Executive Summary

ORPHAN DRUG DESIGNATION PROCESS WILL BE REVIEWED BY HHS INSPECTOR GENERAL, the OIG reports in its recently-issued "Work- plan for Fiscal Years 1993 and 1994: Public Health Service Projects." In addition to examining generally how FDA has implemented the Orphan Drug Act, the OIG will "assess the FDA's controls over the designation of orphan drugs." Although the report does not indicate specifically that the IG's office will look at the potential profitability of orphan drugs, it does point out that the statutes give drug makers various incentives to develop orphan drugs, "the most important of which is the right to exclusively market the drug for several years following FDA approval of the drug for its designated use." A recently-published study by Tuft University's Center for Drug Development that looked at incentives for orphan drug development suggests that orphan drug designations may have become too accessible and that any statutory change to the orphan drug program should focus on methods to prospectively identify drugs with a bigger market potential than that intended by Congress in the Orphan Drug Act ("The Pink Sheet" Dec. 7, p. 11). Other planned studies include a general review of the "effectiveness" of FDA's management information systems and a separate review to "determine whether the FDA implemented [the] recommendations made in the OIG report entitled 'FDA's Generic Drug Management Information System Approval Process.'" Early this year, the Office of Generic Drugs was taken off the White House Office of Management and Budget's "high risk" list due to progress in implementing the IG office's recommended management information system reforms. However, the generic drugs office was still considered to have "material weaknesses" and was subject to certain OMB reporting requirements ("The Pink Sheet" March 23, p. 6). The OIG also plans to examine FDA's efforts to recruit and retain qualified personnel. "Numerous agency observers, including the Edwards Commission and the Office of Management and Budget, have raised concerns about FDA's ability to compete for, recruit, and retain highly skilled personnel," the OIG report comments. "Predicted shortages of qualified scientists and the 'graying' of FDA's workforce add to the urgency with which the agency must recruit and train a significant number of skilled employees." Elsewhere in the PHS, the Inspector General's Office advises that it will review "initiatives adopted by [the National Institutes of Health] to ensure [that] the inclusion of women and minorities in research proposals represents an integral part of the research design" and will analyze how well NIH disseminates findings from its consensus development conferences. Regarding the latter, the report remarks that while NIH "has held several focus groups with local physicians during the past few years to discuss dissemination of information, there has never been a national study to evaluate whether the information is reaching the right medical professionals and whether it is reaching them in a timely manner." The report also notes the IG's current study of NIH/industry collaborative research and development agreements for drug development, a review requested by Sen. Pryor's (D-Ark.) Senate Aging Committee. The OIG already is conducting interviews for this study ("The Pink Sheet" Dec. 7, p. 6).