CORRESPONDENCE

Orphan Drug Policy

The predominant challenge for persons with rare diseases and conditions is finding and seeing through the development process new therapies and cures for these orphan conditions. The Orphan Drug Act. passed by US Congress in 1983, has been a remarkable suc­cess in moving towards that goal. Despite years of congressional review and numerousextraneouscontro­versies, the strength of the original law has remained unshaken. Congress knew that without financial in­centives, especially market exclusivity, there would be less work on orphan diseases and conditions. Now is not the time or the place to undermine that success with unnecessary or untried social engineering of the type suggested by Peabody et al.l ll

Genentech is a leading biotechnology firm. Genen­tech ha~ spent hundreds of millions of dollars on research related to drugs for persons with rare diseases. We are proud to have developed new therapies for persons with diseases like chronic granulomatous disease and condi­tions such a<; short stature resulting from chronic renal insufficiency. These successe~ are. in large part. due to the certainty that sterns from the law's promise of market exclusivity. Despite numerous attempts at fme-tuning the law. the best way to continue the pattern of success under the Orphan Drug Act is to leave the law alone.

References

Dr Todd Rich Health Economics and

Reimbursement Planning Genentech. Inc ..

San Francisco. USA

I. Peabody JW. Ruby A. Cannon P. The economics of orphan drug policy in the US: can the legislation be improved" Phar­macoEconomics 1995: 8: 374-84

The authors reply:

PhotmocoEconomtCs 1996 Aug. 10 (2) 191-192 1170-71f1O/96/00J8-QIQ I /SO I0010

,~. AdlS Infe m QtlonolLJmrfed An fighTS reserved

We welcome the interest in our analysis but wonder if Dr Rich has had the opportunity to read the entire article. At a minimum. we share his observation that legislation is needed £0 increase the availability of or­phan drugs for persons with rare disorders. Our con­cern. however. is that the current incentives are limited and that they need to be strengthened to promote re­search into otherwise unprofitable orphan diseases.

We show, in our model and analysis. [II that the suc­cess of the 1983 Orphan Drug legislation lies firmly with market exclusivity. The other 3 features of the legislation have been ineffective. We thus concluded that market exclusivity should not be changed. while the other provisions need to be strengthened. Indeed. since we wrote the article. the number of orphan drug designations has continued to decline - a troubling finding that can be addressed by legislative reform.

One of the main threats to the existing orphan drug legislation comes from critics who argue that it confers an unfair monopoly advantage to a select group of private producers. This has already prompted efforts to radically reform the legislation. The danger of po­lemic perspectives (and an uninformed debate) is that they can result in radical or bad reform. The legislative goal instead should be to better align private incentives with desirable public policy outcomes.

This is the issue that should concern Dr Rich. PoLicy­makers are challenged to find a better balance between incentives that confer huge monopoly profits on drug producers for orphan research (regardless of whether the research yields true orphan drugs) and other incen­tives that stimulate orphan research by different means. To do this. we recommend strengthening the 3 ineffective provisions and making some simple changes: ( I ) include foreign demand. especially from developing countries; (2) prioritise orphan conditions for which there is no therapy; and (3) anticipate and address legitimate public or patient opposition to the handful of orphan drugs which have made windfall profits because they are used for non-orphan conditions.

Legislating should be a dynamic process that is responsive to changing circumstances and better knowledge. There is an urgent need for more orphan drug compounds and pharmaceutical research. It is not

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the time to be content with past accomplishments but the time to learn from 13 years of experience, apply multidisciplinary analysis to a problem, and take steps to understand and improve the orphan drug legislation.

Dr John Peabody Senior Scientist RAND

Assistant Professor of Medicine West Los Angeles Veteran's Affairs Hospital

C Adis Intemattonol limited. AI rights reserved.

References

Correspondence

University of California, Los Angeles, USA

Peter Cannon RAND,

Santa Monica, USA

I. Peabody JW. Ruby A. Cannon P. The economics of orphan drug policy in the US: can the legislation be improved? Phar­macoEconomics I99S; 8: 314-84

PtoarmocoEconomlcs 1996 Aug: 10 (2)