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Executive Summary

The potential profitability of orphan drug candidates -- and hence their unsuitability for orphan status -- is best predicted by the amount of foreign studies and investigations into additional indications, according to a study by Tufts University's Center for the Study of Drug Development. Foreign research activity and study of additional indications could provide an initial gauge of whether the product is likely to be a commercial success, the report asserts. The study was authored by Sheila Shulman, Brigitta Bienz-Tadmor et al. "Consideration of the two variables which reflect interest in the drug in both the U.S. and in other countries may help to forecast the drugs which, further down the road, have potential for the broader range of uses than the single indication accompanying the request for orphan status," the authors said. "The drugs with higher sales tended to have stronger positions in foreign countries and more investigational indications under way in the U.S. at the date of [orphan] designation." The Tufts study, entitled "Implementation of the Orphan Drug Act: 1983-1991," was published in the Food and Drug Law Journal released in November. Although they did not specifically advocate a statutory change to the orphan drug program, the authors commented that it "may be that...orphan drug status has been too easily accessible." They added that any legislation should focus on methods to identify prospectively products "with a market potential beyond that intended by the Congress." Sens. Metzenbaum (D-Ohio) and Kassebaum's (R-Kan.) legislative proposal, which would allow FDA to consider applications for competitor products once an orphan drug's sales exceed $200 mil., is an example of what the authors consider a retrospective approach. Metzenbaum and Kassebaum are expected to introduce early next year a bill similar to the legislation (S 2060) they cosponsored in the last Congress. Kassebaum's ascendancy to ranking minority member of the Senate Labor & Human Resources Committee probably will help her bring the measure before the committee sooner than it would otherwise be considered. The Pharmaceutical Manufacturers Association, which consistently has opposed amendments to the Orphan Drug Act, has placed the issue on the agenda for its next board meeting, scheduled for Dec. 10. The researchers reviewed drugs and biologicals granted orphan status through April 30, 1991. They then specifically analyzed sales figures for the 41 approved orphan products with validated sales data against seven variables. They found that the only variables that correlated to sales with statistical significance were foreign studies and registrations and the number of additional indications under investigation. The other variables studied were prevalence of the orphan condition, whether drugs were marketed for the orphan indication prior to implementation of the Orphan Drug Act, size of the drug sponsor, whether FDA had approved the drug prior to orphan designation and length of treatment required (acute, intermittent, long-term). These factors had a positive correlation with sales but were not a statistically significant predictor of commercial potential. The authors indicated that the current statutory criterion for orphan status -- that orphan products have patient populations of less than 200,000 -- is inadequate. Using patient population "as the sole determinant of orphan drug status, if that status is intended to be consonant with the lack of commercial viability, is not completely reliable," the authors commented. "The prevalence of a specific orphan indication as submitted to the FDA by prospective orphan sponsors, appears to have little predictive value with respect to future sales potential of the drug." The researchers reported that through April 30, 1991, there were 440 orphan designations. The orphans comprised 254 different drugs and 188 different indications. Fifty-two orphan drugs had been approved as of that date. The authors noted that proposed regulations for the orphan drug program -- which were issued in January 1991 but never made final -- "would require that a request for orphan drug designation include a summary of the regulatory status and marketing history of the drug both in the U.S. and in foreign countries. The way in which the FDA would use this information is not explained." Of the 41 approved orphan drugs studied more closely, half were under investigation for another indication at the time of the orphan designation, and 10 drugs had at least three additional indications under study. Forty percent "were investigational or approved in from six to 17 countries at both their dates of designation and dates of FDA approval." While a product's foreign research activity and number of investigational indications may be a "marker" of potential commercial success, even this use of these two factors is not "foolproof," the authors cautioned. For example, Genzyme's Ceredase for Gaucher's Disease is among the top 10 selling orphan products but is "a drug which in all other respects would seem to be a classic orphan drug and an appropriate candidate for orphan status. There has, however, been concern expressed about the pricing of this product. Given the importance of the statutory incentives for drugs such as this, the question of pricing and sales may be more effectively addressed within another context separate from the orphan drug program," the authors commented. Shulman et al. suggest that "closer scrutiny of the proposed orphan indication may also be appropriate." Alluding to erythropoietin, the authors remarked that where the indication "covers a more common condition in association with a particular disease (e.g., anemia of end-stage renal disease), the potential use of the drug for the same condition in other patient populations should be explored (e.g., anemia due to AIDS or infant prematurity). In each of these examples," the authors noted, "anemia, not end-stage renal disease, AIDS, or prematurity, is a condition being targeted by the drug." Four of the top 10 selling orphan drugs "had indications that would fit this pattern," they said.

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