COVID-19: Time to reexamine the Orphan Drug Act and find an alternative

The COVID-19 pandemic has shown the resiliency of the U.S. health care system — particularly the innovative public and private efforts to develop new treatments and vaccines and the strength of the drug supply chain to ensure access to essential medications. 

Publicly and privately funded researchers around the world have been working on vaccines and treatments for COVID-19 at speeds that would have seemed unthinkable before this crisis. The FDA has found ways to fast track these drugs for eventual approval.  However, the pandemic has also highlighted some of the system’s flaws — like the Orphan Drug Act (ODA). 

Last month it was revealed that Gilead sought orphan drug designation under the ODA for its promising drug Remdesivir, which could be a treatment for those suffering from COVID-19. The ODA was enacted in 1983 with the intention to increase the development and deployment of drugs which treat rare diseases that impact small numbers of the population, those under 200,000 total patients in the United States. The intent was to incentivize the development of treatments that would otherwise lack commercial viability due to a lack of patients. It seems unusual that such a designation would be sought for a disease that is currently approaching 800,000 cases.

After a public outcry, Gilead submitted a request to the FDA to rescind this designation. Gilead’s stated rationale for requesting the designation was that it would waive a requirement to conduct a pediatric study plan that could take up to 210 days to review. But that’s not all that ODA designation does. Orphan drugs receive other incentives including seven years of regulatory exclusivity, meaning they have an effective monopoly on profits from the treatment regardless of patents and certain tax credits. With these incentives, pharmaceutical companies would in theory be more likely to develop cures for patients populations so small that they otherwise would have no reasonable expectation that the cost of developing will be recovered.

Regardless of whether Gilead sought an ODA designation to speed up development or for financial reasons, this event shows that the ODA is not functioning as intended. The ODA was enacted for a noble cause: to help those suffering from rare diseases get the treatments they need. But even before the pandemic, experts were warning that the ODA was being used for activities well outside the intention of Congress. Kaiser Health News found that in 2015 47 percent of all new drugs were considered orphan drugs. In that same time period, seven of the top 10 drugs by annual revenue had orphan drug designation.

Ultimately, the ODA needs to be revisited to make sure that its use is consistent with Congress’ original intentions.

Gilead’s request for ODA designation illustrates this point. Given the rapid growth and threat of COVID-19 here in the United States and across the world, special orphan status should not have been granted to this drug in the first place. But the reported cases were under 200,000 at the time of the request and the law has no clear mechanism for rescinding designation in the event of a known pandemic with rapidly increasing patient counts. This means that Gilead, absent its request, could have lawfully taken advantage of this designation.

Ultimately, this incident with Gilead highlights that while there will always be a critical need for continued innovation and public-private partnerships to develop unique and specialized medicines, there is also a need for good governance to ensure laws are functioning as intended. 

There are two clear takeaways. First, Congress must reexamine the Orphan Drug Act to ensure that it is not being abused for unintended purposes. Second, Congress must make sure that our drug system is capable of responding to the special needs of a pandemic. While Gilead’s decision to rescind its application for orphan drug status was appropriate, they never should have had to apply for it in order to quickly and promptly bring a treatment to market during a pandemic. Fortunately, the FDA was able to expedite review of Remdesivir on its own authority, but clear pathways may be necessary to respond to such a crisis in the future.

We desperately need a “break in case of emergency” option for quickly and promptly approving treatments during a crisis that encourages and rewards innovation but ensures that corporations cannot claim more than their fair share. 

Matthew Lane is the executive director of the Coalition Against Patent Abuse.