Dive Brief:
- Biotechnology Innovation Organization (BIO) President Jim Greenwood, in his latest post defending the Orphan Drug Act, said a new study suggests widespread concerns about skyrocketing costs about drugs for rare conditions are "completely misguided."
- Greenwood cited a Kaiser Health News report about a paper published in Health Affairs that said orphan drug spending "will remain fairly stable as a proportion of total drug spending," contrary to other reports showing that orphan drug costs will continue to grow.
- With Greenwood leading the way, the industry organization is reacting strongly against publicity questioning impact of orphan drug development, including America’s Health Insurance Plans. He previously criticized an article in The Washington Post, which accused elements of the drug industry of undermining the act through outlandish prices of drugs.
Dive Insight:
Greenwood’s pushback is not unexpected, and timing is everything.
As pharmaceutical companies continue to take advantage of the opportunities the Orphan Drug Act affords -- including shorter review timelines and longer market exclusivity, opponents only see explosive costs as a result.
The pharmaceutical industry, which Greenwood represents, sees continuing support of the Orphan Drug Act as necessary to fuel drug development for rare diseases, but opponents say it has been twisted to inflate profits. Critics note that some companies are using the benefits for drugs that can be developed for both rare and large disease populations.
"The Orphan Drug Act has been targeted recently by the insurance industry and its allies in the media, but in the face of withering criticism and unjustified allegations, a new study from IMS Health shows that concerns about rare drug costs are completely misguided, ” Greenwood wrote.
The IMS Health researchers analyzed U.S. drug spending over six years until 2013 on more than 300 orphan drugs and found that total pharmaceutical spending only increased from 4.8% to 8.9%, according to the Kaiser report.
"While rebutting claims that rare disease drugs are becoming a large percentage of overall prescription drug spending, the results also confirmed the importance of the Orphan Drug Act," Greenwood wrote.
The Orphan Drug Act faces intense scrutiny on Capitol Hill, in which legislation to reframe it has languished, with proponents and opponents at loggerheads, with some saying it would help drug companies get in the door for more approvals, and others saying it is too favorable to special interests and undermines safety policies.