When Everyone Is an Orphan: Against Adopting a U.S.-Styled Orphan Drug Policy in Canada

Abstract

Putting aside whether diseases that affect only small numbers of people (“rare diseases”) should be prioritized over diseases that are otherwise orphaned, in this article I argue that a new approach to rare, orphan diseases is needed. The current model, first signaled by the United States' Orphan Drug Act and subsequently emulated by several other jurisdictions, relies on a set of open-ended criteria and market-based incentives in order to define and encourage drug therapies for rare, orphan diseases. Given a) the biopharmaceutical industries' growing interest in orphan diseases, b) progress in the sphere of personalized medicines enabling more and more common diseases to be reclassified as rare, and c) empirical evidence suggesting that the most orphan drugs target only a limited, lucrative subset of rare diseases, I argue that Canada, which recently announced plans to develop its own “orphan drug framework” should not follow the United States' orphan drug model.

Keywords:

• health innovation policy
• orphan drug
• pharmaceutical industry
• rare disease

ACKNOWLEDGMENT

This paper benefited from comments from several scholars and researchers, including Françoise Baylis, Conrad Fernandez, Michael Taylor, and the members of the Novel Tech Ethics group at Dalhousie University. I am also indebted to the members of the Genome Canada-funded “IGNITE” project led by Christopher McMaster and Conrad Fernandez for cultivating my interest in policy issues surrounding rare diseases. As well, Health Canada's input and in-kind involvement in IGNITE significantly informed my research and analysis. Finally, I would like to thank two reviewers for their comments and suggestions, which strengthened the final version of this paper considerably.

Notes

1. Defending this assumption is beyond the scope of this article.

2. I focus on the laws and policies of the United States, Japan, Australia, and the European Union because those instruments are, unlike the laws and policies of other jurisdictions, readily available in English or summarized in detail in the literature.

3. This figure was “arbitrarily determined by the observation that companies were unwilling to manufacture drugs for narcolepsy or multiple sclerosis, each believed to affect approximately 200,000 persons” (Arno et al., 1995, p. 234). We now know that the number of persons in the U.S. with narcolepsy and multiple sclerosis is far lower and higher, respectively, than this 200,000 figure, yet it remains unchanged.

4. Note that only the European Union seems to require that the disease or condition be one that affects people within the jurisdiction; according to the wording of the legislation in the United States and Australia it is open to manufacturers to develop a product for peoples elsewhere provided sales in the United States or Australia would not cover the research and development costs.

5. This form of market protection will be explained in depth below and differentiated from patent rights as well as other types of exclusivity available to orphan drugs.

6. Commentators argue that the use of placebos in randomized clinical trials is unethical when there is an existing treatment for a condition. However, regulators in Canada and elsewhere have failed to make this a binding requirement, moreover, research ethics guidelines do not capture all clinical trials and may be poorly enforced (Flood and Dyke, 2012). In contrast, many rare diseases lack any treatment options at present. Arguably, this problem of inappropriate use of placebo control groups does not apply. However, as explained in Section II below, the possibility of transforming common conditions into rare ones is increasing. This may in effect define away concerns about inappropriate use of placebos in clinical trials by making it appear that no treatments currently exist for a given rare disease when, in fact, one or more treatments may be available to a wider group of patients, to which members of this newly created type of rare disease previously belonged.

7. There are other criteria incorporated into the orphan drug laws of Japan, Australia, and the European Union, but none sets these jurisdictions meaningfully apart from the U.S. model. Perhaps the only exception to this is Japan's stipulation that the therapeutic product tendered as an orphan drug has a “high possibility of [successful] development” (Thamer et al., 1998; Narukawa, 2001).

8. Although this incentive measure is often described as a feature of a given country's orphan drug law (e.g., Panju and Bell, 2010), it is typically available to any drug (orphan or not) that targets a life-threatening or serious disease (Milne and Tait, 2009). Indeed, Canada already allows for priority review of applications on this basis (Lexchin, 2012).

9. The precise details of each form of market protection vary by jurisdiction and are the subject of ongoing dispute. For example, the period of “data exclusivity” afforded to “innovative drugs” under Canada's Food and Drug Regulations (1985) is currently eight years (or 8.5 years for drugs suitable for pediatric populations). In the United States, the law was recently amended to provide 12 years of data exclusivity (FDA, 2012). The timeframe in Europe is the same as the United States, but the European regulator's decision to create a streamlined pathway for “biosimilars” (also referred to as “follow-on” on “subsequent entry” biologic products) has raised questions about the scope of data exclusivity protection (Carey, 2011). A thorough account of these intricacies is, however, beyond the scope of this paper.

10. In some jurisdictions, including the United States and certain European countries manufacturers can apply for some “patent term restoration” if the regulatory process has been unduly slow (Drug Price Competition and Patent Term Restoration Act, 1984; European Patent Convention, 1973).

11. In Canada, eight years of data exclusivity is available to “innovative drugs” (Food and Drug Regulations, 1985). In the context of trade negotiations with the European Union, Canada is currently contemplating further extending the term of data exclusivity (Beltrame, 2012).

12. Note, however, that the report did not assess whether the drugs were approved for the same indication as in the United States.

13. Eighteen (18) of these 43 products were approved solely as orphan products (Wellman-Labadie and Zhou, 2010, p. 221).

14. The European Union may constitute an exception to this insofar as the targeted disease must be “life-threatening or chronically debilitating” (under the population standard) or “life-threatening, seriously debilitating or serious and chronic” (under the commercial viability test) to qualify as an orphan drug.

15. For example, the company Amgen sought and received an orphan designation for a drug, epotein alpha (Epogen®), to treat anemia with end-stage renal disease. Following its approval, physicians began prescribing the drug off-label for anemia generally, not just anemia caused by renal failure, and the drug's sales quickly reached blockbuster levels.

16. Interestingly, one study found that there has not been an increase, as measured by publication activity, in rare disease related research more generally (Heemstra et al., 2009).

17. Note, it is not possible to say whether there was a disproportionate focus on oncology in terms of the number of orphan drug designations that were sought by manufacturers—as opposed to the number granted by the FDA—because those data are not publicly available.

18. Note amendments to the Orphan Drug Act in 1988 preclude manufacturers from seeking an orphan designation if they have already applied for market authorization. If, however, they have already received a market authorization for a non-orphan product, they may apply for an orphan designation (Wellman-Labadie and Zhou, 2010, p. 226).

19. Potentially life-saving or markedly improved products can be granted accelerated regulatory reviews, but these would appear to be likewise available to oncology orphan products.

20. Putting aside the influence of the FDA's orphan drug grant program and other research funding available to researchers and manufacturers engaged in the orphan disease space.

21. Arguably, this screening occurs at the reimbursement stage and companies are aware of which products are more or less likely to be attractive to payers and make upstream resource allocation decisions accordingly. However, a great deal of evidence suggests that manufacturers, in response to market incentives, expend the majority of their resources developing and marketing “me too” products and, despite the absence of significant therapeutic gains, payers in Canada and elsewhere often elect to reimburse these products (Grootendorst et al., 2011; Light and Lexchin, 2012). There is thus a need to incorporate stronger assessments of value and impact as part of upfront innovation design (Lehoux et al., 2008).

22. It should be noted, though, that manufacturers are subject to increasing legal requirements to register and share their clinical trial findings. These requirements are far from perfect (Vera-Badillo et al., 2013; Viergever and Ghersi, 2011; Law et al., 2011; Sekeres et al., 2008), but would presumably apply to firms participating in Valverde et al. (2012)'s grant-and-access pathway.

23. Another study found that orphan drugs were less likely to be associated with a post-market safety concern. However, orphan drugs approved on an expedited timeframe were found to have a higher incidence of safety issues identified by a regulator (Heemstra et al., 2010). Although not specific to orphan drugs, a recent study of approved products by Health Canada over a fifteen-year period, found a marked increased in safety warnings for fast-tracked drugs (Lexchin, 2012).

24. Currently, Health Canada has limited powers to require and carry out post-market surveillance of prescription pharmaceuticals. Efforts to remedy this have been proposed for some time but little has changed in terms of post-market surveillance since a bill to amend Canada's Food and Drug Act died on the order paper in 2008.

25. There is debate about whether more personalized medicines more generally will increase health care costs. Tailored treatments already on the market such as trastuzumab (Herceptin®) tend to command exceptionally high prices. But the ability to discriminate responders and non-responders to a therapy potentially offers significant cost-savings, assuming the clinical validity of the discriminating test (Deverka et al., 2010; Davis et al., 2009; Stallings et al., 2006). Based on the data that currently exists it is not possible to say that orphan drugs are cost-effective, however (Kesselheim, 2011, p. 469).