Impact of the Orphan Drug Act on Rare Disease Patients and the Pharmaceutical Industry

The Orphan Drug Act (ODA) of 1983 changed the way pharmaceutical and biotech companies thought about rare diseases, and most importantly, generated the development of life-saving and life-altering treatments for millions of patients around the world. On the 40th anniversary of the ODA in the United States, we asked Alira Health’s Jennifer Lannon, Director of Patient Advocacy and Partnerships, and Xavier Prugnard, Senior Director Regulatory Affairs, to reflect on the law and its impacts, both on life sciences companies and how they approach product development, and on patients with rare diseases and how to engage with them to successfully bring treatments to market.

Published on:
February 28, 2023
The ODA created momentum for research and development, and ultimately, has made life-saving and life-altering therapies available to many Americans with rare diseases.
What drove the creation of the ODA and what’s been the impact?

Prior to 1983, few pharmaceutical companies were focused on creating drugs to treat rare diseases. With few patients affected by each individual disease, there was little incentive for pharma to invest in research and development, and the lack of a large group of patients for clinical trials also made approval of rare disease drugs difficult. However, approximately 10% of the population suffered from a rare disease, and had been suffering from the lack of available therapies.

In the United States, rare disease patients and their families and caregivers began to connect in an effort to support one another, eventually forming the National Organization for Rare Disorders (NORD), a powerful Patient Advocacy Group (PAG), to drive awareness of this problem and ask for legislative help. Some of the diseases in question were Gaucher disease, Tourette Syndrome, Huntington’s disease, severe combined immunodeficiency disease, and many others, including rare cancers. In the years before the ODA, only 38 drugs for rare diseases had been approved by the Food & Drug Administration (FDA).

The ODA was passed by the U.S. Congress in January 1983. In the 40 years since, 600 “orphan” drugs for rare diseases have been approved, and expansions to previously unidentified orphan indications make up another 500. Clearly, the ODA has had a major impact on pharmas and on patients struggling with these conditions. Today, according to NORD, more than 25 million Americans have a rare disease. 7,000 rare diseases have been identified, yet over 90% do not have an approved treatment, and even fewer have a cure. While much progress has been made in the 40 years since ODA was passed, there is still much more to be done.

What benefits did the ODA offer pharmaceutical and biotech companies?

The ODA allows pharma and biotech companies to apply for and receive an Orphan Drug Designation (ODD) from the FDA for a drug or biological product, targeting a rare disease. Drugs can qualify for an ODD if they treat a disease affecting less than 200,000 US residents (or if the disease affects more than 200,000 US residents but there is no expectation to make a return on investment). The law provided assistance from the FDA in clinical trial design, tax credits, the ability to apply for research grants, and market exclusivity for seven years, regardless of whether or not the drug is patented. After the Prescription Drug User Fee Act (PDUFA) of 1992, the ODA was amended to include a waiver for PDFUA fees for rare disease drugs. The ODA was also amended to allow exemption (except for some oncology drugs) from the Pediatric Research Equity Act (PREA) of 2003, which requires pediatric studies.

Today, many life sciences companies are able to exclusively target rare diseases or ultra-rare diseases and develop products for patients who have long lacked treatment, which would not have been possible without the ODA. Small companies, of course, need funding and tax breaks, but even for big pharma, the financial incentives were and still are motivating, especially combined with the seven-year market exclusivity.

How should companies develop a regulatory strategy for ODD approval?

Start thinking about the ODD approval process early on in your product development strategy. The sooner you apply, the sooner you can benefit from the tax credits and funding, which is particularly essential for small companies with limited resources. A proper assessment must be done prior to submitting an ODD: understand the target disease’s prevalence in the U.S., make sure it’s below the threshold for a rare disease, validate the prevalence for ODD filing via epidemiological studies, and think about the best time for requesting to get most of the benefits offered. You need to make sure your product fits the designation. You need to look at competitors who may have already developed similar drugs for similar indications. And you need to get expert feedback on whether your research and assumptions are correct.

Engaging with the FDA early in the process can help companies define their target disease and develop a more streamlined, focused, and efficient clinical development plan. You don’t want to spend resources preparing for your ODD application only to be rejected. Understand your chance of success prior to resource investment.

What should companies outside the U.S. know if they want to apply for an ODD in the U.S.?

You need to understand the specific U.S. requirements for rare diseases and ODDs, which are not exactly the same as other countries. Again, a thorough assessment prior to submitting an ODD is an imperative.

A major logistical consideration for any disease is that foreign companies need a local agent in the United States who can interact with the FDA and manage the physical submission of paperwork.

Is there similar legislation in the EU as well?

The European Union (EU) passed similar legislation, the Orphan Drug Regulation, in 2000. A rare disease is defined by the EU as affecting less than five in 10,000 European citizens. The law provides ten years of market exclusivity versus seven in the U.S. While it doesn’t provide tax credits, there are fee reductions or even waivers for SMEs from which you can benefit.

Note that proposed amendments to the Orphan Drug Regulation are currently being considered by the European Commission. Read more about Regulatory Strategy for Registering Rare Disease Products in the EU.

From your experience, what are some of the top pitfalls when it comes to orphan drugs?

One major pitfall is not maximizing the benefits of the incentives. For example, getting an ODD means that the applicant can benefit from an enhanced dialogue with the FDA on their overall clinical development plan, and receive advice on the strategy most likely to lead to successful approval. Undoubtedly, this assistance is more beneficial at an earlier stage of development.

Another common pitfall is not starting a patient registry early. Successful patient registries will be a source for trial recruitment and patient data.  Patient registries are usually hosted by/managed by PAGs, creating a shared resource for healthcare companies which is especially vital for rare diseases. A properly designed patient registry may enable you to have fewer patients in your clinical trial, using the registry patients as an external control arm. This can greatly reduce the cost and the timeline to get a drug to market.

What else should companies do to include patients in the product development lifecycle of an orphan drug?

For diseases that are not well-known, the patient’s perspective is very important. Understanding the patient journey helps developers and regulators to understand these diseases which are probably not covered in literature studies. Involving patients can accelerate your ODD approvals, decrease trial timelines, increase the likelihood of approval, increase coverage by payers, and increase patient uptake of the drug.

Start off by creating a patient knowledge center to help understand their journey, because there’s probably no literature on this disease that you can access. You must do your own research to understand what patients experience, what their unmet needs are, what current treatments exist (if any), and if they work for patients.

For a rare disease clinical trial, set up and work with a Patient Advisory Board on trial design and protocol development. You want to design a trial that patients would participate in and that will be meaningful to them so that when you seek approval, you have relevant data for regulators and payers.

When you’re developing your launch plan, involve patients again. You can co-create with patients both plain language summaries of trial results and marketing materials to make sure they resonate and drive the action that you want patients to take.

Patient engagement is important in all drug development, but when it comes to rare diseases, it’s absolutely vital.

How would you summarize the impact of the ODA?

The ODA created momentum for research and development, and ultimately, has made life-saving and life-altering therapies available to many Americans with rare diseases. The ODA generated a process of thinking differently about these diseases which are not as well-known. The development of rare disease drugs needs to be customized and it needs to involve patients.

At Alira Health, we have experience in helping clients manage rare disease product development, including meaningful patient engagement strategies and regulatory approaches.

Related news

Publications September 19, 2023
Opportunities and Challenges in the Therapeutic and CDMO Markets
Our Transaction Advisory experts have analyzed the CDMO industry trends, M&A activities, and projected growth in this CHEManager article.
CDMO Pharma
News August 31, 2023
Alira Health Named One of the World’s Best Management Consulting Firms by Forbes
Alira Health is proud to announce it has been named by Forbes as one of the World’s Best Management Consulting Firms for 2023.
Life Sciences MedTech Pharma
Events August 3, 2023
World Orphan Drug Congress Europe
We will sponsor and speak at World Orphan Drug Congress Europe, the largest and most established multi-stakeholder rare disease meeting.
Orphan Drug Rare Disease
Publications August 1, 2023
The EU Pharmaceutical Package: Impact on Orphan Medicinal Products
This article reviews the proposed changes in the EU Pharma Package for data protection related to orphan medicinal products (OMPs).
EU Pharma Regulatory
Publications July 25, 2023
Improving Access to Medicine: The Role of Pharma Companies in Emerging Markets
Our Market Access experts have identified risks and opportunities associated with improving access to medicines in emerging countries.
Market Access Pharma
Blog July 24, 2023
What EU Companies Need to Know about the U.S. Inflation Reduction Act
We spoke with our inhouse experts to learn about the significance of the US Inflation Reduction Act for EU pharma and biotech companies.
Biotech Drug Development Pharma
Publications July 11, 2023
Mid-size Pharma Accelerates Early Clinical Trial Engagement of Patients with A Rare Neurological Disease
A mid-size pharma company sought an experienced advisor who could help them engage patients for an open-label extension clinical study in a rare neurological disease.
Clinical Trials Patient Engagement Pharma Rare Disease
Welcome to Alira Health. This site is best viewed in Chrome, Microsoft Edge, or Firefox.