February 27, 2023

Battle Over ‘Orphan Drugs’ Leads to Higher Drug Prices

An “orphan drug” is a designation that rewards drug corporations for developing treatments for rare diseases. When a drugmaker wins approval for an orphan drug, the company is entitled to seven years of exclusive rights to the marketplace, which means the Food and Drug Administration (FDA) won’t approve another company’s application for a competitive drug for the same use during that period.

For example, Zolgensma, a one-time treatment for spinal muscular atrophy, carries a $2.25 million price tag, so nearly all U.S. patients taking the drug as approved by the FDA are covered by commercial or government insurance.

However, an ongoing legal and political debate about the FDA’s handling of orphan drugs has led to skyrocketing prices for some of these drugs. Much of the disagreement centers on the scope of the exclusivity. For instance, Catalyst Pharmaceuticals filed suit against the federal government following a 2019 decision allowing another company, Jacobus Pharmaceutical, the right to market a competitive product for a subset of pediatric patients.

Catalyst contended that it had rights to be the exclusive provider for all patients with Lambert-Eaton myasthenic syndrome (LEMS), regardless of age. LEMS is a very rare condition that affects the signals sent from the nerves to the muscles. It means the muscles are unable to contract properly, resulting in muscle weakness and a range of other symptoms.

“The Orphan Drug Act is the law at the center of the debate,” said Joseph Peters, Jr., Secretary-Treasurer of the Alliance. “Much of the disagreement is over whether a drug is truly new or is a slight variation of something that was introduced previously. Congress must act so that uncertainty does not lead to confusion — and additional astronomical drug prices.”