Orphan Drug Act’s ‘nonprofitability’ loophole needs to be closed

Last month, the Food and Drug Administration took the unusual step of admitting it had made a mistake 25 years ago when it granted orphan drug status to an opioid addiction treatment called buprenorphine (Subutex).

The original orphan drug application was based on the claim by Indivior, the maker of Subutex, that the company was not likely to make a profit from marketing the drug. At the time, opioid addiction was not the widespread scourge it is today.

In its reversal, something I had called for in STAT earlier in the year, the FDA said its original decision was incorrect because the manufacturer has made billions of dollars from the drug.

In admitting its error, the FDA was courageous, but was also an important move for public health, given the lives lost each year to opioid addiction and the families devastated by it.

The original orphan designation blocked Brixadi, an extended-release injection of buprenorphine, from entering the market, as well as any other buprenorphine trying to do that. By revoking orphan drug status for buprenorphine, the FDA has opened the door to other opioid addiction drugs, thus expanding the options for patients with opioid addiction and, hopefully, lowering the price of treatment by creating a competitive marketplace.

I’m an advocate for people with rare diseases, not a lawyer, and it is admittedly challenging to explain this issue. But here goes.

Back in 1994, Indivior invoked a rarely used provision in the 1983 Orphan Drug Act that lets the FDA grant orphan drug status to a drug if the manufacturer can show it is not likely to make a profit on the drug. At the time, no one imagined that a drug to treat opioid addiction would ever be in great demand, so the FDA agreed to grant Subutex orphan drug status and with it seven years of marketing exclusivity.

A loophole in the law — and here’s the real problem — says that orphan drug status and marketing exclusivity can be extended for future versions of the same drug without the manufacturer having to continue to show that the drug is not likely to be profitable. So when Indivior asked the FDA to approve a once-monthly injection of buprenorphine called Sublocade in 2016, it was given the original exclusivity, even though the company was now making billions from the sale of buprenorphine.

The FDA’s reversal has dealt with the specific situation involving this opioid addiction drug. But the potential for this to happen again still exists — the Orphan Drug Act has not been changed to prevent it. So a manufacturer can still gain orphan drug exclusivity based on a prediction of nonprofitability and then get extensions for future versions of the same active ingredient without having to show that the drug is indeed not profitable.

This is an example of gaming the system — taking advantage of a provision in the law that increases profits for a drug company.

I have spent nearly 20 years advocating on behalf of the 30 million Americans with rare diseases. The Orphan Drug Act is a good law. It has been successful in encouraging the development of drugs for rare diseases.

But the buprenorphine case has exposed a flaw in the act that must be addressed. I encourage Congress to make this small but important change to the law: For a manufacturer to continue to receive orphan designation based on nonprofitability, it must demonstrate that the drug has not been profitable and is not likely to be profitable in the future.

The Orphan Drug Act has been very successful in encouraging companies to develop treatments for rare diseases. But the existence of the loophole in the nonprofitability provision could be used to undermine the integrity of the law itself. And that would be a shame.

One possible approach to closing this loophole is passing the Fairness in Orphan Drug Exclusivity Act (H.R. 4712) introduced by Reps. Madeleine Dean (D-Pa.), Marc Veasey (D-Texas), Earl L. “Buddy” Carter (R-Ga.), and David McKinley (R-W.Va.). This bill would require any company that receives an orphan designation for a drug under the nonprofitability provision to demonstrate that all succeeding drugs eligible for the designation have no reasonable expectation of recovering research and development costs.

Drugs that exist thanks to the Orphan Drug Act have saved lives, and future lives depend on this law continuing to work well. We cannot allow mischief and mayhem to stand in the way of the mission of the law and the incredible outcomes it has produce for people across the country.

The time is right for the Congress to close this loophole.

Diane Dorman served for 15 years as vice president for public policy for the National Organization for Rare Disorders, which represents patients and patient organizations with rare diseases.