Investigation finds pharmaceutical companies profit from “orphan” drug rules

Some drug companies reaped unanticipated profits from a law intended to make sure medications are available to treat rare diseases, Kaiser Health News reports.

The Orphan Drug Act, which President Reagan signed in 1983, offers financial incentives and market protections for drug companies that sell medications for patients who might otherwise have been ignored. But a six-month investigation by Kaiser Health News found pharmaceutical companies manipulated the rules to maximize profits and protect their competitive monopolies.

More than 200 companies have brought nearly 450 so-called “orphan drugs” to market since the law took effect, Kaiser Health News reports. More than 70 drugs were first approved by the federal Food and Drug Administration for mass market use, then later approved to treat orphan diseases, granting manufacturers millions of dollars in government incentives.

When a drugmaker gains FDA approval for a medicine to treat an orphan disease, the company also gains seven years of exclusive rights to the marketplace. That means drugmakers are shielded from competition and can, if they choose, charge what they want.

Many orphan drugs are well-known and widely used for other purposes. Seven of the top 10 best-selling drugs in the United States in 2015 were also designated as orphan drugs. They include Humira and Enbrel, both used to treat rheumatoid arthritis.

After reviewing the investigation’s findings, Dr. Gayatri Rao, director of the FDA’s Office of Orphan Products Development, told Kaiser Health News she is interested in studying how often drug companies are “repurposing” a drug for a rare disease.

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