Senator says drugmakers may be misusing FDA orphan drug rules—and costing taxpayers money

Sen. Chuck Grassley is looking into whether “unanticipated uses” of the Orphan Drug Act have had a hand in the United States’ high drug prices.

Have drugmakers misused a decades-old law designed to spur research into rare, neglected diseases? Sen. Chuck Grassley says he aims to find out. The frequent pharma critic says he's investigating whether “unanticipated uses” of the Orphan Drug Act have helped boost U.S. drug prices.

Last month, Kaiser Health News published a report showing that pharma companies are legally using the Orphan Drug Act to win years of additional brand exclusivity for mass market meds. Drugmakers reapply for approvals in rare diseases, and, if successful, those green lights come with seven years of exclusive access to markets, along with other financial incentives.

Blockbuster drugs such as AstraZeneca's cholesterol med Crestor, Otsuka's antipsychotic Abilify, and Roche's cancer treatment Herceptin each won seven years of exclusivity plus millions in government incentives for their makers after gaining new approvals in diseases with small patient populations. Initially, the FDA approved those drugs in more prevalent diseases.

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AbbVie’s rheumatoid arthritis med Humira, the world’s best-selling drug, also made the list, KHN pointed out. On the flip side, Allergan’s Botox initially treated muscle spasms of the eye, an orphan designation, and grew into a massive brand as it won wider uses. Roche's Rituxan, now broadly used in arthritis and cancer, was first developed as an orphan drug.

Grassley, citing “strong consumer concern” about drug pricing, said he and his staff are launching an inquiry into the law and potential abuses. “I’m interested in learning whether the unanticipated uses of the provisions are contributing to high prices for commonly used drugs,” Grassley said in a statement.

It’s far from the first time the senator from Iowa has taken an interest in pharma affairs. Late last year, he asked Mylan CEO Heather Bresch to attend a Senate hearing about EpiPen pricing and was miffed when she declined, choosing to attend an industry conference instead. Before that, he kept the pressure on Mylan throughout that company’s controversy and pushed for faster FDA approval for generic competition.

Grassley also co-wrote the Physican Payments Sunshine Act, which requires drugmakers to disclose gifts, meals and dollar payments to doctors and other healthcare providers. That law passed in 2010.

Congress approved the Orphan Drug Act more than 30 years ago, KHN said, to spur drug development in disease areas where drugmakers weren’t active due to financial uncertainties. Since then, about a third of orphan drug approvals have been for repurposed drugs or those with multiple orphan approvals, the report concluded. It's important to note that, with an orphan drug approval, a med's seven years of exclusivity is limited to the rare disease indication.

Industry has made a move toward rare diseases in recent years, with orphan drugs making up 40% of new meds last year. That was up from 29% in 2010.