The number of patients enrolled in the trials used to support the registration of novel orphan product are significantly smaller that non-orphan products. One measure of this is the difference in the enrollment of trials cited in the FDA drug trials snapshots.
Since 2015, the average number of trials cited in the FDA trials snapshots for novel drugs were 439 for orphan products, and 2,736 for non-orphans.
Data from the Orphan Drug Tax Credit provides insights into the costs of drug development, or more specially, the costs of the clinical trials used to support an FDA approval.
From 2010 to 2016, the average qualifying trial costs claimed for the orphan drug credit was $86 million to $102 million, per FDA approved orphan indication (assuming 2 to 3 year average years of lag between the credit claimed and the approval date). Companies were able to take a credit of $43 to $51 million, on average, for each FDA approval.
The $86 to $102 million in pre-credit outlays is far lower than the average of $965 million on trial costs for a new drug approval, estimated by DiMasi and others in 2016. Some of the differences are explained by the smaller trials for orphan drugs and other differences in methodologies, although both figures include the costs of failed trials and exclude pre-clinical or cost of capital costs.
In 2013, the last year for which we have actual rather than projected data on the credit (from the IRS Statistics of Income), the total amount of the credit from all 132 corporate tax returns that claimed the credit was just over $1 billion, nearly the same amount as the DiMasi estimate of $965 million for a single drug. But in 2013, the FDA granted 265 orphan designations and approved 33 orphan indications, including 8 novel products which were approved for an orphan drug lead indication.
The data from the orphan drug tax credit illustrates the large gap between the known facts about the costs for R&D for orphan drug development, and the astronomically larger R&D costs claimed by DiMasi (and frequently quoted by other researchers, policy makers and journalists) as averages that should guide policy making.
These data underline the need for greater transparency of R&D costs, and more sophistication and realism by policy makers regarding the costs of research and development for drugs qualifying as orphan products.
The data from the orphan drug tax credit also provides additional perspective on the estimates of drug development costs provided by Vinay Prasad and Sham Mailankody in their 2017 JAMA paper.
This brief essay examines data from the U.S. Orphan Drug Act, including specifically the FDA designations of an indication for a drug to treat an orphan disease, and the likelihood that once the designation is made, the FDA will approve the drug for that indication. This is one empirical measure of the risks associated with the development of new drugs to treat U.S. defined orphan diseases. Note that 75 percent of all novel cancer drugs approved in the United States from 2010 to 2016 qualified as orphan products. The essay also reports the average time between the FDA designation and the FDA approval for orphan indications.
The main findings are that since 2010, the average time from orphan designation to approval is 5.3 years, and the likelihood of FDA approval for an orphan indication, which varies over time and across business cycles, was .22 from 1990 to 2017, and since 2010, was .25.
The essay concludes with a comparison to other studies of the risks of drug development.
On January 5, 1983, the U.S. Orphan Drug Act became law as Public Law 97-414. Over the past 34 years the Act has been amended numerous times, often extending or expanding the benefits, which currently include a 50 percent tax credit for qualifying clinical trials, exemptions or discounts on prescription drug user fees, an easier and faster path to FDA approval, and seven years of marketing exclusivity for an approved orphan indication.Continue reading →
The “right to try” (RTT) movement presents a narrative that pits patients against the FDA. Supporters of RTT, powered by the libertarian Goldwater Institute, have pushed for laws that let terminally ill patients bypass regulators to access unapproved treatments.
As of September 2017, 37 states have enacted RTT laws. Earlier this year, the Senate and the House introduced federal RTT bills, and on August 3, 2017, the Senate unanimously passed an amended RTT bill without an opportunity for debate. There is pressure on the House to follow suit, but it is unclear whether the House will consider the originally introduced RTT bill (“RTT 1.0”) or the Senate’s amended version (“RTT 2.0”), or even take up the legislation at all.
Despite the recent legislative backing, RTT is not a new concept. It is a variation on an age-old skepticism towards the FDA that has been around as long as the agency’s inception. At the core of RTT is the previously rejected, yet persistent argument that the FDA’s approval standards for safety and efficacy should not matter for terminally ill patients who have nothing to lose . Continue reading →
Yesterday, it was announced that Allergan had transferred the ownership of the patents on its billion-dollar drug Restasis, used for the treatment of chronic dry eye, to the Saint Regis Mohawk Tribe. The Tribe then exclusively licensed the drug back to Allergan, in exchange for tens of millions of dollars in both licensing and royalty fees. Although it may not sound like it, this transfer is potentially huge news in the drug pricing world. It is also extremely complex, and its full implications have yet to be determined.
Enormous caveat before we begin: I am by no means an expert on tribal sovereign immunity. I may well be wrong here. (In fact, I would very much like to be wrong here.) There is little (any?) case law on sovereign immunity’s impact in the Hatch-Waxman area, and much of what follows is extrapolated from case law on tribal sovereign immunity both in IP and in other contexts, state sovereign immunity in the IP area, and discussions with other law professors. Please let me know if this is your area of expertise and you believe I’ve gotten the analysis wrong!
In short, if repeated and taken to its logical conclusion, this transfer has the potential to prevent most invalidity challenges to drug patents. Would-be generic competitors could not seek to initiate inter partes review (IPR) actions before the Patent and Trademark Office (PTO). They could not bring declaratory judgment actions in federal court. And – both most importantly and most unclear – they could not bring Paragraph IV invalidity counterclaims under Hatch-Waxman, preventing generic companies from independently challenging patents’ invalidity and potentially requiring us all to wait until the very end of patent expiration to experience generic competition.
(1) The Importance of Genetic Ties: This use of CRISPR/Cas 9, as with most reproductive technologies, are attempts to allow those with disease-causing genes or other obstacles to reproduce genetically to do so. Investment and development of these technologies reifies the importance of genetic ties, as opposed to the kinds of ties associated with adoption, step-parenting, etc. It confuses a right to be a genetic parent, with a right to be a parent. We might have one right or both, but we should be clear they are different rights claims. Françoise Baylis has written eloquently about this issue in the context of In Vitro Gemetogenesis, and others (myself included) have mused on what claims the infertile have on society to have the state pay for these kinds of technologies instead of adopting. The National Academies report on gene editing suggested that clinical use of gene editing to eliminate disease be restricted to cases where there is an “absence of reasonable alternatives,” but does not take a position on when adoption is a reasonable alternative. Of course, in the U.S. at least, adoption is not easy and not available for everyone and there are a ton of interesting normative questions I have gestured at (including whether it matters for “reasonability” whether the child is of a certain age, race, or lacks developmental delay).
(2) The Importance of Embryo Sparing: A different alternative to gene editing in some cases is to fertilize large numbers of embryos and engage in preimplantation genetic diagnosis to eliminate those embryos that carry the disease-causing genes. There is a lot of obstacles to doing this: the fact that women may not retrieve enough eggs to do this, the cost (physical and financial) of repeated egg retrievals and PGD, the fact that this may not work for all genetic problems, etc. But one problem that vexes some is that this results in the destruction of large numbers of embryos (“discard” is sometimes used as the euphemism). Gene editing may be a solve for this problem. The Mitalipov group in their Nature paper have a line to this effect, “When only one parent carries a heterozygous mutation, 50% of the embryos should be mutation-free and available for transfer, while the remaining carrier embryos are discarded. Gene correction would rescue mutant embryos, increase the number of embryos available for transfer and ultimately improve pregnancy rate” (emphasis mine). This raises to me a very interesting question: some religious conservatives have tended to oppose both attempts to transform the human genome & embryo destruction (especially in the stem cell debate context). Could gene editing offer an olive branch to them as an alternative to the “greater evil” of routine PGD plus discard? Does it matter that to get to a place where we could achieve this we would have to actually destroy numerous embryos to perfect the research? (The Mitalipov embryos were not implanted, it seems under current U.S. law that they could not be/) Is the right way to think about this consequentialist — destroy some embryos today to develop embryo sparing technologies to save many more tomorrow — or is this a case of complicity where the wrongfulness of the basic research taints what comes later?
Each month, members of the Program On Regulation, Therapeutics, And Law (PORTAL) review the peer-reviewed medical literature to identify interesting empirical studies, policy analyses, and editorials on health law and policy issues relevant to current or potential future work in the Division.
Below are the abstracts/summaries for papers identified from the month of June. The selections feature topics ranging from physicians’ views of the Sunshine Act; to a biomarker-based drug development case study of CETP inhibitors, to the potential return on public investment in detecting adverse drug effects. A full posting of abstracts/summaries of these articles may be found on our website.
The Federal government has wrested billions of dollars from the drug and device industry in settlements of claims that the companies broke the law by promoting their products “off-label” for uses not approved by the FDA. In response, companies have asserted that promotions are a form of speech, protected by the First Amendment. Speech regulations are especially worrisome when motivated by paternalism. This argument has received some traction in the courts, and is now getting a favorable look by the Trump administration.
I have argued (here, here, and here) that this law is not actually a speech regulation. Nor is it paternalistic. Instead, it is simply a vanilla regulation of a behavior (shipment of product in interstate commerce), which depends on various sources of evidence (including speech) as revealing whether the actor has an illicit intent (an unapproved use of the product). The pre-market approval system, which requires that companies prove safety and efficacy for all intended uses, solves a collective action problem to produce information as a public good. This is our key social mechanism for producing knowledge about safety and efficacy. If this law is unconstitutional in the off-label context, the entire pre-market approval system would seem to be as well.
In a new piece out on SSRN, my physician co-author Victor Laurion develops the example of the drug Seroquel XR, to show how a federal prosecution for off-label promotion caused the company to perform scientific research on two new indications (general anxiety disorder and major depression). A detailed discussion of the regulatory record shows how physician prescribing was improved by this public information, regardless of whether the FDA approved the new indication. In this way, the FDA protects the liberty of physicians and patients to try drugs for new uses, even while holding companies to the proof of any uses that they actually intend. The fact that the company’s intention is shown by speech evidence is immaterial. Continue reading →
Earlier this month, the FDA announced that it is asking Endo Pharmaceuticals to remove the opioid Opana ER from the market. Opana ER is an extended-release pain reliever often abused by those who take it. While opioid abuse is nothing new, and many opioids leave those who take them addicted to narcotics or heroin, Opana ER is particularly dangerous because of how people misuse it. The pill was designed to prevent would-be abusers from crushing and snorting it — a popular means of ingesting prescription opioids. Without the ability to crush and snort the drug, however, abusers turned to dissolving the pills and injecting them intravenously, leading to outbreaks of Hepatitis C, HIV, and other blood-borne diseases. In Indiana’s Scott County, for instance, the prevalence of HIV has skyrocketed since the introduction of Opana ER to the local population, with 190 new cases since 2015.
While this foray into public health is somewhat surprising — given the anti-regulatory stance of the current administration and its billionaire backers — it is precisely the type of initiative the FDA should be taking. Public health is a central part of the FDA’s mission statement, which notes that the agency “is responsible for protecting the public health by ensuring the safety, efficacy, and security of human and veterinary drugs, biological products, and medical devices.” Traditionally, though, the FDA’s efforts to ensure safety and efficacy have been limited to the narrow context of individual patients taking medications as directed under physician supervision. As the FDA noted in its Opana ER press release, this is the first time it has requested that an opioid be taken off the market as a result of its susceptibility to abuse and the associated public health consequences.
Critics call the plan crazy, unethical, and sure to fail. The likelihood of success is very low and the risk of Spiridinov dying is high. Spiridonov says that as soon as animal studies confirm the possibility of survival, the risks will be worth taking. He has Werdnig-Hoffmann Disease, a genetic disorder that destroys muscle and nerve cells. He is confined to a wheelchair and has lived longer than expected. Body transplantation offers him the best chance at a life worth living. Continue reading →
Loyola University Chicago’s nationally acclaimed Beazley Institute for Health Law and Policy is pleased to invite original research submissions for its inaugural Wiet Life Science Law Scholars Conference on Friday, October 13, 2017.
The conference is designed to provide a new intellectual venue for life science professors, scholars, and practitioners to convene and discuss current research and scholarship. The phrase “life science law” aims to capture research and disciplines spanning food and drug law, health law, intellectual property (IP), biotechnology, environmental, administrative, antitrust, and other realms that involve the life sciences in some meaningful respect. Our goal is to foster recognition of life science law as a cohesive, dynamic, area of legal study and strengthen connections among national life science law scholars.
Loyola is currently soliciting 750-1,000 word abstracts reflecting early or mid-stage ideas for the purpose of workshopping with other conference scholars. Modeled after successful events for law professors and scholars in other areas, participants will be organized in topical panels of three to five authors with approximately 15-20 minutes allotted to each abstract presentation, followed by discussions with scholar attendees. Abstracts from the authors will be distributed one week prior to the conference; authors may also submit draft articles for distribution to conference attendees.
SUBMISSION AND REVIEW TIMELINE: The deadline for 750-1,000 word abstracts, including author contact information is June 15. Submit via email to firstname.lastname@example.org with subject line Wiet Life Science Law.
Authors will be notified of speaker selections by email on or before July 15.
The FDA’s policy guidelines on nutritional fortification include the so-called “jelly-bean rule:” the FDA considers it inappropriate to fortify candy or soda with nutrients because to do so would allow “misleading health claims” to be made about a putatively unhealthy product. Candy companies that tried to add vitamins their products to market them as “healthier” have already been targeted by the FDA. But take a quick glance at the shelves of any convenience store: the “healthy”, vitamin enriched snacks and drinks are so full of sugars, flavors and sweeteners that it would take a doctorate in metaphysics, rather than medicine, to distinguish them from the candy and soda. So, maybe the FDA’s stance on adding a spoonful of sugar to help the medicine go down has relaxed. With that in mind, here’s a little thought experiment. I’d like to bring a proposal back from the eighties: that inexpensive alcoholic beverages be fortified with allithiamine, a fat-soluble analogue of Vitamin B1. Why? The fortification could dramatically reduce the incidence of Wernicke’s encephalopathy and Korsakoff’s Syndrome among the homeless and alcoholic population.
On Thursday, April 6th, the FDA announced that it will allow the direct-to-consumer (DTC) genetic testing company 23andMe to market “Genetic Health Risk” (GHR) tests for 10 diseases or conditions including early-onset Alzheimer’s and Parkinson’s Diseases. This is in addition to 23andMe’s current offering of ancestry, wellness (e.g., lactose intolerance), trait (e.g., hair color), and autosomal recessive carrier screening (e.g., sickle cell anemia) test reports.
The decade since 23andMe entered the market has been a regulatory labyrinth of twists and turns. But what direction are we headed now?
I am happy to announce the publication of our new working paper on “Patenting Bioprinting Technologies in the US and Europe – The 5th element in the 3rd dimension.” The paper, which has been co-authored by Marc Mimler, starts out by describing the state of the art and by examining what sorts of bioprinting inventions are currently being patented. Based on our findings we then discuss what types of future innovations we can expect from the technological development and how far these would and/or should be protectable under European and US patent laws.
The paper is forthcoming in: RM Ballardini, M Norrgård & J Partanen (red), 3D printing, Intellectual Property and Innovation – Insights from Law and Technology. Wolters Kluwer, but the working paper is already available on SSRN. Continue reading →
Yesterday, a group of 20 Democrats in both the House and Senate introduced the Improving Access to Affordable Prescription Drugs Act, a 129-page bill designed to lower drug costs while increasing innovation and promoting transparency. The bill aims to accomplish a number of different goals, and in this post I’ll go through the different functions it serves and consider some notable provisions. For those who are interested, here’s a provision-by-provision summary. This is going to be a very long post, so I apologize in advance.
On the whole, I think there’s a lot to like in this bill, particularly in its promotion of innovation and in the way in which it seeks to curtail bad actors within the industry. However, I don’t agree with all of its provisions (as you’ll see) and I view some of its proposals as kludge-y solutions to kludge-y problems our complex system has created. I’m not yet sure whether I see that as a bad thing, to be clear – it works to create meaningful change within a system that was cobbled together over decades, mostly accidentally. But it isn’t the platonic ideal of a value-based pricing system, or anything similar.
With health care spending approaching 20 percent of Gross Domestic Product (GDP), controlling health care costs is a top priority not only for the federal government, but also the individual states. To develop successful strategies for cost control, states need comprehensive data on utilization of and spending on health care services. Medicare data are valuable but not representative of the entire national population or of the prices that private payers pay. In private insurance, prices are not under administrative control as they are in Medicare, and they vary widely in different geographic regions.
All-payer claims databases (APCDs) were developed, first in Maryland in 1995, to provide comprehensive state-level data on health-care utilization and spending, and there are now 16 APCDs nationwide. As the name implies, APCDs collect data from all payers, and the spending data reflect the actual negotiated prices of services. Thus, APCDs are a valuable source of information for state health policymakers and health services researchers. For example, in Massachusetts, the Health Policy Commission uses the state’s APCD to set state-wide health care spending targets, which have been important in achieving state cost control. […]
2017 is going to be terrific. Tremendous, even. Things are going to change, big league.
The new President has promised fantastic reforms to the drug industry. He’s going to get the big players in the pharmaceutical industry around a table and negotiate huge price reductions. Of course, he’s not going to touch their bottom line. If anything, he’s going to improve it. Innovation is being choked by over-regulation and he’s going remove burdensome FDA hurdles. But he has Executive Orders to give and walls to build, so he’s drafting in the very best people to help. We’re still waiting for those people to be officially named. Meanwhile, the media have had a month and a half of fun and speculation. The volume and variety of names being thrown around make it feel like a food fight at a Chinese buffet. One of those names is Peter Thiel.
Yesterday, the FDA approved a steroid, deflazacort, for the treatment of Duchenne Muscular Dystrophy (DMD). DMD is a rare, heartbreaking, and ultimately fatal genetic disease with few if any real treatments, and the steroid may be helpful to patients. Deflazacort’s sponsor, Marathon, has offered the drug at a list price of $89,000 per year. High, but actually much lower than the typical prices charged for new orphan drugs, which can easily run to $300,000 or more per year.
Here’s the big problem: deflazacort isn’t really a new drug. As the Wall Street Journal and Endpoints have pointed out, the drug is approved in many other countries, and its list price is about $1,000-$1,600 in Canada and the UK. Patients have been importing the drug and accessing it since the 1990s. Now, patients will pay many times those prices for the same product they had already been purchasing.
But the drug had not previously been approved in the United States, and surely Marathon conducted new clinical trials to demonstrate the drug’s benefit? Not clearly. Marathon mostly relied on clinical trial data from the 1990s that had not been fully analyzed. In return, Marathon gets 1) a seven-year market exclusivity period for the drug (as required by the Orphan Drug Act) and 2) a valuable priority review voucher (as required by law for rare pediatric diseases).
This is not acceptable. Full stop. It is the worst sort of gaming that other companies have engaged in over the years. And at a time when the drug industry is under fire for its high prices, PhRMA cannot afford to have its members (of which Marathon is one) acting this way. If PhRMA and patient groups funded by pharmaceutical companies are serious about drug pricing, here are three things they should do/encourage right now:
Many of today’s important medications are biological products made from living organisms, manufactured through biotechnology, derived from natural sources, or produced synthetically. Biosimilars are a type of biological product approved by FDA on the basis of being highly similar to an already approved biological reference product, like a generic drug.
This panel of experts will discuss the current state of biosimilars in the healthcare ecosystem and what comes next from a technical and legal perspective. Topics include how the next generation of biosimilars can improve patient access to standard-of-care therapies, the concept of “biobetters,” economic and intellectual property considerations, and policy approaches to support existing and future biosimilars.
Today, President Trump signed an executive order (EO) whose purpose is ostensibly to reduce the regulatory burden imposed by the government on many different types of industries. The EO envisions achieving this goal through an incredibly sophisticated strategy: “for every one new regulation issued, at least two prior regulations be identified for elimination.” Not how burdensome any particular regulation is, or how old it is, or how broad it is – just how many regulations there are.
The next question, of course, is what the EO means by “regulation.” It clearly includes traditional APA notice-and-comment rulemaking (the EO specifically calls out situations when an agency “publicly proposes for notice and comment” a regulation). More generally, the EO does provide a definition: “For purposes of this order the term “regulation” or “rule” means an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or to describe the procedure or practice requirements of an agency.”
This sounds to me as if it includes guidance documents, which are used extensively by many agencies to set and implement policy. To be sure, it is not always clear what counts as a guidance document, and it is not always clear whether agencies are attempting to use guidance to circumvent the notice-and-comment rulemaking process. But by many common definitions of guidance documents (including those put forth in executive orders by the Bush Administration, for instance), the term “regulation” as defined in this EO would seem to include guidance documents. As with other EOs issued in the past week, this one could have benefited from more clarity, but I think the better reading of the EO is that it does cover guidance.
There are many reasons why this strategy in general is a bad one, but I’ll focus on just one: the need to develop policy as a result of particular statutes. Take the 21st Century Cures Act. Whatever your view of its merits, it passed with overwhelming bipartisan support in the last weeks of President Obama’s administration. It also imposes enormous new obligations on HHS and the FDA to make all kinds of policy judgments going forward. It rarely requires the creation of a traditional notice-and-comment rulemaking (see sections 4002 and 4003 for examples), but often speaks in terms of “establish[ing] a program” or “establish[ing] a draft framework,” much of which could be done through guidance.