condition for which the drug is being developed, together with a list of the sources (including dates of information provided and literature citations) for the estimate;

(2) Upon request by FDA, the estimated prevalence of any other disease or condition for which the drug has already been approved or for which the drug is currently being developed, together with an explanation of the bases of these estimates; and

(3) The estimated number of people to whom the drug will be administered annually if the drug is a vaccine or is a drug intended for diagnosis or prevention of a rare disease or condition, together with an explanation of the bases of these estimates (including dates of information provided and literature citations).

(c) When submitting documentation that there is no reasonable expectation that costs of research and development of the drug for the disease or condition can be recovered by sales of the drug in the United States, the sponsor shall submit to FDA:

(1) Data on all costs that the sponsor has incurred in the course of developing the drug for the U.S. market. These costs shall include, but are not limited to, nonclinical laboratory studies, clinical studies, dosage form development, record and report maintenance, meetings with FDA, determination of patentability, preparation of designation request, IND/marketing
application preparation, distribution of the drug under a "treatment" protocol, licensing costs, liability insurance, and overhead and depreciation. Furthermore, the sponsor shall demonstrate the reasonableness of the cost data. For example, if the sponsor has incurred costs for clinical investigations, the sponsor shall provide information on the number of investigations, the years in which they took place, and on the scope, duration, and number of patients that were involved in each investigation.

(2) If the drug was developed wholly or in part outside the United States, in addition to the documentation listed in paragraph (c)(1) of this section:

(i) Data on and justification for all costs that the sponsor has incurred outside of the United States in the course of developing the drug for the U.S. market. The justification, in addition to demonstrating the reasonableness of the cost data, must also explain the method that was used to determine which portion of the foreign development costs should be applied to the U.S. market, and what percent these costs are of total worldwide development costs. Any data submitted to foreign government authorities to support drug pricing determinations must be included with this information.

(ii) Data that show which foreign development costs were recovered through cost recovery procedures that are allowed during drug development in some foreign countries. For example, if the sponsor charged patients for the drug during clinical investigations, the revenues collected by the sponsor must be reported to FDA.

(3) In cases where the drug has already been approved for marketing for any indication or in cases where the drug is currently under investigation for one or more other indications (in addition to the indication for which orphan drug designation is being sought), a clear explanation of and justification for the method that is used to apportion the development costs among the various indications.

(4) A statement of and justification for any development costs that the sponsor expects to incur after the submission of the designation request. In cases where the extent of these future development costs are not clear, the sponsor should request FDA's advice and assistance in estimating the scope of nonclinical laboratory studies and clinical investigations and other data that are needed to support marketing approval. Based on these recommendations, a cost estimate should be prepared.

(5) A statement of and justification for production and marketing costs that the sponsor has incurred in the past and expects to incur during the first 7 years that the drug is marketed.

(6) An estimate of and justification for the expected revenues from sales of the drug in the United States during its first 7 years of marketing. The justification should assume that the total market for the drug is equal to the prevalence of the disease or condition that the drug will be used to treat. The justification should include:

(i) An estimate of the expected market share of the drug in each of the first 7 years that it is marketed, together with an explanation of the basis for that estimate;

(ii) A projection of and justification for the price at which the drug will be sold; and

(iii) Comparisons with sales of similarly situated drugs, where available.

(7) The name of each country where the drug has already been approved for marketing for any indication, the dates of approval, the indication for which the drug is approved, and the annual sales and number of prescriptions in each country since the first approval date.

(8) A report of an independent certified public accountant in accordance with Statement on Standards for Attestation established by the American Institute of Certified Public Accountants on agreed upon procedures performed with respect to the data estimates and justifications submitted pursuant to this section. Cost data shall be determined in accordance with generally accepted accounting principles.

(d) A sponsor that is requesting orphan drug designation for a drug designed to treat a disease or condition that affects 200,000 or more persons shall, at FDA's request, allow FDA or FDA designated personnel to examine at reasonable times and in a reasonable manner all relevant financial records and sales data of the sponsor and manufacturer.

§ 316.22 Permanent resident agent for foreign sponsor.

Every foreign sponsor that seeks orphan drug designation shall name a permanent resident of the United States as the sponsor's agent upon whom service of all processes, notices, orders, decisions, requirements, and other communications may be made on behalf of the sponsor. Notifications of changes in such agents or changes of address of agents should preferably be provided in advance, but no later than 60 days after the effective date of such changes. The permanent resident agent may be an individual, firm, or domestic corporation and may represent any number of sponsors. The name of the permanent resident agent shall be provided to: Office of Orphan Products Development (HF35), Food and Drug Administration, 5600 Fishers Lane, Rockville, MD 20857.

§ 316.23 Timing of requests for orphan drug designation; designation of already approved drugs.

(a) A sponsor may request orphan drug designation at any time in the drug development process prior to the submission of a marketing application for the drug product for the orphan indication.

(b) A sponsor may request orphan drug designation of an already approved drug product for an unapproved use without regard to whether the prior marketing approval was for an orphan drug indication.

§ 316.24 Granting orphan drug designation.

(a) FDA will grant the request for orphan drug designation if none of the reasons described in § 316.25 for requiring or permitting refusal to grant such a request applies.

(b) When a request for orphan drug designation is granted, FDA will notify the sponsor in writing and will publicize the orphan drug designation in accordance with § 316.28.

§ 316.25 Refusal to grant orphan drug designation.

(a) FDA will refuse to grant a request for orphan drug designation if any of the following reasons apply:

(1) The drug is not intended for a rare disease or condition because:

(i) There is insufficient evidence to support the estimate that the drug is intended for treatment of a disease or condition in fewer than 200,000 people in the United States, or that the drug is intended for use in prevention or in diagnosis in fewer than 200,000 people annually in the United States; or

(ii) Where the drug is intended for prevention, diagnosis, or treatment of a disease or condition affecting 200,000 or more people in the United States, the sponsor has failed to demonstrate that there is no reasonable expectation that development and production costs will be recovered from sales of the drug for the orphan indication in the United States. A sponsor's failure to comply with § 316.21 shall constitute a failure to make the demonstration required in this paragraph.

(2) There is insufficient information about the drug, or the disease or condition for which it is intended, to establish a medically plausible basis for expecting the drug to be effective in the prevention, diagnosis, or treatment of that disease or condition.

(3) A drug that is otherwise the same drug as one that already has orphan drug exclusive approval for the same rare disease or condition and the sponsor has not submitted a medically plausible hypothesis for the possible clinical superiority of the subsequent drug.

(b) FDA may refuse to grant a request for orphan drug designation if the request for designation contains an untrue statement of material fact or omits material information.

§ 316.26 Amendment to orphan drug designation.

(a) At any time prior to approval of a marketing application for a designated orphan drug, the sponsor holding designation may apply for an amendment to the indication stated in the orphan drug designation if the proposed change is due to new and unexpected findings in research on the drug, information arising from FDA recommendations, or unforeseen developments in treatment or diagnosis of the disease or condition.

(b) FDA will grant the amendment if it finds that the initial designation request was made in good faith and that the amendment is intended to conform the orphan drug designation indication to the results of unanticipated research findings, to unforeseen developments in the treatment or diagnosis of the disease or condition, or to changes based on FDA recommendations, and that, as of the date of the submission of the amendment request, the amendment would not result in exceeding the prevalence or cost recovery thresholds in § 316.21(a)(1) or (a)(2) upon which the drug was originally designated.


§ 316.27 Change in ownership of orphan drug designation.

(a) A sponsor may transfer ownership of or any beneficial interest in the orphan drug designation of a drug to a new sponsor. At the time of the transfer, the new and former owners are required to submit the following information to FDA:

(1) The former owner or assignor of rights shall submit a letter or other document that states that all or some rights to the orphan drug designation of the drug have been transferred to the new owner or assignee and that a complete copy of the request for orphan drug designation, including any amendments to the request, supplements to the granted request, and correspondence relevant to the orphan drug designation, has been provided to the new owner or assignee.

(2) The new owner or assignee of rights shall submit a statement accepting orphan drug designation and a letter or other document containing the following:

(i) The date that the change in ownership or assignment of rights is effective;

(ii) A statement that the new owner has a complete copy of the request for orphan drug designation including any amendments to the request, supplements to the granted request, and correspondence relevant to the orphan drug designation; and

(iii) A specific description of the rights that have been assigned and those that have been reserved. This may be satisfied by the submission of either a list of rights assigned and reserved or copies of all relevant agreements between assignors and assignees; and

(iv) The name and address of a new primary contact person or resident agent.

(b) No sponsor may relieve itself of responsibilities under the Orphan Drug Act or under this part by assigning rights to another person without:

(1) Assuring that the sponsor or the assignee will carry out such responsibilities; or

(2) Obtaining prior permission from FDA.

§ 316.28 Publication of orphan drug designations.

Each month FDA will update a publicly available list of drugs designated as orphan drugs. A cumulative, updated list of all designated drugs will be provided annually. These will be placed on file at the FDA Dockets Management Branch, and will contain the following information:

(a) The name and address of the manufacturer and sponsor;

(b) The generic name and trade name, if any, of the drug and the date of the granting of orphan drug designation;

(c) The rare disease or condition for which orphan drug designation was granted; and

(d) The proposed indication for use of the drug.

§ 316.29 Revocation of orphan drug designation.

(a) FDA may revoke orphan drug designation for any drug if the agency finds that:

(1) The request for designation contained an untrue statement of material fact; or

(2) The request for designation omitted material information required by this part; or

(3) FDA subsequently finds that the drug in fact had not been eligible for orphan drug designation at the time of submission of the request therefor.

(b) For an approved drug, revocation of orphan drug designation also suspends or withdraws the sponsor's exclusive marketing rights for that drug but not the approval of the drug's marketing application.

(c) Where a drug has been designated as an orphan drug because the prevalence of a disease or condition (or, in the case of vaccines, diagnostic drugs, or preventive drugs, the target population) is under 200,000 in the United States at the time of designation, its designation will not be revoked on the ground that the prevalence of the disease or condition (or the target population) becomes more than 200,000 persons.

§ 316.30 Annual reports of holder of orphan-drug designation.

Within 14 months after the date on which a drug was designated as an orphan drug and annually thereafter until marketing approval, the sponsor of a designated drug shall submit a brief progress report to the FDA Office of Orphan Products Development on the drug that includes:

(a) A short account of the progress of drug development including a review of preclinical and clinical studies initiated, ongoing, and completed and a short summary of the status or results of such studies.

(b) A description of the investigational plan for the coming year, as well as any anticipated difficulties in development, testing, and marketing; and

(c) A brief discussion of any changes that may affect the orphan drug status of the product. For example, for products nearing the end of the approval process, sponsors should discuss any disparity between the probable marketing indication and the designated indication as related to the need for an amendment to the orphan drug designation pursuant to § 316.26.
Subpart D Orphan drug Exclusive Approval.

§ 316.31 Scope of orphan drug exclusive approval.

(a) After approval of a sponsor's marketing application for a designated orphan drug product for treatment of the rare disease or condition concerning which orphan drug designation was granted, FDA will not approve another sponsor's marketing application for the same drug before the expiration of 7 years from the date of such approval as stated in the approval letter from FDA, except that such a marketing application can be approved sooner if, and such time as, any of the following occurs:

(1) Withdrawal of exclusive approval or revocation of orphan drug designation by FDA under any provision of this part; or

(2) Withdrawal for any reason of the marketing application for the drug in question; or

(3) Consent by the holder of exclusive approval to permit another marketing application to gain approval; or

(4) Failure of the holder of exclusive approval to assure a sufficient quantity of the drug under section 527 of the act and
§ 316.36.

(b) If a sponsor's marketing application for a drug product is determined not to be approvable because approval is barred under section 527 of the act until the expiration of the period of exclusive marketing of another drug product, FDA will so notify the sponsor in writing.

§ 316.34 FDA recognition of exclusive approval.

(a) FDA will send the sponsor (or, the permanent resident agent, if applicable) timely written notice recognizing exclusive approval once the marketing application for a designated orphan drug product has been approved. The written notice will inform the sponsor of the requirements for maintaining orphan drug exclusive approval for the full 7year term of exclusive approval.

(b) When a marketing application is approved for a designated orphan drug that qualifies for exclusive approval, FDA will publish in its publication entitled "Approved Drug Products with Therapeutic Equivalence Evaluations" information identifying the sponsor, the drug, and the date of termination of the orphan drug exclusive approval. A subscription to this publication and its monthly cumulative supplements is available from the Superintendent of Documents, Government Printing Office, Washington, DC 204029325.

§ 316.36 Insufficient quantities of orphan drugs.

(a) Under section 527 of the act, whenever the Director has reason to believe that the holder of exclusive approval cannot assure the availability of sufficient quantities of an orphan drug to meet the needs of patients with the disease or condition for which the drug was designated, the Director will so notify the holder of this possible insufficiency and will offer the holder one of the following options, which must be exercised by a time that the Director specifies:

(1) Provide the Director in writing, or orally, or both, at the Director's discretion, views and data as to how the holder can assure the availability of sufficient quantities of the orphan drug within a reasonable time to meet the needs of patients with the disease or condition for which the drug was designated; or

(2) Provide the Director in writing the holder's consent for the approval of other marketing applications for the same drug before the expiration of the 7year period of exclusive approval.

(b) If, within the time that the Director specifies, the holder fails to consent to the approval of other marketing applications and if the Director finds that the holder has not shown that it can assure the availability of sufficient quantities of the orphan drug to meet the needs of patients with the disease or condition for which the drug was designated, the Director will issue a written order withdrawing the drug product's exclusive approval. This order will embody the Director's findings and conclusions and will constitute final agency action. An order withdrawing the sponsor's exclusive marketing rights may issue whether or not there are other sponsors that can assure the availability of alternative sources of supply. Once withdrawn under this section, exclusive approval may not be reinstated for that drug.

Subpart E Open Protocols for Investigations

§ 316.40 Treatment use of a designated orphan drug.

Prospective investigators seeking to obtain treatment use of designated orphan drugs may do so as provided in § 312.34 of this chapter.

Subpart F Availability of Information

§ 316.50 Guidelines.

FDA's Office of Orphan Products Development will maintain and make publicly available a list of guidelines that apply to the regulations in this part. The list states how a person can obtain a copy of each guideline. A request for a copy of the list or for any guideline should be directed to the Office of Orphan Products Development (HF35), Food and Drug Administration, 5600 Fishers Lane, Rockville, MD 20857.

§ 316.52 Availability for public disclosure of data and information in requests and applications.

(a) FDA will not publicly disclose the existence of a request for orphan drug designation under section 526 of the act prior to final FDA action on the request unless the existence of the request has been previously publicly disclosed or acknowledged.

(b) Whether or not the existence of a pending request for designation has been publicly disclosed or acknowledged, no data or information in the request are available for public disclosure prior to final FDA action on the request.

(c) Upon final FDA action on a request for designation, FDA will determine the public availability of data and information in the request in accordance with Part 20 and § 314.430 of this chapter and other applicable statutes and regulations.

(d) In accordance with § 316.28, FDA will make a cumulative list of all orphan drug designations available to the public and update such list monthly.

(e) FDA will not publicly disclose the existence of a pending marketing application for a designated orphan drug for the use for which the drug was designated unless the existence of the application has been previously publicly disclosed or acknowledged.

(f) FDA will determine the public availability of data and information contained in pending and approved marketing applications for a designated orphan drug for the use for which the drug was designated in accordance with Part 20 and §314.430 of this chapter and other applicable statutes and regulations.