- Public Citizen's analysis relied in part on a report from Evaluate Pharma showing clinical trial costs for orphan drugs are often lower than other drugs, but on average cost patients six times more.
- The House-passed 21st Century Cures Act incorporates a provision which increases the existing seven-year exclusivity period by six months. Public Citizen has said this could cost taxpayers and insurers an extra $3.9 billion to $11.6 billion over a 10-year period.
- This provision could increase tensions between consumer advocates wary of pricing leverage against patients advocates eager to see new cures for rare diseases come to market.
Each year, more drugmakers seek approval for orphan drugs and gain FDA approval. The drugs can command higher prices, although clinical trial costs are often lower. The patients who need these drugs are essentially a ‘captive audience’ for drug companies seeking to develop new therapeutic spaces.
The Orphan Drug Act of 1983 had originally been conceived to spur development of drugs for rare diseases affecting less than 200,000 people. The House overwhelmingly passed the 21st Century Cures Act in July, which would extend the 1983 act’s data exclusivity provisions. But this provision may push consumer and patient advocates into opposing camps. Consumer advocates are eager to limit the leverage drug companies have over captive patient populations. But patient advocates desire new cures to come to market as fast as possible – something further data exclusivity would incentivize.
Public Citizen has asserted many companies use loopholes to categorize more drugs as 'orphan drugs,' thereby gaining all of the attendant tax and exclusivity benefits. This analysis is based on a paper recently published in the American Journal of Clinical Oncology.
Public Citizen's increased cost estimates are on the high side compared to other estimates. The Congressional Budget Office has estimated an additional six months of exclusivity for orphan drugs would cost an additional $869 million between 2016 and 2025. But, Public Citizen's estimates are more comprehensive because they factor in direct costs to the government in addition to costs to taxpayers and insurers.
The Senate has still to take up the 21st Century Cures Act, but the fault lines between innovation and pricing will merit watching as the various groups lobby the bill.