Subject: Orphan Drug Act Isn't Broken -- Don't Fix It
Date: Published: 10/18/90 (101 lines)
Source: Wall Street Journal. Copyright Dow Jones & Co. Inc.

    Orphan Drug Act Isn't Broken -- Don't Fix It
    ----
    By James M. Foster

    The Orphan Drug Act probably is responsible for extending
 my life.  Certainly it has extended the lives of many
 Americans.  Without the incentives of the 1983 act,
 aerosolized pentamidine, which prevents an often deadly
 pneumonia associated with AIDS, would not have been
 developed.  I know, because I worked with the company that
 developed the drug and made a "bet-the-company" gamble to
 invest tens of millions of dollars to fund the clinical
 trials to show that it works.
    Now some in Congress want to make sure that that kind of
 Orphan Drug Act success is never repeated, at least with
 respect to AIDS.  In fact, that change is close to becoming
 law.  Once a few technicalities are ironed out, the bill goes
 to the president for his signature.
    Congress originally passed the Orphan Drug Act to foster
 the development of drugs to treat diseases affecting patient
 populations too small to make the drugs profitable in the
 open marketplace.  Through tax credits and, in particular,
 market exclusivity, Congress sought to help drug makers
 achieve profits on otherwise unprofitable drugs, providing
 them with incentives to conduct research and development on
 drugs for rare diseases.
    However, now that drug companies have proceeded to develop
 and make profits on orphan drugs, Rep. Henry Waxman (D.,
 Calif.)  and Sen. Howard Metzenbaum (D., Ohio) have sponsored
 changes in the law that will remove many of these incentives
 and destroy the law's effectiveness.  These "reforms" passed
 the House and Senate.
    Two of the amendments are aimed directly at AIDS drugs and
 are especially destructive.  One will remove, retroactively,
 Orphan Drug Act protection for a drug if its "theoretical
 patient population exceeds 200,000."  Another denies
 protection should the population be forecast to rise above
 200,000 three years after designation.
    The retroactive provision sends an alarming signal to drug
 companies:  Congress will not stand by its word, at least
 where politically controversial AIDS drugs are concerned.  The
 provision relating to future patient populations is equally
 troublesome, because it is aimed at the heart of AIDS drug
 research and development.
    For those of us with AIDS, the shortcomings of these
 amendments spell the difference between life and death.  It is
 madness to create disincentives in the fight against AIDS and
 a frightening assortment of deadly AIDS-related conditions --
 especially as the 10-year-old battle seems to be making some
 small, but real, progress.
    Rep. Waxman, Sen. Metzenbaum and other critics of the law
 cannot deny that it has worked well.  More than 350 drugs have
 qualified for Orphan Drug designation and 41 have been
 approved by the Food and Drug Administration.  The
 market-exclusivity incentive has worked so well that it has
 been copied by Sens. Joseph Biden (D., Del.) and Edward
 Kennedy (D., Mass.) in their efforts to encourage R&D on
 drugs designed to fight chemical dependencies.
    This is a much larger group than those with AIDS, with a
 potential patient population estimated at more than six
 million, but still the market-exclusivity incentives were
 considered appropriate.  It simply can't be that the lives of
 those with AIDS are worth less than those with addictions.
    Unquestionably, R&D will continue on patented AIDS drugs,
 even if the "reformers" have their way.  But if the act is
 amended to allow retroactive removal of orphan drug status,
 no drug company will risk investing tens of millions of
 dollars to develop an unpatented orphan drug (for any
 disease); the reward could be snatched away anytime during
 the two to three years it takes to get the drug approved and
 during the seven-year market-exclusivity period.
    The Orphan Drug Act has achieved precisely what its
 authors and supporters intended.  By making orphan drugs
 potentially profitable, Congress has ensured that new
 life-saving and life-enhancing drugs are now available.  Some
 of these drugs are not cheap, but the problem of drug pricing
 is not unique to orphan drugs.  If Congress wants to deal with
 concerns about drug prices, it can do so across-the-board.
 Gutting the Orphan Drug Act, and thus directing research away
 from orphan drugs, is not the answer to that problem.
    If Congress removes orphan drug incentives, we will lose
 valuable and important drugs designed to fight not just AIDS
 but other conditions that are equally devastating to victims
 and their families.  For some of us, the very real benefits of
 the Orphan Drug Act may be too late.  But we all want a
 chance.  The president can give us a fighting chance by
 vetoing the bill.
    ---
    Mr. Foster, a commissioner of the San Francisco Department
 of Public Health, has served as a consultant to several
 pharmaceutical companies to encourage the development of
 AIDS-related drugs.

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