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REP. WAXMAN's DOLLAR-BASED ORPHAN DEFINITION

Executive Summary

REP. WAXMAN's DOLLAR-BASED ORPHAN DEFINITION would "kill" industry interest in orphan drug research, National Commission on Orphan Drugs Chairman Glenna Crooks, PhD, contended at a Jan. 20 FDA seminar. Amending the Orphan Drug Act to redefine orphan products as those with annual sales of less than $ 25 mil. "is going to be a considerable disincentive to the industry" that probably will "be sufficient enough to kill the industry's interest in pursuing this research," Crooks maintained. Furthermore, a definition of orphan drugs that sets a cap would "not account for the fact that many of these drugs are extremely expensive to produce," Crooks continued. "There is a possibility that some" drugs might reach the $ 25 mil. annual threshold without "returning any investment whatsoever to the company." A consultant with the D.C. firm Pagonis & Donnelly, Crooks was referring to a proposal being circulated by Rep. Waxman (D-Calif.). The proposal was developed as a substitute for his Orphan Drug Amendments, already passed by the House Commerce Committee. Crooks, who chaired the HHS Orphan Products Board as an HHS deputy assistant secretary for health, said the very fact that such legislation is being considered could have a chilling effect on industry pursuit of orphan drug research. "In my view not only the elements of this change, but the fact that such elements and such changes are being considered, are going to lead the industry to question the integrity of the act and are going to lead them to fear that the rules can be changed today; and therefore, the investment they make today toward this venture will be too great a risk for the company to pursue," she said. For example, Crooks questioned how research directors could justify to legal and financial officials or corporate boards investments "in the development, production, and marketing of a product, which they may not be able even to claim as their own and therefore not only lose money but lose big money." The Waxman proposal may also cause difficulties for FDA, Crooks maintained. The responsibility for monitoring whether an orphan drug sponsor has reached the maximum sales threshold would rest with FDA, Crooks said. Upon reaching $ 15 mil. in revenues, a company would be required to submit its sales data to an independent financial audit to verify that in fact the $ 25 mil. threshold has not been reached, she explained. A second, key element in the proposal would permit follow-up companies to share the exclusive marketing rights for an orphan product if the subsequent sponsors had filed an IND for the product before the first sponsor received approval. The provision is intended to address the issue of simultaneous development of an orphan product by multiple companies. Crooks said the industry prefers this provision to the pending bill passed by the House Commerce Committee because it provides greater protection of market exclusivity. Waxman's new proposal represents "a closing somewhat of the window of opportunity [to subsequent developers] that is in the current committee version," she said. "In that sense, it will be received better by the industry." Waxman's current bill permits any subsequent developer willing to file a full NDA to share, upon receiving approval, the first sponsor's exclusive market.
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