The Orphan Drug Act provides two mechanisms by which a drug can receive an orphan drug designation for a “rare” disease: (1) if it affects less than 200,000 persons in the United States, or (2) if it “affects more than 200,000 in the United States and for which there is no reasonable expectation that the cost . . . will be recovered from sales in the United States of such drug.” See 21 U.S.C. § 360bb(a)(2). H.R. 4712 (the “Fairness in Orphan Drug Exclusivity Act”), which passed the House on November 17, seeks to amend the latter “cost recovery” pathway in order to address what has been called a “loophole” in the Act.
“Orphan” drug exclusivity, which is intended to reward drug companies’ investment in the development of certain drugs, might soon be harder to get—and keep.
Over the past several months, Congress introduced two similar bills to amend a “loophole” in the Orphan Drug Act (ODA). On October 17, 2019, a bipartisan group of House members introduced H.R. 4712 (“Fairness in Orphan Drug Exclusivity Act”) (“the House bill”). On February 11, 2020, bipartisan Senators sponsored a companion bill bearing the same title (S. 3271) (“the Senate bill”). Consistent with recent political interest in curbing high drug prices, the proposed legislation is intended to limit the availability of orphan drug exclusivity for certain drugs, with the goal of thereby promoting competition.