Orphan drugs market exclusivity

Inaddition t. patents and orphan drug market exclusivity for a specific indication, another potential barrier to Competition fOr an orphan... 

A developer may apply to have a new drug designated. Designation entitles the developers to avail themselves of the same type of incentives in terms of supports and market exclusivity that apply to human orphan products. 

In order to encourage pharmaceutical companies to invest in orphan drug development, legislation provides for a number of incentives. These include application fee waiver (the extent of reduction varies with the region of the world, and in the European Union it is 50% for all fees since 2002), market exclusivity and protocol assistance. In the European Union, there is 100% reduction in the fee applicable to the provision of any scientific advice. The fund made available by the Community for fee exemptions for orphan medicinal products amounts to= 3 700000 in 2005. 

Recent development highlighted a shift in FDA position and interpretation of the market exclusivity clause. Under the orphan designation, three interferon products, Betaseron (IFN-pib), Avonex (IFN-pia) and Rebif (IFN-pia) are currently approved for treatment of multiple sclerosis (MS). The interplay in drug safety and efficacy consideration, business strategies, and regulatory rationale permitting approval of the three drugs for MS treatment is discussed in Box 3.5. 

BOX 3.5. HOW MARKET EXCLUSIVITY COULD BECOME NONEXCLUSIVE FOR DRUGS WITH ORPHAN DESIGNATION... 

The orphan drug regulations allow a sponsor of an orphan-designated drug a period of marketing exclusivity, free from Continued on next page)... 

But if pharmaceutical companies focused exclusively on these major diseases, millions of people with very serious but less widespread conditions would be left without help or hope. The solution, of course, is for the government to provide incentives that supplement the potential sales value of an important treatment for a relatively obscure disease, thus encouraging development in the absence of market blockbuster potential. In the United States, the mechanism for that encouragement is orphan-drug designation. 

Those orphan drugs that command high prices have generated intense controversy over whether the market exclusivity provision is creating an unnecessary monopoly, keeping prices artificially high. One example is recombinant human erythropoietin (r-EPO), intended for patients with chronic renal failure-related anemia. 

At the time of writing, the market exclusivity provisions of the Orphan Drug Programme were not fully operational. 

Market exclusivity is awarded for certain uses for a drug product, such as to treat or prevent orphan diseases. In this case, the most powerful incentive for a company to develop a product with a small target population is the Orphan Drag Act s market exclusivity clause. 

It is important to note that medical foods and medical devices were not eligible for orphan drug designation or for the marketing exclusivity provisions of the Act. The Act was originally designed for unprofitable and unpatentable medicines only. 

Within the Act itself, the four major benefits are (1) the period of marketing exclusivity, which may be considered as a type of patent (2) the tax benefits on clinical trials between the date of orphan drug designation and NDA approval and (3) the FDA s Office of Orphan Products Development grants to support clinical trials on orphan drugs. A fourth benefit of protocol assistance, from the FDA, was always available for important new drugs (as well as others) and is important, but not necessarily new. Nonetheless, it is useful to call attention to this provision. 

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