What Is the Purpose of the Orphan Drug Act?

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Health Law and Policy, The Orphan Drug Act (ODA)


The Orphan Drug Act (ODA), first enacted in the United States in 1983, was set up to encourage the development of drugs for rare diseases. At that time, drug therapies for such diseases were rarely developed. Three decades later, a growing proportion of industry research and development (R&D) and regulatory drug approvals target diseases affecting fewer than 200,000 persons in the United States, the prevalence-based threshold of rare disease under the ODA.

In a new article published in PLOS Medicine , Aaron Kesselheim and colleagues document an embedded trend: within the increasing number of drug approvals targeting rare diseases, there is a substantial minority of biomarker-defined subsets of more common diseases, especially cancers. Commentators have long worried about this phenomenon of "salami slicing" common diseases for the purposes of drug approval because of the market advantages that orphan drug status confers. Due to lower R&D costs (e.g., relatively small clinical trials or observational studies), expedited regulatory reviews, and minimal competition even after patent and ODA market protection expire, rare-disease-targeting orphan drugs are now amongst the most expensive and profitable drugs on the market in the world.