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Executive Summary

Enzon is proposing to limit market exclusivity under the Orphan Drug Act by basing the length of an orphan product's market protection on the size of the target patient population. In a May 8 letter to House Energy & Commerce/Health Subcommittee Counsel William Schultz, Enzon President Abraham Abuchowski, PhD, proposed "the development of a tiered approach to orphan exclusivity, in which the duration of exclusivity is inversely proportional to the number of patients to be treated by the orphan drug in question." Under the plan, exclusivity periods of eight years would be granted for orphan drugs indicated for populations of less than 5,000 patients; seven years for drugs targeted at populations under 10,000; six years for patient populations under 25,000; five years for patient populations under 50,000; four years for patient populations under 100,000; and three years for patient populations under 200,000. Enzon's proposal is one of several recent alternative proposals to legislation introduced by House Health Subcommittee Chairman Waxman (D-Calif.) and Sen. Metzenbaum (D-Ohio) to amend the Orphan Drug Act. The legislation would allow drug sponsors that simultaneously develop an orphan product to share market exclusivity and would eliminate exclusivity once the patient population for an orphan product exceeds 200,000 ("The Pink Sheet" April 30, p. 10). Abuchowski emphasized that he opposes "shared exclusivity" for simultaneously developed products, which is provided under amendments introduced by Health Subcommittee Chairman Waxman (D-Calif.). Although "the development of drugs for larger rare disease populations can be adequately enticed with less than seven years exclusivity," Abuchowski said, "I am adamantly opposed to shared exclusivity in all cases. I consider shared exclusivity to be the same as no exclusivity." Abuchowski asked Waxman's aide to help persuade the Industrial Biotechnology Association to embrace the Enzon proposal. IBA has opposed amending the Orphan Drug Act. "Over the next several weeks I will be working within the IBA to achieve formal reconsideration of the present association position of no compromise. Your support would go a long way in helping me to convince the IBA to support my position." Abuchowski maintained that the tiered exclusivity "arrangement...satisfies all interests" by providing "an extended period of exclusivity for orphan drugs developed to treat very rare diseases" but offering "limited exclusivity in the cases where there is sufficient patient population to quickly recoup investment costs." In the case of high-volume products, Abuchowski said, "this approach would lead to product competition earlier in the market cycle and serve to open the door for potential cost savings to consumers. Conversely, there is clearly no benefit to the consumer" through lower prices "from early competition in drugs designed to treat very small patient populations since two drug companies would have to recoup their research and development investment." Therefore, amending the act to allow shared exclusivity for simultaneously developed products would result in prices "arbitrarily high for a longer period of time." Enzon markets the orphan product Adagen, indicated for severe combined immunodeficiency disease (SCID), the letter notes. SCID has a patient population of 14. Upjohn is proposing to eliminate the so-called "salami-slicing" practice of seeking orphan status by developing artificially narrow indications for significant therapies with potentially large patient populations. Under the Upjohn plan, the orphan threshold of 200,000 patients would be based on the potential patient population of all diseases for which the drug might be used, rather than on a narrow orphan disease alone. In an April 26 letter to Waxman, Chairman Theodore Cooper, MD, maintained that "an unintended outgrowth" of the orphan drug law is the design of "research protocols to inappropriately selected patient populations, narrowly defined to fall within the 200,000 patient limits of the act." Cooper said "this is done despite the clear evidence that the drug will be useful in patient populations that would not qualify" a drug as an orphan. "Such a situation exists with EPO [erythrypoietin], which was approved for chronic renal failure when it was clear that drug would be used for other diseases associated with anemia," Cooper said. Upjohn and potential comarketers Chugai and Genetics Institute are prevented from marketing their EPO product by the market exclusivity of Amgen's Epogen. Cooper called the EPO situation an "abuse" that is "preventing Upjohn from entering the market despite the fact that we [Genetics Institute] hold the valid product patent" for EPO. "Other examples of this abuse include products like GS-SF [granulocyte colony-stimulating factor] and interferon alpha 2b," he added. Upjohn "is supportive of [Waxman's] legislative effort" and believes "certain changes to the orphan drug law are necessary to preserve the integrity of the act," Cooper continued. However, Upjohn does not support Waxman's proposal for shared exclusivity for simultaneously developed products. "There may be other alternatives which you may consider," Cooper suggested. The Enzon and Upjohn proposals indicate their belief that Waxman is intent on amending the act this year or in the next Congress. The California Democrat reportedly believes that Congress will totally dismantle the law in the future if the government must pay increasingly high prices for an increasing number of potentially widely used products deliberately developed with narrow indications. The proposals also indicate a willingness of individual companies to break from their respective trade associations -- Enzon from the Industrial Biotechnology Association and Upjohn from the Pharmaceutical Manufacturers Association -- which have remained adamantly opposed to amending the Orphan Drug Act. In a May 2 comment on the Waxman/Metzenbaum legislation, IBA said: "Our philosophy is, if it ain't broke, don't fix it." The market for orphan drugs "is usually extremely limited and clinical trials are often more expensive. These factors mean that market exclusivity is a major factor for companies deciding whether to invest in research programs for rare diseases." HHS Assistant Secretary for Health James Mason told a May 3 symposium in Washington he does not currently believe the Orphan Drug Act needs to be amended. The meeting was cosponsored by PMA and the National Institutes of Health. Noting that the bill reopens the debate on amendments to the law, Mason pointed out that "if the coming debate" brings to light "true problems in [the Orphan Drug Act's] administration and outcomes, then by all means let's fix what's wrong." However, he cautioned, "let's not undermine the intent of what I believe is one of the more creative, productive inventions of public health policy of recent years. In short, let's not fix what isn't broken, lest we break the promise of this act for the millions of Americans who have benefitted or may one day benefit from it." The Association of Biotechnology Companies supports the Waxman/Metzenbaum measure. "ABC is concerned that there has been a misuse of the Act to obtain market exclusivity for products that clearly are not orphans for various reasons," the group told the congressman in a May 3 letter. The National Organization for Rare Disorders also supports the Waxman/Metzenbaum bill. NORD's board and membership voted to support the bill at a May 7 meeting. The Orphan Drug Act's seven-year market exclusivity for sponsors of approved orphan drugs would be shared, under the Waxman bill (HR 4638), with other orphan products "developed simultaneously" but approved by FDA after the original orphan product. The bill is expected to be marked up by Rep. Henry Waxman's (D-Calif.) Energy & Commerce/Health Subcommittee in the next two weeks. Meanwhile, the White House Working Group on Biotechnology, which is chaired by former National Institutes of Health Director James Wyngaarden, met May 8, reportedly to discuss the proposal.

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