Orphan Drug Surge Raises Regulatory and Development Challenges

Treatments for rare conditions account for a large and growing proportion of new drugs and biotech therapies in the U.S., encouraged by favorable FDA regulatory policies for developing, approving and marketing promising therapies. More than 40% of new molecular entities in 2015 and 2016 were orphans, a level reflecting the success of the orphan drug designation program and

Jill Wechsler

expedited review pathways for breakthroughs and other innovative medicines. 

Yet, high prices on important new therapies and complaints about drugmakers exploiting loopholes in the Orphan Drug Act have led to push-back from policymakers and payers. A firestorm erupted following FDA’s controversial approval in September 2016 of Sarepta’s Exondys 51 for Duchenne muscular dystrophy (DMD), despite limited evidence of efficacy and a $300,000-a-year price tag for initial treatment. More recently, Biogen set a launch price of $750,000 for first-year treatment with its drug Spinraza for spinal muscular atrophy. And Marathon Pharmaceuticals raised eyebrows when it launched Emflaza for DMD at $89,000 a year, even though the drug was already available at low cost in Europe and the sponsor had to conduct only one fairly small study for U.S. approval. 

A recent analysis by Kaiser Health News cited biopharma companies for manipulating the rules to gain added exclusivity for drugs with mass market sales able to document an orphan indication. Congress is investigating  whether sponsors develop some orphans with an eye to expanding use to much broader indications, or “evergreening” exclusivity. Leading senators want the Government Accountability Office (GAO) to examine whether the program is working as intended, while others back legislation that codifies such exclusivity extensions. 

Meanwhile, orphan drugs will account for more than 21% of worldwide brand-name prescription drug sales in 2022, up from 6% in 2000, according to an analysis by EvaluatePharma. Sales reached $114 billion last year, but will grow to $209 billion in five years, as FDA’s Office of Orphan Products Development processed nearly 600 designation requests in 2016 and granted  more than half. Such promise has attracted major pharma companies to the field, replacing the many small biotech firms that initially focused on developing these highly targeted therapies. And contract research organizations (CROs) are looking to tap the rare disease development business. In February, PPD formed a new center to oversee development programs for orphans and pediatric therapies. 

President Trump highlighted the importance of “miracle” rare disease treatments in his address to Congress in February, which coincided with Rare Disease Day. Trump stated that the discovery of orphan drugs, as for Pompe disease, required significant reform of FDA’s “slow and burdensome approval process…. so more lives can be saved.” The National Organization for Rare Disorders (NORD) fired back that FDA is doing a terrific job of speeding rare disease treatments through the approval process and of supporting flexible R&D approaches in evaluating those therapies. 

Flexible studies

In fact, more than three-fourths of orphan drugs developed between 2008-2015 benefitted from “flexible development approaches,” which consist of less than two well-controlled studies or novel endpoints, explained Richard Moscicki, deputy director for science operations at the Center for Drug Evaluation and Research (CDER), in a February address to the World Symposium on Science. He noted that it takes three years less to develop a drug with a breakthrough designation.

At the same time, Moscicki and others emphasize that randomized clinical trials often provide valuable evidence for developing rare disease drugs. At NORD’s summit last October, Moscicki advised sponsors that including well-controlled studies in protocols can provide FDA with “good scientific information to make good regulatory decisions.” Rigorous collection of natural history data can help researchers understand the disease, and qualification of important assays and biomarkers prior to use can support efficient development and avoid the waste of clinical specimens.

More collaboration on orphan drug designations and clinical trial design by FDA and the European Medicines Agency (EMA) also promises to streamline rare disease research and approvals. The regulators have formed a formal “cluster” for sharing information on orphan drug designation, exclusivity and regulatory flexibility, including selection of trial endpoints and design of postmarketing studies. What is really needed to expedite orphan drug development, said NORD in response to Trump’s February comments, is adequate FDA funding to expand rare disease office staff expertise.