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The Benefits Of Orphan Drug Designation

According to the National Institutes of Health (NIH), there are over 7,000 diseases classified as rare, affecting an estimated 25-30 million Americans. These diseases range from genetic disorders to infections, cancers, or auto-immune diseases. These diseases can be chronic, progressive, and in the worst cases, fatal. Thanks to legislation passed by the U.S. Congress in the 1980s, the Orphan Drug Act aims to provide incentives to drug companies to develop new drugs and treatments targeting these rare diseases.

The path for the United States Food and Drug Administration approval for new drugs and treatments is already a complex and time-consuming process. However, gaining an orphan drug designation can be advantageous for several reasons. If you are in the process of developing a drug that you believe could receive the benefits of the Orphan Drug Designation, call the Law Office of Philip P. Crowley, LLC at 908-663-8253. We are experienced and passionate attorneys who provide full-service representation to emerging tech and life sciences companies.

What is the Orphan Drug Act?

The Orphan Drug Act was passed by the U.S. Congress in 1984 and signed into law by President Ronald Reagan. It was created to incentivize drug companies and provide resources for the research and development of new drugs and treatments for diseases that, while overall rare, still affected millions of Americans. Diseases like ALS  (amyotrophic lateral sclerosis, generally known as Lou Gehrig’s Disease), Huntington’s Disease, Tourette’s Syndrome, and muscular dystrophy were just some of the diseases highlighted early in the program.

Part of the reason for this act was to combat a problem that the FDA drug approval process creates as an unintended consequence. Because the FDA typically requires stringent testing in thousands of human volunteers to prove both the effectiveness and safety of drugs, drug companies tended to focus on issues that affected a larger number of patients to recoup their development costs through high volume sales. Additionally, designation of a disease being classified as rare, suggests that finding a sufficient number of people to participate in clinical trials could be difficult if not impossible.

The crafting of the Orphan Drug Act commenced in the early 1980s. The National Organization for Rare Disorders (NORD), founded by Abbey Meyers, was a coalition of rare disease sufferers and their families and was instrumental in lobbying on behalf of victims of rare diseases. Representative Henry Waxman of California and Senator Orrin Hatch of Utah collaborated on the bill. According to the FDA, fewer than 10 products were developed for rare diseases by the drug industry from 1973 to 1983. Since then, over 400 products have been approved and benefited from the Orphan Drug Designation. Since the development of America’s Orphan Drug Program, both Japan and the European Union have followed suit with similar types of programs.

What Criteria is Required for the Orphan Drug Designation?

The Orphan Drug Act was crafted to focus on the treatment of rare diseases and is the main requirement when seeking the Orphan Drug Designation. A rare disease, for the purpose of this act, means it either (1) affects less than 200,000 persons in the United States or (2) affects over 200,000 persons in the United States, but there is no reasonable expectation that the costs associated with developing the drug or treatment could be recovered via their sales within 7 years following FDA approval.

Understanding the Orphan Drug Designation Application?

An application is required when seeking the Orphan Drug Designation. The entire application will run approximately 20-30 pages, and will primarily focus on:

  • Administrative information;
  • An explanation of the disease or condition the drug is intended to treat;
  • Furnish sufficient scientific rationale; and
  • Provide an estimate of the affected population to support status as a rare disease.

Administration Information

The administration information is a basic overview of the drug or treatment and its sponsor. It includes contact information, the descriptive name of the product, the disease or condition that is being targeted, and the manufacturer of the drug.

Disease or Condition Explanation and Population Estimate

A detailed explanation of the disease or condition that is wished to be treated must be specified. The Orphan Drug Designation is typically granted for a broad disease and not a specific symptom or indication. This includes the population estimate for the number of persons affected.

The factors for defining the disease or condition will need to include:

  • Mechanism of Action (MOA) of a drug;
  • Etiology;
  • Prognosis;
  • Pathophysiology; and
  • Treatment options.

Sufficient Scientific Rationale

An outline of the rationale of the drug development must be provided in the application. This means providing a strong medically plausible basis for why the drug or treatment should be effective in treating a disease or condition. These conclusions should be backed by the clinical data of studies and case reports when possible. A full description of the drug and its MOA should also be explained.

Additional Information

An application for the Orphan Drug Designation includes additional information that may or may not apply to the specific drug in the application. This includes a “Same Drug” statement, where if a drug is chemically the same or similar to another existing drug but can be shown to be clinically superior. An “Orphan Subset”, is when the drug may be appropriate for a subset of persons affected by a non-rare disease (these are less commonly granted.) Finally, any current regulatory status related to the drug being studied.

If you are currently in the process of completing an application for the Orphan Drug Designation, contact us today, we can guide you through the process and ensure that your application has the best chances of getting granted Orphan Drug status.

What are the Benefits of the Orphan Drug Designation?

The whole purpose of the Orphan Drug Act was to incentivize the pharmaceutical industry to broaden its product offerings to include drugs that can help people with rare diseases. Because of this, there are many benefits to being granted the Orphan Drug Designation.

  • Up to a 50% tax credit for clinical trials that qualify
  • Waiver of Prescription Drug User Fee Amendments (PDUFA) application fees, including the new drug application and biologics license application (NDA/BLA) application fees ($2.8 million in 2021)
  • Eligibility for Federal research grants
  • Granted 7-year market exclusivity

The 7-year Orphan Exclusivity is distinct from other granted exclusivities and often seen as the main benefit of the Orphan Drug Description. This is determined by the FDA’s Office of Orphan Products Development (OOPD) upon market approval. The OOPD will send a letter to recognize this exclusive approval. This means the FDA may not approve the same drug for the same drug indication (with a few exceptions.)

How to Start an Application for the Orphan Drug Designation?

The Law Office of Philip P. Crowley, LLC is a full-service law firm for tech and life science companies. We can help you navigate the complex process for FDA drug approval, including seeking the Orphan Drug Description and the benefits it provides. contact us for a consultation on how we can best assist you in the application process and ensure you have the greatest legal advantage moving forward.



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