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ORPHAN DRUG COMMERCIAL CEILING OF $ 25 MIL. ANNUAL SALES

Executive Summary

ORPHAN DRUG COMMERCIAL CEILING OF $ 25 MIL. ANNUAL SALES is included in a proposal being floated for comment by Rep. Waxman (D-Calif.). Proposed as a potential substitute for his Orphan Drug Amendments (HR 3459), passed by the House Commerce Committee in October, the draft would redefine orphan products as those with a total annual market value of less than $ 25 mil. A summary explains that if the market value, which includes "all sponsors and all orphan uses," exceeds the threshold within any 12-month period, then the product's market exclusivity is terminated. Currently, orphan designations are available for drugs to treat conditions occurring in less than 200,000 patients. Because the legislation also proposes to permit multiple, "simultaneous" developers of an orphan product to share exclusive markets, FDA would be required to "aggregate the sale of all" sponsors of a given orphan drug. Consequently, each sponsor would be required under the proposal to report orphan product sales to FDA when they reach $ 15 mil., and the "report shall be certified by an independent accountant." Waxman's proposal would meet resistance from PMA and possibly FDA. The agency historically has been averse to monitoring sales records, and PMA, which to date has been neutral on Waxman's bill, reportedly will vigorously oppose provisions tied to a cap on sales. A "simultaneous development" section of the proposal would permit FDA to approve subsequent products on the market during a first orphan drug's exclusivity period if the subsequent sponsors are "eligible" and file full, not abbreviated, marketing applications. The proposal defines an eligible company as one that files for an IND exemption before the later of two events: the first submission of an NDA after orphan status has been granted or the first designation of the orphan drug after an NDA has been submitted. The provision encourages first developers to request orphan designation as early in the review process as possible. To be considered eligible to share market exclusivity as a simultaneous developer, a company "must request designation of their drugs, if they are not already designated, within 60 days of becoming eligible," according to the summary. The intent of this provision is to notify "all other parties of the presence of an eligible" company.

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