How is the FDA Advancing the Orphan Drug Act?

Over three decades ago, the United States Congress passed the Orphan Drug Act in 1983. The Act focused on drug development for rare diseases, defined as affecting fewer than 200,000 people. Before Congress enacted this legislation, companies had very little incentive to invest money in the development of these drugs, writes Dr Nicola Davies in her monthly FDA Blog for The Pharma Letter.

As a result, patients were left with either limited options or no options at all. Any treatment option offered was usually expensive because of the significant cost of development for a small population.

Therefore, Congress provided some incentives. First, companies were provided a 50% tax credit toward the cost of research and human clinical trials. Generous research grants were given, and relief from prescription drug fees was provided. More importantly, companies were provided marketing exclusivity for seven years, which greatly limits competition because other companies cannot market the same drug.