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Executive Summary

ORPHAN DRUG LEGISLATION REPORTED OUT OF SENATE LABOR & HUMAN RESOURCES Committee July 1 by voice vote. The revised version of S 2060, sponsored by Sens. Metzenbaum (D-Ohio) and Kassebaum (R- Kan.) retains the original bill's $200 mil. sales trigger but with a number of modifications agreed to by the sponsors in order to gain wider committee support. During the markup, committee Ranking Republican Hatch (Utah) and other members said they had agreed to let the bill pass out of committee but would seek a number of further changes before the measure is taken up by the full Senate. Hatch, in particular, objects to the sales "cap" (his term) contained in the bill and has suggested that legislators instead look at some way of providing financial assistance to patients who cannot afford the therapies ("The Pink Sheet" June 22, p. 11). Hatch said he had been asked by Metzenbaum to allow the bill to proceed out of committee. During the voice vote, however, he was among several senators who loudly voted "no" on the bill. When Sen. Pell (D-R.I.), who was temporarily chairing the committee, looked over at Hatch and said the "ayes appear to have it," no objections were raised. Hatch said at the markup that it might be possible to "fashion an acceptable alternative" that could be signed into law this year. However, it may be hard to find a middle ground between Hatch's opposition to the sales "cap" and Metzenbaum's emphasis on the sales "trigger." Noting that the "sticking point" has been the sales trigger, Hatch asserted: "The problem that I have with the sales cap or 'trigger' is that it is attached to a gun pointing squarely at the heart of the orphan drug development process." Hatch remarked that the current version of the bill is "assured" a presidential veto and several senators reportedly have agreed to place a "hold" on the bill, which effectively blocks consideration by the full Senate. While Metzenbaum told the committee that he is willing to continue work on the bill before floor debate, he has been equally insistent that the sales trigger is the best way to focus the orphan drug program on drugs of little commercial value. The bill reported out by the committee would extend the period of marketing exclusivity for orphan drugs to nine years, rather than the seven in current law. After two years, FDA could consider approval of a competitor drug if sales of an orphan drug exceeded $200 mil. While a two-year minimum period of exclusivity would be provided, sales toward the $200 mil. threshold would be counted starting from the drug's date of FDA approval. Products already on the market would be guaranteed a minimum of five years exclusivity, although again sales would be counted from the FDA approval date, according to a committee summary of the legislation. "For orphan drugs in the pipeline (still in testing or awaiting FDA approval), the Act's effective date would be delayed for two years. Those drugs approved in the interim between the bill's enactment date and the effective date also would be eligible for the two-year minimum period of exclusivity protection. The practical effect would be to provide up to a maximum of four years of exclusivity protection" for products now in the pipeline, the summary explains. Sen. Mikulski (D-Md.), who gave her unqualified support for the Metzenbaum/Kassebaum proposal, offered her own ideas for enhancing the "creativity" of the pharmaceutical industry -- reauthorizing the National Institutes of Health; improving intellectual property laws; updating antitrust laws, for example, to allow companies to work in consortia arrangements; and modernizing FDA's campus. Mikulski has been a key congressional proponent of consolidating FDA's Washington, D.C.-area facilities ("The Pink Sheet" June 15, T&G-10) and said drug companies are "stacked up like planes over La Guardia" in seeking attention from FDA because the agency's efficiency is hampered by outmoded facilities. Other committee members speaking on the bill included Sen. Coats (R-Ind.), who opposed it, Sen. Dodd (D-Conn.), who noted his "mixed feelings," and Sen. Simon (D-Ill.), who supported the bill but with unspecified "concerns." While most members said they did not want to speak at length on the bill given what they viewed as the foregone conclusion of the committee vote, they spent at least an hour and a half reviewing virtually all of the arguments on both sides of the bill. Senate Aging Committee Chairman Pryor (D-Ark.) sent the committee a July 1 letter expressing "strong support" for the Metzenbaum/Kassebaum measure. The $200 mil. trigger "would be a first step in providing a market-based approach to reducing the astronomical price of these so-called orphan drugs," Pryor contended.

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