Public Citizen’s Criticism of 21st Century Cures Act

By: William Salage

Public Citizen, a pharmaceutical watchdog group, issued a report warning that Section 2151, also known as the Orphan Procut Extension Now Act [OPEN], a provisions in the 21^st Century Cures Act [CCA] could significantly increase the price of drugs, decrease innovation, and water down the Food and Drug Administration’s [FDA] approval standards.[1] The CCA passed through the House of Representatives in July 2015 with a stated purpose of encouraging biomedical innovation, particularly for those with rare diseases.[2]

However, legislation passed in 1983 called the Orphan Drug Act [ODA], provided powerful incentives to drug developers, such as market exclusivity, tax credits, research grants, waivers of FDA fees, and Priority Review Vouchers, create treatments for “orphan”, rare, diseases.[3] Orphan drugs are therefore drugs which are designated by the FDA to treat a disease which affects less than 200,000 individuals in the United States.[4] The ODA and its current incentives have turned a niche field of pharmaceutical development into a powerhouse, with orphan drugs being estimated to control 19% of the total share of drug prescriptions by 2020.[5]

Section 2151 encourages drug manufacturers to repurpose existing drugs to treat an orphan disease by “providing each manufacturer that wins approval for a new orphan indication on an existing FDA-approved drug with an additional six months of monopoly protections for all indications on that drug.”[6] In other words, Section 2151 encourages drug developers to find orphan indications for successful drugs by allowing a six month extension in patent protection which could equate to billions in profit.

Public Citizen argues that “the current orphan drug approval system is hardly in need of a stimulus”.[7] Rather, the current incentive programs have caused the most activity in orphan drug development in history. The average return on investment for orphan drugs is “nearly double that for non-orphan drugs: $14.90 versus $7.90 for every dollar invested in Phase III trials (human trials) respectively”.[8] Moreover, the high prices are one of the major contributing factors making orphan drugs so lucrative. In 2014 the cost to a patient for a typical drug was $5,153, while the average cost for an orphan drug per patient was $98,534.[9]

Public Citizen argues Section 2151 encourages pharmaceutical companies with patented lucrative drugs to obtain a new indication for that drug to treat a new orphan disease and in return receive 6 months’ additional patent protection.[10] However, the effect of this system is

To increase the costs of both orphan and non-orphan drugs.[11] The six-month extension applies to all indications of the drug, therefore preventing significantly cheaper generic drugs from entering the market. Moreover, such indications can be stacked, which could increase the patent protection for years to come, costing patients close to $4 billion.[12]

Furthermore, to meaningfully advance rare disease research, the pharmaceutical company must focus directly on the disease itself.[13] However, even under the current form of the ODA incentive programs, only 33% of the new orphan indications were newly developed molecules.[14] As such, even under the current incentive regime, pharmaceutical companies are not adequately encouraged to engage in new and innovative research. Section 2151 exasperates this problem. Section 2151 further encourages pharmaceutical companies to reinvest money into discovering a new use for old drugs, rather than investing that same money in new research.[15]

Finally, Section 2151, further deteriorates the FDA’s approval standard for orphan drugs.[16] As part of the ODA, the FDA has a low approval standard for orphan drugs, recognizing there is only a small population to conduct clinical trials on and the need to get some form of treatment out to those suffering from a rare disease. However, many drugs with orphan status, because of federal regulation, do not strictly treat just orphan patients or are used off label. As such, orphan drugs are often used in populations larger than 200,000 patients. Therefore, encouraging further mass development of orphan drugs, for the sake of obtaining orphan status, may lead to a decrease in regulatory scrutiny on the part of the FDA to many of the drugs being sold to the general public.[17]

 

 

[1] Sammy Almashat, Sarah Sorscher & Steven Knievel, House Orphan Drug Proposal: A Windfall for Pharma, False Cure for Patients, Public Citizen, at 1 (Dec. 8, 2015), http://www.citizen.org/ documents/2289.pdf.

 

[2] Sammy Almashat, Sarah Sorscher & Steven Knievel, House Orphan Drug Proposal: A Windfall for Pharma, False Cure for Patients, Public Citizen, at 1 (Dec. 8, 2015), http://www.citizen.org/ documents/2289.pdf.

 

[3] Developing Products for Rare Disease & Conditions, US Food and Drug Administration, (Oct. 19, 2015) http://www. fda.gov/ForIndustry/DevelopingProductsforRareDiseasesConditions/ucm2005525.htm.

 

[4] Id.

 

[5] EvaluatePharma, Orphan Drug Report 2014, (Oct. 2014), http://info.evaluategroup.com /rs/evaluate pharmaltd/images/2014OD.pdf.

 

[6] Sammy Almashat, Sarah Sorscher & Steven Knievel, House Orphan Drug Proposal: A Windfall for Pharma, False Cure for Patients, Public Citizen, at 4 (Dec. 8, 2015), http://www.citizen.org/ documents/2289.pdf.

 

[7] Id. at 8.

 

[8] Id.

 

[9] Almashat, supra note 1.

 

[10] Id. at 4.

 

[11] Id. at 13.

 

[12] Id. at 13.

 

[13] Id. at 6.

 

[14] Id. at 6.

 

[15] Almashat, supra note 1, at 7.

 

[16] Id. at 8.

 

[17] Id. at 10-11.