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Executive Summary

DRUG ABUSE TREATMENTS OFFERED ORPHAN-LIKE EXCLUSIVITY IN SENATE BILL passed by the full Senate Oct. 5. The bill (S 1711), an anti-drug abuse measure, was approved with an amendment by Sen. Biden (D-Del.) to set up an incentive program modeled on the Orphan Drug Act which would encourage the development of treatments for drug abuse. Under the amendment, the incentive program will be administered by FDA and will operate parallel to the orphan drugs program. The plan will require separate funding, which will be requested in the fiscal 1991 budget for FDA. As a result, the new incentive program will not get underway until at least Oct. 1, 1990. The Biden provision was originally structured to amend the Orphan Drug Act to define drug abuse treatments as orphan products. However, due to objections from other senators, including Sen. Hatch (R-Utah), the provision was changed. Language in the earlier version of the amendment would also have stripped orphan exclusivity from drugs with unreasonably high prices. Withdrawn prior to the floor vote, it was proposed by Senate Labor & Human Resources Committee Chairman Kennedy (D-Mass.). The provision was strenuously opposed by the Industrial Biotechnology Association and the Pharmaceutical Manufacturers Association. The National Organization for Rare Disorders (NORD) also questioned the need for the proposal. The Kennedy provision would have amended the Orphan Drug Act to add a third reason to the two existing reasons in the law for removing exclusivity from a product. Under the proposal, exclusivity would be withdrawn if: "the [HHS] Secretary finds that the price of the drug is not reasonable considering the research, development, and production costs of such drug and the price is preventing individuals in need of such drug from gaining access to it." Currently, exclusivity is not granted if a manufacturer's production capability is inadequate to meet the demand for a product or when a firm agrees to give up exclusivity through a licensing agreement or similar arrangements. PMA opposed the Kennedy plan in an Oct. 3 letter. Association President Mossinghoff told Kennedy: "It is our understanding that an amendment may be introduced that would result in retroactive shared exclusivity for certain orphan drugs. PMA agrees with the February 27, 1989 Report of the National Commission on Orphan Diseases that the current incentives of the Orphan Drug Act should be strengthened rather than weakened." In a press release issued the next day, PMA stated: "There have been no hearings or opportunity for public comment on the Kennedy amendment. The Senate should not consider such an important issue in a vacuum." NORD told Kennedy in an Oct. 4 letter that "the issue of pricing of orphan drugs is contentious in a very few well-known cases. However, for most orphan products pricing has not, and will not, become an issue. NORD remains convinced that the best solution to handling this problem is on a case-by-case basis, as recommended by the National Commission on Orphan Diseases." * NORD also urged that Biden's original proposal be introduced as legislation separate from, and not an amendment of, the Orphan Drug Act. "Review of the proposed language of the legislation reveals that it will be a total revamping of the Orphan Drug Act and may seriously endanger its effectiveness for patients with rare diseases," NORD said. Legislation limiting the profits earned by companies under the exclusivity provisions of the Orphan Drug Act have been of continuing concern to Kennedy and Hatch. In the House, Rep. Waxman (D-Calif.) retains his interest in removing orphan incentives for high-priced drugs; however, to date, he has not introduced similar provisions.

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