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ORPHAN DRUG BRAFT BILL WOULD REDUCE MARKER EXCLUSIVITY

Executive Summary

ORPHAN DRUG BRAFT BILL WOULD REDUCE MARKER EXCLUSIVITY under the Orphan Drug Act to four years but allow for a three-year extension for products whose "net cumulative sales" do not exceed $200 mil. during the first four years of marketing. The draft by Sens. Metzenbaum (D-Ohio) and Kassebaum (R-Kan.) defines "net cumulative sales" as total U.S. sales "minus discounts, allowances and returns." Market exclusivity currently lasts seven years under the orphan law. The Metzenbaum-Kassebaum draft would allow competing brands of an approved orphan product to be approved during the first product's exclusivity period if the initial and subsequent brands were "developed simultaneously." Products are simultaneously developed, the draft explains, "only if" the sponsors of subsequent brands request orphan designation within six months after designation of the initial product, begin clinical trials within 12 months after trials began on the initial product, and submit an NDA within 12 months after the initial orphan product NDA was submitted. The draft also would end an exclusivity period of an orphan product if the patient population for the product grows beyond the 200,000-patient threshold. The draft further stipulates that the threshold for orphan drug designation is based not only on a measurement at the date of designation, as provided under current law, but also on projections of the size of the population three years after designation. The Biotechnology Industry Organization is expected to issue a formal position on the draft after its Dec. 15 board meeting. A proposal developed and floated by BIO last spring would have amended the act by limiting exclusivity to five years and allowing for two-year extensions. A more striking difference in the industry proposal is its lack of a sales-based threshold. The BIO proposal would have allowed the extension only for products for patient populations of less than 100,000 ("The Pink Sheet" June 21, T&G-7). In addition, the industry proposal sought to eliminate the reliance of biotechnology products on the Orphan Drug Act for market exclusivity. The proposal would have provided four-year exclusivity periods for biotech products. The Metzenbaum-Kassebaum draft contains no such provision. Metzenbaum and Kassebaum had planned to introduce their bill before Congress recessed but instead withheld introduction until after they receive industry's reaction. Their decision suggests that the drafting process remains open and that they will consider requests for changes. The senators reportedly considered including their proposal as a provision of the health care reform bill but now plan to move it as free-standing legislation.

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