The Orphan Drug Act of 1983 has created incentives for the development of drugs and biologics for rare diseases. Last month, the Wall Street Journal examined the acts effects on patients, healthcare costs, and the biotech industry, pointing out:
Nearly half of all products produced by biotech companies are for orphan diseases.
Two of the largest biotech companies, Amgen and Genentech, were built on the lucrative niche of orphan drugs and biologics.
Several orphan drugs have annual sales of over $1 billion.
In Wisconsin, a number of companies and researchers are developing potential orphan products. Promising compounds likely to qualify for orphan product status are particularly attractive to biotech investors. Not only are there significant economic incentives for products designated as orphan products; these products are usually eligible for one or more Food and Drug Administration (FDA) programs that help accelerate product development and approval processes.
For all of these programs, careful advanced planning and evaluation is needed to ensure that program requirements are met, and that a particular program is appropriate for the product and the companys overall strategy.
Orphan Product Requirements and Incentives The FDAs Office of Orphan Products Development makes decisions on applications requesting orphan product designation. The threshold standard is that the product be for a disease or condition that has a prevalence of 200,000 or fewer affected persons in the United States. Under the law, this can include a medically plausible subset of persons with a disease that affects a large number of people, such as those who metabolize a type of drug differently than the larger population.
Drugs and biologics designated as orphan products are eligible for four major economic incentives:
Grants for clinical and non-clinical studies
Tax credits for clinical testing
Waived application user fees
Seven years market exclusivity if the product is the first orphan of that type approved for marketing
The programs market exclusivity provisions are what make orphan products such a lucrative niche. They prohibit the FDA from approving another drug or biologic with the same active ingredient for the same use unless it is shown to be clinically superior for the same disease or condition. The FDA has been extremely reluctant to find products clinically superior here.
Even after the exclusivity period ends, orphan products that are biologics often continue to be especially profitable because biologics are not subject to generic competition.
Expedited Development and Approval Programs The FDA offers several programs to help sponsors of certain types of drugs and biologics expedite drug development and approval processes. These separate but interrelated programs have different features and requirements, as well as potential benefits and risks. Participation in one or more of these programs can make a product and its sponsor more attractive to potential investors. Because these programs focus on products for unmet medical needs, orphan products frequently are eligible for one or more of them.
Subpart E is an older program available for promising therapies to treat individuals with life-threatening or severely debilitating illnesses where no satisfactory alternative therapy exists. The program allows sponsors to compress Phase III studies into the Phase II clinical trial period. It also authorizes the FDA to approve products with less safety data than would be required for traditional marketing approval applications.
Although these mechanisms can be useful, the programs risks can outweigh the potential benefits, particularly for smaller companies. In particular, the compressed clinical trial period means costs also are compressed.
Accelerated Approval is a newer program that has proven to be more attractive to eligible sponsors. It is available for products for serious or life-threatening illnesses that provide a meaningful therapeutic benefit over existing treatments. Meaningful therapeutic benefit can include an ability to treat patients unresponsive to existing treatments.
Under this program, the FDA can approve a product based on substantial evidence of an effect on a surrogate endpoint reasonably likely to predict clinical benefit, such as evidence of how patients feel, function, or appear during well-controlled clinical trials. The FDA requires post-approval studies to verify the clinical benefit, and also can impose restrictions on the distribution or use of a product, such as requiring that it be used only by physicians with special training or experience.
Products approved under accelerated approval face greater risks of having their approval withdrawn than drugs marketed under ordinary approval standards. Some companies, however, are willing to weather the costs and unpredictability of the required post-approval studies for the benefit of quicker market access.
Fast Track is a program that facilitates and expedites the development of products that serve unmet medical needs of serious or life-threatening conditions. The program provides formal mechanisms for sponsors to communicate with the FDA on product development issues, including clinical trial design. Products not in the Fast Track program also may consult with the FDA on these matters. But products accepted into the Fast Track program can have portions of their drug approval or biologics licensing applications such as an entire toxicology or clinical section submitted to the FDA before the application is complete. This early review can shorten approval times significantly once the sponsor files a complete application.
Priority Review is intended for products that address unmet medical needs. Products generally must provide a significant improvement compared to marketed products for a particular disease. The benefit of the program is clear: The FDA has a six-month review goal for Priority Review applications after a complete application is filed, whereas a regular application has a 10- to 12-month review goal.
Each of these programs has particular requirements, merits and risks. Companies with a potentially eligible product should evaluate the relevant program(s) as part of their overall business and regulatory strategies, and conduct periodic re-evaluations as product development proceeds.
Patricia Kaeding, an attorney, was an associate chief counsel at the FDA in Rockville, Md from 1993 to 2003.
FDA & Your Business appears monthly on WTN.
The opinions expressed herein or statements made in the above column are solely those of the author and do not necessarily reflect the views of The Wisconsin Technology Network, LLC. (WTN). WTN, LLC, accepts no legal liability or responsibility for any claims made or opinions expressed herein.
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