Monday, March 28, 1994
WASHINGTON - The new orphan drug compromise takes a subtle
approach to limiting prices on new orphan drugs, and will force some companies
to make trade offs between short-term revenue and longer-term market exclusivity
under the law.
The compromise amendment to the Orphan Drug Act of 1983, announced
on Friday, was reached in triangular negotiations between the Biotechnology
Industry Organization, members of Congress and patient advocacy groups. The
industry won in its efforts to exclude current orphan drugs and drugs in the
clinic from the bill's coverage, and succeeded in eliminating any strict revenue
limit on orphan products.
But while the deal does not contain outright revenue caps feared
by the industry, its provisions clearly would bounce "blockbuster" products
out of the orphan fold after four years, and force some companies to decide
whether to sacrifice their orphan monopoly in order to maximize the pricing
of their drugs.
Attempts to revoke
The Orphan Drug Act was enacted to promote the development and marketing of drugs, biologicals and other products to prevent or treat rare diseases. The emergence of blockbuster drugs with orphan status resulted in several failed attempts by Congress to amend the act.