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What Is an Orphan Drug?

Specialty Drugs for Rare Disorders

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Updated June 18, 2014

Pharmaceutical (drug) and biotech companies are constantly researching and developing new medications to treat medical conditions, and new drugs come on the market frequently. People who have rare diseases or disorders, however, have not had as much research attention in past decades. This is because their numbers are small and therefore the potential market for new drugs to treat them (commonly referred to as “orphan drugs”) is also small. A rare disease occurs in less than 200,000 individuals in the United States, or less than 5 per 10,000 individuals in the European Union. Government regulatory agencies in the United States and the European Union have thus taken steps to reduce this disparity.

The U.S. Office of Orphan Product Development
The U.S. Food and Drug Administration (FDA) is responsible for ensuring the safety and efficacy of medications on the market in the United States. The FDA established the Office of Orphan Product Development (OOPD) to facilitate the development of orphan drugs (and other medical products for rare disorders), including offering research grants.

Orphan drugs, like other medications, still have to be proven that they are safe and effective through research and clinical trials before the FDA will approve them for marketing.

The 1983 U.S. Orphan Drug Act
Recognizing that adequate drugs for rare disorders had not been developed in the U.S., and that drug companies would actually incur a financial loss in developing drugs for rare conditions, the U.S. Congress in 1983 passed the Orphan Drug Act. The Orphan Drug Act offers incentives to induce companies to develop drugs (and other medical products) for the small markets of individuals with rare disorders (in the U.S., 47% of rare disorders affect fewer than 25,000 people). These incentives include:

  • Federal tax credits for the research done (up to 50% of costs) to develop an orphan drug
  • A guaranteed 7-year monopoly on drug sales for the first company to obtain FDA marketing approval of a particular drug. This applies only to the approved use of the drug. Another application for a different use could also be approved by the FDA, and the company would have exclusive marketing rights for the drug for that use as well.
  • Waivers of drug approval application fees and annual FDA product fees.
Prior to the passage of the Orphan Drug Act, few orphan drugs were available to treat rare diseases. Since the Act more than 200 orphan drugs have been approved by the FDA for marketing in the U.S.

Committee on Orphan Medicinal Products
Established in 1995, the European Medicines Agency (EMEA) is responsible for ensuring the safety and efficacy of medications on the market in the European Union (EU). It brings together the scientific resources of the 25 EU Member States. In 2000, the Committee on Orphan Medicinal Products (COMP) was established to oversee the development of orphan drugs in the EU.

Regulation on Orphan Medicinal Products
Like the U.S. Congress, the EU government recognized the need to increase research and development of orphan drugs. The Regulation on Orphan Medicinal Products, passed by the European Council, provides incentives for the development of orphan drugs (and other medical products for rare disorders) in the EU, including:

  • Waivers of fees relating to the marketing approval process
  • A guaranteed 10-year monopoly on drug sales for the first company to obtain EMEA marketing approval of a drug. This applies only to the approved use of the drug.
  • Community marketing authorization – a centralized procedure of marketing authorization which extends to all the member states of the EU
  • Protocol assistance, meaning the provision of scientific advice to drug companies about the various tests and clinical trials necessary for a drug being developed.
The Regulation on Orphan Medicinal Products has had the same beneficial effect in the EU that the Orphan Drug Act had in the U.S., greatly increasing the development and marketing of orphan drugs for rare disorders.

Sources:

Overview. European Medicines Agency. 15 Nov 2006

Summary of EC Incentives. Committee on Orphan Medicinal Products. Aug 2006. European Medicines Agency. 15 Nov 2006.

OOPD Frequently Asked Questions. Office of Orphan Products Development. U.S. Food and Drug Administration. 12 Nov 2006

OOPD Program Overview. Office of Orphan Products Development. U.S. Food and Drug Administration. 12 Nov 2006

The Orphan Drug Act (as amended). Office of Orphan Products Development. U.S. Food and Drug Administration. 12 Nov 2006

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