Inducements to Pharmaceutical Companies To Produce "Orphan Drugs"
The term "Orphan Drugs" refers to medicinal products that are produced for the diagnosis, prevention or treatment of life-threatening or very serious, but rare, diseases. In the United States, an Orphan disease is one that affects less than 200,000 persons in the country. These drugs are termed "orphans" because the pharmaceutical industry has little interest in developing and marketing products intended for only a small number of patients suffering from very rare conditions. Orphan Drugs research and development is not cost effective.
For pharmaceutical companies, the cost of bringing a rare-disease medicinal product to the market would not be recovered by the product sales. Nevertheless, orphan diseases can be some of the most serious and devastating conditions that affect Mankind, including multiple myeloma, and cystic fibrosis. Many orphan diseases target children and reduce their lifespan dramatically. For this reason, governments and organizations representing rare disease patients have emphasised the need for economic and regulatory incentives to encourage drug companies to develop and market medicines for the many neglected and "orphaned" rare disease patients.
The Orphan Drug Act (ODA) was passed in the United States in 1983. It sets up the criteria for orphan disease designation and describes the incentives that are offered to pharmaceutical companies that undertake to develop new Orphan Drugs and to continue to manufacture existing ones. Companies that work on Orphan Drugs are given substantial tax incentives by the government that offset some of the research and development costs. After the drug is produced, the company is granted a monopoly, or the exclusive right to sell the drug for seven years after it is approved and placed on the market. This means no other company can produce or sell it for that period of time. Therefore the pharmaceutical company has a 7-year time period to sell the drug and recover the production costs. In certain cases, pharmaceutical companies have petitioned for and been granted an extension for this period of exclusivity.
Since passage of the ODA the government and pharmaceutical companies have cooperated to produce nearly 300 orphan drug products that target many rare but serious diseases and conditions that would have otherwise gone untreated.
There are many health care and public health activists who advocate expanding the ODA to include drugs that treat diseases that are absent in the United States but prevalent in developing countries. In this case, a different definition would apply since these diseases are anything but rare; they affect millions of African, Asian and South American people. However the same marketing prohibitions apply since sales regarding drugs to treat these diseases would never generate enough money to become cost effective. Many feel that the United States and pharmaceutical companies have a moral obligation to produce and deliver treatment for these afflictions.
by Sally.Anderson 19 years ago