Containing escalating drug prices remains a top priority for the new Trump administration. A recent report by Kaiser Health News has fueled an investigation into potential abuses of the Orphan Drug Act by drug makers.
Republican Senator Chuck Grassley, Chairman of the Senate Judiciary Committee, has ordered a probe into possible misuse of the 1983 Orphan Drug Act that may have contributed to the exorbitant prices of commonly used drugs.
Report: Orphan Drug Rules Are Manipulated
The Kaiser Health News study indicates that orphan drug rules have been routinely manipulated to enable drug companies to charge astronomically high prices for drugs that were already being used by millions of patients. (For more, see Many Drug Makers Are Abusing Orphan Drug Rules.)
The Orphan Drug Act offers significant incentives to drug makers to develop drugs for rare diseases that affect fewer than 200,000 American people. They include rapid FDA approval, a 50% R&D tax credit, seven years of exclusive marketplace rights even if the drug patent expires, and no obligations on limiting prices for the orphan drug for treating any of the 7,000 rare diseases. (For more, see What Does it Mean to Have Orphan Drug Status?)
72 Existing Drugs Got Bogus Orphan Drug Status
However, the study revealed that many of the high-cost orphan drugs were already used by millions of patients for more than one indication. A total of 72 drugs that had already been approved by the FDA to treat non-rare diseases later secured orphan drug designation, which gave them government incentives and market exclusivity. For instance, the rheumatoid arthritis drug Humira, the cancer drug Herceptin, the psychiatric drug Abilify, and the cholesterol drug Crestor are a few notable examples.
While drug makers may not be breaking any rules, the orphan drug incentives and lucrative perks are being routinely abused to gain monopolistic control in the rare disease market to justify exorbitant prices.
"My staff is meeting with interested groups and other Senate staff to get their views on the extent of the problem and how we might fix it," said Senator Grassley. The Iowa senator heads the Judiciary Committee, which has jurisdiction over anti-competitive and patent-related issues.