Seeking to boost competition in the pharmaceutical industry, the House passed a bill that would close a loophole in a law that was meant to encourage development of rare disease drugs, but that had inadvertently precluded availability of lower-cost versions of medicines.
The legislation was proposed last year after a company complained that it was unable to win approval from the Food and Drug Administration to sell an opioid addiction treatment because of a stipulation in the Orphan Drug Act. The provision offers what critics have called a loophole that allowed some drug manufacturers to unfairly monopolize a market, causing consumers to pay higher prices.
Here’s the deal: the Orphan Drug Act offers seven years of marketing exclusivity for medicines that are approved to treat a disease that affects less than 200,000 people in the U.S. But for diseases or conditions that afflict more people, the law provides the same exclusivity based on the expectation that research and development costs will not be recovered by sales.