First 'orphan drug' hESC therapy

The US Food and Drug Administration (FDA) granted Advanced Cell Technology's (ACT) embryonic stem cell-based therapy for Stargardt's Disease the coveted title of being an Orphan Drug -- a designation aimed to promote "the development of products that demonstrate promise for the diagnosis and/or treatment of rare diseases or conditions," according to the FDA's website.

With this new status, ACT's therapy is eligible for tax credits, access to certain funding for clinical trials, and marketing exclusivity for as long as seven years after it is approved. The company says it plans to use the new orphan designation "to accelerate clinical development" of the therapy, which has yet to enter human trials.

Will the new title really make a difference in how long it takes this therapy to get to market? And how will the orphan status affect its success once it gets there?

--Jef Akst, Associate Editor, The Scientist

"Orphan drug" designation can shorten the time it takes to get an orphan drug to market -- not because clinical trials can be conducted any more rapidly, but because companies that otherwise wouldn't spend the money on such trials (therefore delaying the progress to market) can get federal money to help defray those costs.

I'm not sure how the designation will help the company after the drug enters the market. Even with market exclusivity (which new drugs have anyway, for anywhere between 5 and 15 years, depending on the original patent date), the market is, by definition, small. If the drug turns out to have off-label uses that make it appropriate for a broader population (think the anti-depressant Wellbutrin, now marketed as a stop-smoking aid under the name Zyban), the company's profit opportunities are greatly improved.

MegTS1141949 wrote:"Orphan drug" designation can shorten the time it takes to get an orphan drug to market -- not because clinical trials can be conducted any more rapidly, but because companies that otherwise wouldn't spend the money on such trials (therefore delaying the progress to market) can get federal money to help defray those costs.

I'm not sure how the designation will help the company after the drug enters the market. Even with market exclusivity (which new drugs have anyway, for anywhere between 5 and 15 years, depending on the original patent date), the market is, by definition, small. If the drug turns out to have off-label uses that make it appropriate for a broader population (think the anti-depressant Wellbutrin, now marketed as a stop-smoking aid under the name Zyban), the company's profit opportunities are greatly improved.

"Orphan" drug status is a HUGE money-maker if it's successful in the clinic and approved. Did you kow that every single one of the 9 most expensive drugs on the US market is an orphan? From #1 Soliris (for PNH, at $409k per patient per year) to #9 Aldurazyme (for Hurler syndrome, at $200k per patient per year), they have market exclusivity for 7 years and no competition. However, each one of them is highly specific and thus extremely unlikely to have any off-label use, -even if one could afford them. Nick MD PhD

Holy cow! But that begs the question: If orphan drugs are so lucrative, why do companies need help from the feds to test them and bring them to market?

"..So why do companies need help from the feds...?" you ask.
Easy. There are only a few hundred people with each of these conditions. No Pharma wants to spend approx $500M to bring a drug for so few customers to market. That's why they're called "orphans". And that's also why the feds give grants and tax breaks and post-marketing protection to companies as inducements to develop them. The program was enacted in 1983. Nick

That argument doesn't really make sense, though. Either orphan drugs are "huge money-makers" or they're not worth the R&D investment and thus need federal support -- you can't have it both ways (although the pharma companies are having it both ways right now). All I'm saying is that it isn't logical.

JefTS1077333 wrote:The US Food and Drug Administration (FDA) granted Advanced Cell Technology's (ACT) embryonic stem cell-based therapy for Stargardt's Disease the coveted title of being an Orphan Drug -- a designation aimed to promote "the development of products that demonstrate promise for the diagnosis and/or treatment of rare diseases or conditions," according to the FDA's website.

With this new status, ACT's therapy is eligible for tax credits, access to certain funding for clinical trials, and marketing exclusivity for as long as seven years after it is approved. The company says it plans to use the new orphan designation "to accelerate clinical development" of the therapy, which has yet to enter human trials.

Will the new title really make a difference in how long it takes this therapy to get to market? And how will the orphan status affect its success once it gets there?

--Jef Akst, Associate Editor, The Scientist

i believe it will make a difference

You misunderstand me. They are huge money-makers BECAUSE of the fed's orphan drug program. I don't think the feds fully anticipated the wind-fall for those pharmas, mostly small biotechs with just one or a very few products, when they enacted the program. But it would be politically difficult if not impossible to change it now. Most of the beneficiaries, -the patients, are mostly infants and young children with rare genetic disorders. Their parents and relatives are organized into highly motivated and politically active support groups. Nick

Thanks for the clarification, Nick. Do you know whether these companies have to repay any of the federal support if their drug is successful? It makes sense to me to provide incentives to get the R&D going, but not necessarily to provide massive windfalls when the product hits the market. If a relative of mine needed an orphan drug, I'd be pushing as hard as anybody for the R&D incentives. But from a fiscal responsibility standpoint, it seems to me that these companies, if their drugs are successful, should pay back at least some of the funds that helped them become successful in the first place. Meg

Re paybacks, I couldn't agree more! I don't know for sure but I'm almost certain there is no payback requirement. I also doubt that any legislator thought about paybacks when they passed the orphan drug bill. -Is there anything familiar about that story? Nick