Speeches & Testimony

History of the American Orphan Drug Act

Abbey S. Meyers President

National Organization for Rare Disorders (NORD)

Spain

International Conference of Rare Diseases and Orphan Drugs

February 18, 2000

In the United States groups of people with specific diseases often work together to achieve mutual support, education of the public and medical professionals (so that the disease can be more readily diagnosed and treated) and to raise money to support research on new treatments and ultimately a cure for the disease. These organizations are usually founded by people with the disease, or parents of afflicted children, or other relatives and friends who want to do something constructive to help a loved one.

Patient organizations are sometimes called “self-help” groups because they are governed by people with a direct interest in the disease. This is in contrast to organizations or foundations that are founded and governed by doctors or philanthropists who normally focus their resources on biomedical research. When patients or families create a charity devoted to a disease, they often see the problem beyond its medical profile, and they typically develop medical as well as non-medical programs to help patients cope in their every day lives.

During the late 1970s, American patient organizations for rare diseases realized that the work they were doing to promote and support medical research would be fruitless. They knew when an academic scientist discovered a new treatment for a rare disease, pharmaceutical companies were not interested in bringing the product to market. Drug companies wanted their products to be aimed at very large and lucrative markets, and rare diseases represented small markets that would probably not be profitable enough. Treatments for rare diseases were “orphan drugs” because no drug companies would adopt them.

In the United States, several of the rare disease patient organizations joined together in a coalition to solve the orphan drug problem. They needed to define the problem, find a solution, and then urge Congress to adopt the solution. At the time, this group was simply known as the orphan drug coalition, but it later became the National Organization for Rare Disorders (NORD) after the Orphan Drug Act became law in 1983.

Defining the problem was relatively simple. As the cost of drug research and development escalated, pharmaceutical companies felt they should not invest in products that would have small potential sales. There were often internal company arguments between marketing departments and scientists because the medical staff wanted to develop products that would have important therapeutic value without regard to potential sales. The marketing managers and accountants, however, wanted to analyze sales potential before an investment in the product would be authorized.

As a result of these internal struggles, marketing personnel often won the arguments, and a lot of closely related drugs for the most common conditions such as high blood pressure and arthritis, were developed by the pharmaceutical industry, while important therapeutic advancements for untreatable and deadly rare diseases were abandoned and forgotten about for years. In some cases, academic scientists were forced to produce lifesaving treatments by hand in their laboratories for many years because of the disinterest of commercial sponsors.

Patients with rare diseases knew that the public would be enraged if they knew about the orphan drug problem, not only because it was inhumane and unethical, but because funds donated by the public for research on rare diseases were being wasted. For if a cure would be discovered, it would not be manufactured, and patients with rare diseases would not have access to it. So the patient coalition embarked on a public relations campaign, bringing television cameras and newspaper reporters into the laboratories where recovered patients helped to fill capsules with lifesaving medicines that drug companies refused to manufacture.

Amazingly, the pharmaceutical industry denied that there was an orphan drug problem, and insisted that drug companies ordinarily manufacture “public service drugs” that lose money. Therefore, it became necessary for us to reveal stories of actual orphan drugs that had been turned down by numerous companies, and this embarrassed individual companies and ultimately the entire industry.

It is regrettable that during the first several years of the coalition’s public awareness effort, the pharmaceutical industry and consumer organizations were adversaries. However, the solution to the orphan drug dilemma slowly evolved out of this controversy when we understood that the only way to move treatments out of academic laboratories to our local pharmacies was to attract the pharmaceutical industry into developing and commercializing orphan drugs. We needed the industry to do this because we could not manufacture the drugs ourselves. It became evident that carefully designed financial incentives would entice pharmaceutical companies into developing orphan drugs. We had to show the industry that companies would not lose money, and they would have a good chance of earning a reasonable profit if the government would help to reduce their development costs for orphan drugs.

We also considered other solutions such as requiring the government to develop orphan drugs. However, the government is not a pharmaceutical company, and it does not have the scientific expertise nor infrastructure to become a manufacturer and distributor of medical products. During the second world war, when the American government decided to manufacture Penicillin on a large scale, the government turned the drug over to the private pharmaceutical industry; in a very short time there was a sufficient supply of Penicillin. The solution to the orphan drug problem was built on a model of a public-private partnership that utilizes the expertise of private industry.

The Orphan Drug Act of 1983 provides seven years of exclusive marketing rights for manufacturers of orphan drugs. It also provides tax credits for the cost of clinical research, and grants to support research on new treatments for rare diseases. Manufacturers of orphan drugs do not have to pay FDA user fees, and very often orphan products are given expedited reviews so there are minimal regulatory delays. The law has worked very well: We now have 200 FDA-approved orphan drugs on the American market, and more than 700 designated orphan drugs in the research pipeline.

This does not mean that life has been uncomplicated since the Orphan Drug Act was enacted. Rather, there have been many problems along the way, many obstacles to overcome, and major efforts to build and sustain relationships with academic researchers, the American government, and health-related industries have been a continuing challenge to the patient community.

The first challenge was to overcome the adversarial relationship between the pharmaceutical industry and patient organizations that arose from the struggle to pass the law. Drug companies had been hurt by newspaper stories and television shows that depicted the industry as heartless. But there were many heroes in the industry who had worked behind the scenes to convince top managers that drug development choices should be based on medical need, not on market size, and such decisions should be made not by accountants, but by medical staff. It took some time for intransigent managers to retire. When the conscientious new generation graduated to top management, the old resentments finally dissipated. Today, when a company recognizes an important medical advancement that it does not want to develop, we encourage them to license it to a smaller company, rather than abandon the product.

We recognized that the patient community needs the industry, and it took some time for the industry to recognize that it needs patients because we are their customers. Unlike people with common diseases who have many treatment options to chose from, people with orphan diseases create demand for a drug and link other patients to the product. Patients with rare diseases must educate themselves and become experts on their own disease. When people with rare diseases see new health care workers who are not familiar with their rare diagnosis, patients have to educate them. These patients must be alert to drugs that may be contraindicated, medical procedures that might exacerbate their symptoms, or anesthesia (for example, for dental procedures) that should be avoided. These patients cannot count on physicians knowing the implications of their primary diagnosis when they seek treatment for an ordinary sore throat or sprained ankle, so they must educate everyone they come in contact with. And these patients usually seek out others with the same diagnosis in order to reduce their isolation and despair. Thus, news about a clinical trial or a possible new treatment usually spreads quickly among rare disease patients. Since so many rare disorders are genetic, several family members may be affected and they often educate each other. Moreover, news about possible therapeutic interventions in our modern society is spread very quickly over the Internet through chat rooms and web sites dedicated to individual diseases.

After a few years, a small number of orphan drugs became extraordinarily profitable, and politicians asked why such lucrative drugs had benefited from government incentives that were created for drugs of little commercial value. There were several attempts to change the orphan drug law in order to punish the abuses and prevent more in the future. None of these changes were enacted, but it put the entire industry on warning that the United States Congress would not stand idly by and watch more orphan drugs climb to the top of the list of the most profitable drugs in the world. In general, during the last few years, the industry has respected this observation, and several manufacturers have not requested orphan drug designations for pharmaceuticals that would qualify on the basis of population size, but would nevertheless be very profitable. The European Orphan Medicinal Products Regulation provides an important mechanism to trigger competition after six years in cases where an orphan drug becomes extraordinarily profitable.

We also recognize that the American biotechnology industry was a child of the Orphan Drug Act. The law helped these companies to raise investment capitol and gave them a term of exclusive marketing that was more certain that patents. The United States biotechnology industry has flourished beyond all expectations, and it has brought many innovative products to market in the last decade for formerly untreatable diseases. We are very proud of the role the Orphan Drug Act has played in the evolution of this industry, and we look forward to the contributions that the European industry will bring in the next decade. Additionally, the Orphan Drug Act spurred the birth of many new start-up pharmaceutical companies in the United States because entrepreneurs recognized that products rejected by large multi-nationals have an important function in society, and they can be profitable.

In summary, the success of the American Orphan Drug Act is a tribute to the pharmaceutical and biotechnology industries, academic scientists, and patient organizations who were determined to bring treatments and cures to patients who need them. The American law marked the beginning of a strategic battle against human suffering. Asia and Australia joined that battle in the last decade. Now we rejoice that the European continent has joined in this cause. The talents and expertise of your universities, your scientists, and your companies, will greatly enhance rare disease advancements in the new century. We know that a child with Fanconi’s anemia or epidermolysis bullosa hurts just as much in Madrid, or Oslo, or London, as it does in New York, or Tokyo, or Brisbane. The rare disease community is one family, often discriminated against because we are a minority, but we are also powerfully important to medicine in terms of offering a window of understanding for the most common health conditions.

We believe that the international effort on behalf or orphan diseases that will be launched in the new century will have a profound effect on humanity. We thank the European Community for helping to alleviate pain and diminish suffering, and we eagerly look forward to the medical advancements you are about to provide to the rest of the world.

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