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March 27, 2017

Amid orphan drug controversy, GAO to launch investigation

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    The Government Accountability Office (GAO) has announced plans to investigate potential abuses of the orphan drug program.


    The Orphan Drug Act, signed into law in 1983, created incentives for drugmakers to develop drugs for rare, or "orphan," diseases. Under the program, a drugmaker receives seven years of exclusive rights to the marketplace for a treatment for an orphan disease, meaning FDA will not approve another version of the drug during that seven-year period, even if the company's patent expires. The intention is that the exclusivity period compensates the drugmaker for producing a medication expected to serve only a small population. Drugmakers can return to FDA to seek a new seven-year exclusivity period on the drug by having it approved to treat another disease.

    Details of investigation

    However, Kaiser Health News has reported that exclusivity allows drugmakers to set orphan drug prices as high as they want, without pricing pressure from a competitor. KHN in an investigation released earlier this year found that since the orphan drug program began in the 1980s, about one-third of approvals under the program have been for mass market drugs repurposed to treat orphan diseases or products that have received several orphan approvals. Further, KHN found that the share of new drugs approved as orphans has grown considerably, with orphans accounting for 47 percent of new medicines in 2015 and 40 percent in 2016, compared with 29 percent in 2010.

    Senator launches investigation into FDA's orphan drug program

    GAO says it will investigate program

    Earlier this month, Republican Sens. Tom Cotton (Ark.), Chuck Grassley (Iowa), and Orrin Hatch (Utah) asked GAO to investigate whether pharmaceutical companies have abused the orphan drug program.

    Grassley's office on Tuesday said GAO has confirmed that it will launch an investigation, which likely will begin in about nine months.

    According to KHN, GAO is still determining the investigation's scope and the methodology it will use. GAO does not update the public on work in progress, but releases its findings once investigations are complete, KHN reports (Tribble, Kaiser Health News, 3/21).

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