Federal Register. / Vol. 57, No. 250 / Tuesday, December 29, 1992 / Rules. and Regulations 62089

(9) A statement as to whether the
sponsor submitting the request is the
real party in interest of the development
and the intended or actual production
and sales of the product.

(c) Any of the information previously
provided by the sponsor to FDA under
Subpart B of this part may be referenced
by specific page or location if it
duplicates information required
elsewhere in this section.

§316.21 Verification of orphan-drug
status.

(a) So that FDA can determine
whether a drug qualifies for orphan-
drug designation under section 526(a) of
the act, the sponsor shall include.in its
request to FDA for orphan-drug
designation under § 316.20 either:

(2) Documentation as described in
paragraph (b) of this section that the’
number of people affected by the
disease or condition for which the drug
product is indicated is fewer than
200,000 persons; or

(2) Documentation as described in
paragraph (c) of this section that
demonstrates that there is no reasonable
expectation that the sales of the drug
will be sufficient to offset the costs of
developing the drug for the U.S. market
and the costs of making the drug
available in the United States.

(b) For the purpose of documenting
that the number of people affected by
the disease or condition for which the
drug product is indicated is less than
200,000 persons, “prevalence” is
defined as the number of persons in the
United States who have been diagnosed
as having the disease or condition at the
time of the submission of the request for
orphan-drug designation. To document
the number of persons in the United
States who have the disease or
condition for which the drug is to be
indicated, the sponsor shall submit to
FDA evidence showing:

(1) The estimated prevalence of the
disease or condition for which the drug
is being developed, together with a list
of the sources (including dates of
information provided and literature
citations) for the estimate;

- (2) Upon request by FDA, the
estimated prevalence of any other
disease or condition for which the drug
has already been approved or for which
the drug is currently being developed,
together with an explanation of the
bases of these estimates; and

(3) The estimated number of people to
whom the drug will be administered
annually if the drug is a vaccine or is
a drug intended for diagnosis or
prevention of a rare disease or
condition, together with an explanation
of the bases of these estimates

‘(including dates of information
provided and literature citations).

(c) When submitting documentation
that there is no reasonable expectation
that costs of research and development
of the drug for the disease or condition
can be recovered by sales of the drug in
the United States, the sponsor shal]
submit to FDA:

{1) Date on all costs that the sponsor
has incurred in the course of developing
the drug for the U.S. market. These costs
shall include, but are not limited to,
nonclinical laboratory studies, clinical
studies, dosage form development,
record and report maintenance,
meetings with FDA, determination of
patentability, Preparation of designation
request, IND/marketing application
preparation, distribution of the drug
under a “treatment” protocol, licensing
costs, liability insurance, and overhead
and depreciation. Furthermore, the
sponsor shall demonstrate the
reasonableness of the cost data. For
example, if the sponsor has incurred
costs for clinical investigations, the
sponsor shall provide information on

ie number of investigations, the years
in which they took place, and on the
scope, duration, and number of patients
that were involved in each

investigation.

(2) If the drug was developed wholly
or in part outside the United States, in
addition to the dotumentation listed in
paragraph (c)(1) of this section:

(i) Data on and justification for all
costs that the sponsor has incurred
outside of the United States in the
course of developing the drug for the
U.S. market. The justification, in
addition to demonstrating the
reasonebleness of the cost data, must
also explain the method that was used
to determine which portion of the
foreign development costs should be

" applied to the U.S, market, and what

percent these costs are of total
worldwide development costs. Any data
submitted to foreign government
authorities to support drug pricing
determinations must be included with
this information.

(ii) Data that show which foreign
development costs were recovered
through cost recovery procedures that
are allowed during drug development in
some foreign countries. For example, if”
the sponsor charged patients for the
drug during clinical investigations, the
revenues collected by the sponsor must
be reported to FDA.

(3) In cases where the drug has
already been approved for marketing for,
any indication or in cases where the
drug is currently under investigation for
one or more other indications (in
addition to the indication for which

HeinOnline -- 57 Fed. Reg. 62089 1992

orphan-drug designation is being
sought), a clear explanation of and
justification for the method that is used
to apportion the development costs
among the various indications.

(4) A statement of and justification for
any development costs that the sponsor
expects to incur after the submission of
the designation request. In cases where
the extent of these future development
costs are not clear, the spunsor should
request FDA's advice and assistance in
estimating the scope of nonclinical
laboratory studies and clinical
investigations and other data that are
needed to support marketing approval.
Based on these recommendations, a cost
estimate should be Prepared.

(5) A statement of and justification for
production and marketing costs that the
sponsor has incurred in the past and
expects to incur during the first 7 years
that the drug is marketed.

(6) An estimate of and justification for
the expected revenues from sales of the
drug in the United States during its first
7 years of marketing. The justification
spou'd eames thet the total market for

ie is equal to the prevalence of
the disease or condition that the drug
will be used to treat. The justification
should include:

(i) An estimate of the expected market
share of the drug in each of the first 7

- years that it is marketed, together with
. an explanation of the basis for that

estimate;

(ii) A projection of and justification
for the price at which the drug will be
sold; and
iii} Comparisons with sales of
similarly situated drugs, where
available.

(7) The name of each where
the drug has already been approved for
marketing for any indication, the dates
of approval, the indication for which the
drug is approved, and the annual sales
and number of prescriptions in each
country since the first approval date.

(8) A report of an independent
certified public accountant in
accordance with Statement on «
Standards for Attestation established by
the American Institute of Certified
Public Accountants on agreed upon
procedures performed with respect to
the data estimates and justifications
submitted pursuant to this section. Cost
data shall'be determined in accordance
with generally accepted accounting
principles.

{d) x sponsor that is requesting
orphan-drug designation for a drug
designed to treat a disease or condition
that affects 200,000 or more persons
shall, at FDA’s request, allow FDA or
FDA-designated personnel to examine at
reasonable times and in a reasoneble



62080 Federal Register / Vol. 57, No. 250 / Tuesday, December 29, 1992 / Rules and Regulations

of sometimes relying on physical

structure, sometimes relying on

functional effect, sometimes refusing to

consider functional effect, and making

presumptions about whether particular

physical structures are likely to have a
ctional effect * * *.”

In developing the NPRM, FDA
considered deeming drugs to be
different if the agency would normally
require a full NDA or PLA with inal
supporting data before approving the
subsequent drug. However, such a rule

would make it too easy to break
exclusive marketing by making small
modifications in molecular structure or
in the drug's indications, changes that
would usually trigger a requirement for
a full NDA. Indeed, for many complex
macromolecular products, there is no
degree of similarty that would lead to
approval of an application without a full
NDA or PLA. This would mean that
most macromolecules would be
ineligible for exclusive marketing rights,
an outcome that, for reasons described

“above, does not seem compatible with
the purpose of the Orphan Drug Act.

34. One comment requested that FDA.
make available the report of the Institute
of Medicine, National Academy of
Sciences (IOM) concerning issues
discussed in section ILE. of the NPRM,
i.e., reasonable criteria for identifying
drugs as different for purposes of
determining orphan-drug exclusive
marketing rights.

The report of this workshop, held on
November 19, 1990, is available from
National Academy Press (Report of a
Workshop, “Microheterogeneity of
Biological Macromolecules,” Forum on
Drug Development, 1991. Division of
Health Science Policy, Institute of
Medicine, National Academy Press,
2101 Constitution Ave. NW.,
‘Washington, DC 20418).

As was mentioned in the preamble to
the proposed rule (56 FR 3338 at 3343),
FDA's choice of the third criterion
(NPRM, section ILE. (56 FR 3338 at 3341
through 3342)) in the NPRM and in this
final rule is consistent with the
discussions at the IOM’s “Workshop on.
Microheterogeneity of Biological
Macromolecules.”

C. Written Recommendations for
Investigations of Orphan Drugs

35. One comment expressed a view
that information on the current
regulatory and marketing status and
history of the drug product thet the
sponsor is required to submit under
Proposed § 316-1000)(7) should be
specific only to the sponsor's ti
and tmarketa i activites. aman

In order to provide useful
recommendations on the studies

necessary to support marketing approval
of a drug, FDA needs whatever
information is known or accessible to
the sponsor concerning approved
indications, recalls, adverse experience,
other uses, abuse potential, etc., on the
drug. This would ide both the
sponsor's latory and marketing
activities and those of others about
which the sponsor knows or could _
reasonably find out about.

36. Two comments requested that
FDA inform sponsors, as soon as

ossible, when the agency no longer

lieves that its (previously given]
recommendations are adequate to obtain
marketing approval and give the reason
for its change of opinion along with the
scientific rationale,

FDA does not have the resources to
monitor all factors affecting continued
validity of all guidance previously
piven. Therefore, FDA must place the

yurden on the sponsor periodically to
seek confirmation thatthe -
recommendations it received from FDA
still apply. This is not difficult if the
sponsor is in frequent touch with FDA's
review divisions and if the sponsor
diligently reviews literature on relevant
subjects, FDA will undertake to respond
to specific inquiries by 8 sponsor
concerning any change of FDA's
position or previous advice.

37. Another comment suggested that
FDA should, on request, provide
recommendations concerning how to
prove clinical superiority of a drug in
order to show that it is “different”
within the meaning of proposed § 316.3.

FDA advises that, if asked such a
question, FDA will ordinarily
recommend head-to-head clinical trails
between the drugs, as this will normally
be what is necessary to demonstrate
clinical superiority to FDA's
satisfaction. In addition, FDA may
suggest endpoints for such studies.

38. Another comment requested that
FDA develop a mechanism to notify
sponsors early in the development
process whether their drugs are the
same as one being developed by another
sponsor and whether either drug is
considered a macromolecular drug or a
micromolecular drug,

FDA advises that information on the
existence of investigational products

enerally is confidential and may not be

isclosed. In addition, FDA would:
normally not be able to determine
whether drugs are the same or different
until all data for marketing applications
for both drugs are submitted, Hence,
FDA declines to provide the requested
early information and advice.

39. Another comment expressed
concern that small firms are
‘disadvantaged compared to multi-

HeinOnline -- 57 Fed. Reg. 62080 1992

national corporations with respect to
their ability to learn about parallel
of another firm on the same
drug. To investigate this possible bias
against small firms, the comment
proposed a full-scale economic
assessment of this rule.
FDA does not that small firms
are at a unique information
disadvantage when developing orphan
drugs, Imperfect knowledge about
compoetitors’ research is an expected risk
factor in any research program, and,
while small firms are inherently less
able to tolerate excessive financial risk-
taking, imperfect knowledge about
competitor research is probably a less
important risk factor for orphan drug
than for other pharmaceuticals. Orphan
product development has been
extensively publicized, both in the trade
press and in sponsors’ and investigators’
efforts to locate test subjects, so that
subsequent researchers in product areas
where high research costs are likely
almost always to have considerable
information about competitors’ efforts.
Even if small firms had such a
disadvantage, FDA cannot make
confidential commercial information
available. Therefore, FDA believes that
a full-scale economic assessment of this
aspect of the rule would be pointless,
40. Several comments suggested that
FDA adopt time limits for response to
wests for written recommendations as
well as responses to requests on all
matters associated with administration

of the Orphan Act.

Due to resource limitations, FDA :
cannot now impose time limits on itself
for response to applications and
requests pursuant to the Orphan Drug
Act. However, the agency will respond
to requests as itiously as its
resources will allow,

41, One comment asked that the rule

- include the address for submitting

requests for FDA action under this rule.
A agrees and has added the address

of the Office of Orphan Products

Development to the final rule in new

§ 316.4.

D. Designation of Orphan Drugs Based

on Prevalence

42, Another comment recommended
the removal of the requirement that a
drug be designated as an orphan drug in
order for the sponsor to be entitled to
apply for orphan-product grants. The
comment expressed a need for grants to
support clinical studies on orphan
devices and medical foods.

FDA advises that the Orphan Drug
Amendments of 1988 (Pub. L. 100-290)
provided that medical foods and
medical devices for rare disease or
conditions are eligible for grants and


Federal Register / Vol. 57, No. 250 / Tuesday, December 29, 1992 / Rules and Regulations 62085

FDA disagrees with the premise that

analyses under Executive Order 12291

@ appropriate means for evaluating
the relative usefulness of methods for
determining sameness/differences. FDA
has consulted with the IOM in
developing the adopted approach and
will evaluate and propose revisions to
the approach if necessary in the .
interests and needs of people with rare
diseases and conditions.

79. One comment stated that FDA
should be required to prepare an
economic impact statement under the
Regulatory Flexibility Act on grounds
that the proposed rule adversely affects
a significant number of small entities.

A disagrees because the overall
impact of the Orphan Drug Act benefits
small businesses, many of which would
otherwise be unable to bear the
substantial cost of new product
development. Moreover, the economic
effects of the proposed rule, and the
final rule, are simply those
contemplated by Congress in its
enactment of the Orphan Drug Act. (See
the discussion below in section III.)

III. Economic Impact

The agency has examined the
economic impact of the final rule in
accordance with Executive Order 12291
and the Regulatory Flexibility Act (Pub.
L. 96-354) and concludes that this is not
8 major rule as defined by Executive
Order 12291 and will not havea
significant impact on a substantial
number of small entities.

It is clear that the Orphan Drug Act,
as implemented by existing
administrative practices, has
significantly increased the rate at which
new orphan drugs are marketed. While
two or three drugs that might be eligible
as orphan drugs were approved
annually prior to the Orphan Drug Act,
an average of eight designated orphan
drugs have been approved per year and
marketed since 1984. Moreover, orphan-
drug designation has been granted to an
average of 41 drugs per year since 1984.
Thus, the Orphan Drug Act, as
implemented since 1983, has provided
an effective stimulus for the
development and marketing of drugs for
diseases or conditions that are rare in
the United States. In debating the need
for orphan drug exclusive marketing,
Congress weighed the potential dangers
of granting orphan drug exclusive
marketing, which would limit
competition, against the benefits to be
gained by encouraging sponsorsto —-
develop drugs of marginal commercial
value. In passing the law, Congress
determined that the benefits exceeded
the dangers. Any form of exclusive
marketing may have negative

consequences, such as noncompetitive
ricing. To date, however, there has

en insufficient experience with the
implementation of the statute to judge
whether an optimal benefit-cost balance
has been attained. It is clear,
nonetheless, that these incentives have
been highly successful in contributing
to the development and approval of
orphan drugs thet would not otherwise
have been developed. Thus, in FDA’s
view, the essential benefit-cost
considerations of Executive Order 12291
have been satisfied in favor of the rule
as here published, .

The agency also recognizes that
changes in the statutory incentive
structure would theoretically produce
corresponding changes in the level of
benefits, i.e., the number of orphan
drugs developed. FDA, however,
concludes that further incremental
analysis of the statutory provisions
would be highly conjectural and beyond
the availability of meaningful data from
experience to date.

19 Regulatory Flexibility Act
requires that the agency consider the
impact of the regulation on small
entities. FDA believes that these rules
benefit, rather than disadvantage, most
affected small businesses. Prior to
enactment of the Orphan Drug Act, few
small businesses could afford to devote
resources to the discovery of new
treatments for rate diseases, because the

smal! market for such products severely -

limited the profitability of this research.
Subsequent to enactment, the combined
stimulus of research grants, tax credits,
and exclusive marketing influenced
many small firms to develpp new
products for formerly inaccessible
markets. FDA finds therefore that, in
general, the incentives provided under-
the act will serve to enhance the
viability and competitiveness of small
entities.

IV. Environmental Impact

The agency has determined under 21
CFR 25.24(a)(8) that this action is of a
type that does not individually or
cumulatively have a significant effect on
the human environment. Therefore,
neither an environmental assessment
nor an environmental impact statement
is required.

V. Paperwork Reduction Act of 1980

This final rule contains information
collections which are subject to review
by the Office of Management and
Budget (OMB) under the Paperwork
Reduction Act of 1980. The information
collections will not be effective until
OMB approval is obtained. The title,
description, and identification of those
who will respond to the information

HeinOnline -- $7 Fed. Reg. 62085 1992

collection requirements are shown
below with an estimate of the annual
reporting and recordkeeping burden.
Included in the estimate is. the time for
reviewing instructions, searching
existing data sources, gathering and
maintaining the data needed, and
completing and reviewing the collection
EE ng
itle: lations.

Description: "These finel regulations
specify the procedures for sponsors of
orphan drugs to use in availing
themselves of the incentive provided for
in the Orphan Drug Act and set forth the
procedures FDA would use in
administering it.

Description of Respondents:
Businesses or other for-profit
organizations.

ESTIMATED ANNUAL REPORTING AND
RRECORDKEEPING BURDEN

Average
‘Anqual ete
Socton [umber of], Annual | ours | furan
respond: frequency) per re- | hours
‘sponse
316.2 and
316.10... 1 125] 375
316.20 1.76] 125] 20,025
316.22 1
316.27 1
316.90 1
316.96 3
Total .
List of Subjects in 21 CFR Past 316
Administrative practice and
procedures, drugs, Orphan drugs,
Reporting and recordkeeping
requirement.

Therefore, under the Federal Food,
Drug, and Cosmetic Act, and under
authority delegated to the Commissioner
of Food and Drugs, 21 CFR part 316 is
added as follows:

PART 316—ORPHAN DRUGS

Subpart A—General Provisions

Soc.

316.1 Scope of this part.
316.2 Purpose.

316.3 Definitions.

316.4 Address for submissions.

Subpart 8B—Written Recommendations for

Investigations of Orphan Drugs

316.10 Content and format of a request for
written recommendations,

316.12 Providing written recommendations.

316.14 Refusal to provide written
recommendations.

Subpart C—Deslgnation of an Orphan Drug

316.20 Content and format of a request for
orphan-drug designation.

316.21 Verification of orphan-drug status.

316,22 Permanent-resident agent for foreign
sponsor.


62082 Federal Register / Vol. 57, No. 250 / Tuesday, December 29, 1992 / Rules and Regulations

55. Another comment stated that,
because data on the side effects of
cancer or its treatment are limited or
nonexistent, sponsors requesting,
designation of drugs for patients
refractory to primary cancer therapies or
other cancer subgroups should be able
to rely on references to published
incidence data, mortality tables, and
oxpert medical testimony.

A advises that, where data are
limited, sponsors should provide the
best data available. Where published
incidence data, mortality tables, and
expert medical testimony are all that is
available, this will normally be
sufficient.

The comment further recommended
that the final rule provide guidance
including references to methods for
deriving estimated prevalence data by
using published incidence data.

A declines to provide such
guidance as part of this published final
tule but will provide data on methods
of extrapolation when asked about this

by potential sponsors regarding specific
diseases.

56. One comment argued that FDA
should provide for denial of designation
if it is obvious that the drug will be used
for nonorphan diseases or conditions
with prevalence in excess of 200,000.

FDA will deny an orphan-drug
designation application if it finds that
the proposed orphan indication is a
counterfeit, i.e., an ortificial subset of
the total population of potential users of
the drug. However, the agency will
continue to grant orphan drug
designations for drugs that are being
investigated for or are already approved
for common diseases and conditions
when there is also a rare disease for
which the drug may be useful and is
being studied, if the drug meets the
orphan-drug criteria. The incentives of
the Orphan Drug Act are needed to
encourage testing and development of
drugs for rare diseases or conditions
even when a drug in question is being
tested or approved for a more common
indication. Otherwise, sponsors may be
deterred by the lack of potential profit
from testing drugs for rare diseases.

57. One comment suggested that
§ 316.26, which deals with amendments
to orphan-drug designation, be
broadened to allow such amendments
when there are changes in medical
technology or where diagnostic
capabilities for a disease are improved.

JA agrees that such changes are
warranted, but only when the advances
concerned are unanticipated. FDA has
amended the final rule to this effect.

58, Several comments suggested that
orphan-drug designation and exclusive
marketing should be revoked when FDA

determines that a drug that it has
designated is later proved to have
commercial potential or when the
prevalence of the indicated rare disease
or condition later exceeds 200,000
People in the United States.

FDA advises that legislation that
would have authorized FDA to take
such actions was vetoed by the
President in 1990.

59. One comment argued that FDA
had not sufficiently considered when
and on what terms it will suspend (as
distinguished from revoke) an orphan
drug designation under § 316.29. The
comment inquired as to when and
under what terms FDA would restore a
suspended designation.

After considering this comment, the
agency concludes that it should not
suspend an orphan drug designation on
the grounds stated in § 316.29 but
should only revoke it. The possibility of
suspension raises troublesome questions
about bases for and conditions of
reinstatement of designation and the
rights of subsequent sponsors. Hence,
FDA has decided that, when the
conditions set forth in § 316.29 occur
(untrue statement of material fact, or
omission of material information, or
ineligibility of the drug at the time of
designation), the appropriate remedy is
permanent revocation of designation
and suspension or withdrawal of
exclusive marketing rights, with no
eligibility for reinstatement of such
rights. FDA has amended § 316.29 to
reflect this conclusion.

E. Designation of Orphan Drugs Based
on Nonrecovery of Cost

60. One comment concerning § 316.21
suggested a different approach for
verifying data estimates and their
justifications. The comment suggested
that the sponsor be required to obtain an
independent certified public accountant
(CPA) report on certain agreed-upon
procedures with respect to data,
estimates and justification provided.
Next, FDA, the sponsor, and the CPA
would agree on procedures tailored to
address matters of specific interest to
the agency. Then, the independent CPA
would report on the results of applying
these procedures in a summary of
findings—negative, assurance, or both.
Lastly, the level of assurance provided
in the independent CPA’s report on how
the agreed upon procedures would be
applied would depend on the nature
and scope of the procedures.

The comment suggested the following
specific change in the text of
§316.21(c)(8):

(8) the sponsor shall submit a report of an
independent Certified Public Accountant in
accordance with Statement on Standards for

HeinOnline -- 57 Fed. Reg. 62082 1992

Attestation established by the American
Institute of Certified Public Accountants on.
agreed upon procedures performed with
respect to the data, estimates, and
justifications submitted pursuant to this
section. Cost data shall be determined in
accordance with generally accepted
accounting principles.

FDA agrees that the suggested change
is appropriate and has added the quoted
passage to the final rule.

61. A comment stated that FDA has
seriously underestimated the impact on
multi-national corporations of .
demonstrating a lack of profitability in
light of the fact that multi-national
corporations will find it very difficult to
collect information on the costs of
orphan drug development and to
separate those costs from costs of other
research and development activities.
According to the comment, the
requirement of collection and separation
will discourage use of orphan-drug
incentives by multi-national

. corporations.

FDA believes that, although multi-
national corporations may face
problems that others do not, the
potential benefits of orphan drug
exclusive marketing would seem to
outweigh the burden of separating costs
between profitable ventures and orphan
drug research and development projects.

62, Another comment correctly noted
a typographical error in § 316.24(a): A
reference to § 316.26, should have been
a reference to § 316.25,

The error is being corrected in the
final rule,

63. A comment suggested that orphan-
drug designation should be denied for
drugs that are likely to have commercial
and competitive viability, even in small
populations. The comment expressed
concern that the exclusive marketing
provisions of the act will limit the
competition that has existed among
manufacturers of blood clotting factor in
the past. Alleging that this competition
has kept prices down.

Existing provisions of the act do not

rovide a “commercial viability” basis

for denial of requests for orphan drug
designation when such drugs are for
populations of 200,000 or less. Indeed,
upon enacting an amendment to the
Orphan Drug Act in 1984, Congress
expressed its determination to accept
the possibility that a designated orphan
drug might be commercially viable with
or without orphan drug exclusive
marketing. (See 130 Congressional
Record, S.14254 Floor Debates, October
11, 1984).

F. FDA Procedures

64. On its own initiative, FDA has
added new § 316.30, requiring sponsors


Federal Register / Vol. 57, No. 250 / Tuesday, December 29, 1992 / Rules and Regulations 62081
— =

contracts to support clinical studies of

safety and effectiveness. The preamble

to the NPRM was in error to the extent
that it implied the contrary. FDA solicits
grant applications for clinical studies on
medical devices and medical foods as
well as on drugs and biologicals
intended for rare diseases or conditions.

43. One comment ested that there
should be a process for designating.
medical foods and medical devices for
rare diseases or conditions in light of
the fact that the act now recognizes
these and provides for grants and
contracts to support clinical studies on
these products.

FDA does not agree that a process for
designating medical foods and medical
devices for rare diseases or conditions is
necessary. Although eligible for grants
and contracts, sponsors of orphan
medical devices and medical foods are
not eligible for exclusive marketing
rights, Hence, the main purpose for
designation does not exist so far as these
products are concerned. Further, with
respect to grants and contracts, FDA's
experience to date shows that a
designation process would be
unnecessary in order to establish
eligibility for grants and contracts.

44, On its own initiative, FDA is
adding to § 316.20(b)(4) a requirement
that a description of the product for

_ Which orphan-drug designation is
“requested be submitted with the
application for designation. This
obviously important requirement clearly
was within the scope of the NPRM and
its omission was an oversight.

45. A comment requested that FDA
make clear that the agency can grant
orphan-drug designation to new
versions of currently marketed orphan
drugs if they are clinically superior to
the original.

Orphan-drug designation can be
granted to new sponsors of drugs
currently protected by orphan-drug
exclusive marketing if such sponsors
provide a plausible scientific rationale
in an application submitted pursuant to
§ 316.20 that studies to be conducted on
the drug may result in a finding of
clinical superiority over the marketed
drug.

46. Another comment stated that
authoritative information required to
establish prevalence of a disease or
condition and/or cost recovery estimates
may not be available and the final rule
should require only the best information
available or all available references
known to the sponsor.

FDA expects that applicants for
orphan-drug designation will make
every effort to survey the literature and
obtain all information available on the
prevalence of the indicated disease or

condition and cost and marketing
information, where required. Obviously,
if information is not available, it cannot
be submitted, but FDA expects sponsors
to make a diligent search.

47. A comment expressed a fear that
basing the prevalence criterion on the
number of diagnosed patients who
could benefit from the treatment makes
possible orphan designation for a drug
with a huge patient Class.

FDA acknowledges that improved
methods of diagnosis, better Screening,
or altered attitudes towards the need for
therapy may produce a large increase in
the number of patients who are
diagnosed with a disease and could
benefit from a drug. Prior to the
development of such new diagnostic
methods, better screening or new
attitudes, however, FDA has no way of
determining the likely treatment
population other than by relying on
current diagnostic methods and
treatment attitudes.

48, A comment stated that it is
unclear how FDA intends to handle
investigational orphan drugs that are
also being studied for common
indications.

FDA advises that when a drug is being
studied for a common as well as a rare
disease, the rare disease indication will
be handled just as it would be for a drug
being studied only for a rare disease.

49. A comment requested that the
agency provide substantive guidance,
clarification, or definition on how an
applicant can demonstrate that a subset
of patients is “medical: plausible.”

A declines to provic la examples of
medical plausibility or to further’
develop the definition of this term.
Application of the concept is a matter of
judgment based on the specific facts of
each case. Also, any hypothetical
examples FDA might provide could well
be misleading.

50. One comment argued that the
proposed requirement that sponsors
show the actual number of diagnosed.
cases in order to obtain orphan drug
designation would be burdensome. For
many diseases, the comment argued,
there is little epidemilogical data giving
the actual number of affected patients.

It suggested that the appropriate number
for determining prevalence of a disease
is one which reflects both diagnosed
and undiagnosed people.

FDA has already stated its strong
preference for counting only diagnosed
symptomatic patients in determining
prevalence as the best approach to fulfill
the purposes of the Orphan Drug Act.
There is a lack of existing data and of
precise methods for identifying the
number of undiagnosed and
asymptomatic patients who have a given

HeinOnline -- 57 Fed. Reg. 62081 1992

disease. To impose such a requirement *
would add considerably to the cost of
submitting requests for orphan drug
designation without significant
improvement of the factual bases for
such requests. .

51. Another comment agreed with the
requirement that sponsors demonstrate
that the actual number of diagnosed
cases does not exceed 200,000 persons
in the United States as of the date of
application of desi nation. However, the
comment request it the

further and include the requirement in
the final regulation itself rather than just
in the preamble.

FDA agrees and is amending
§ 316.2100) in the final rule accordingly.

52. Two comments argued that the
requirement in Propose §316.21(b)(2)
that a sponsor show estimated
prevalence of any other disease or
condition for which the drug has been
approved or is being developed is
immaterial and urdonoome

The agency has reconsidered the
proposed requirement and decided that
such information would only be
neces: in special circumstances, and
will not be routinely required to make
a decision on applications for
designation. The regulation has been
revised to require the information only
upon request by FDA.

‘53. One comment suggested that FDA
should. divulge its sources and the
processes whereby it verifies that the
sponsor's prevalence data are correct.

FDA will on request provide a list of
its sources used for verification of its
conclusion as to the prevalence of a
disease or condition. In the process,
FDA will not provide any materials
which it is obligated to treat as trade.
secret or confidential.

54. A comment suggested that in the
case of vaccines, disease prevalence
should be calculated based on an
average annual target population over
the prior 7 years rather than on the
target population at the time of
submission of the application for
orphan designation. This, the comment
argued, would provide greater
predictability to the prospective sponsor
of an orphan vaccine.

Under the terms of 21 U.S.C, 360bb,
determinations “shall be made on the
basis of the facts and circumstances as
of the date such drug is designated
* * *." FDA has interpreted this
language to require that estimates of
target population should reflect
numbers of persons who would receive
the vaccine as of the date of designation.
The agency doss not believe that the law
contemplates the use of predictive
models for growth or decline of disease
populations,


62084 Federal Register / Vol. 57, No. 250 / Tuesday, December 29, 1992 / Rules and Regulations
ee es —————

any number of other sponsors. The

ancy believes that the current wording
of this paragraph need not be changed
in order to achieve the objective of the
comment.

70. A comment requested that the
high cost of an orphan drug be
considered evidence that “sufficient
quantities” of the drug are not available
“to meet the needs of persons with the
disease or condition for which the dru;
was designated.” Such a finding would
then allow for the approval of
subsequent identical drugs.

FDA does not have the authority
under existing law to equate high cost
with lack of sufficient quantities, even
though cast may affect access to a drug.
As Congress used the term, “sufficient
quantities” refers only the presence of
enough drug end the means of its
administration to meet the needs of all
in the United States with the disease or
conditicn for which the drug was
designated.

71. Two comments urged that
§ 316.36 clearly sat forth the criteria and
procedure for a determination of
whether “sufficient quantities” are
available, One comment suggested that
the lack of sufficient quantities must be
“long-term” or “deliberate,”
Alternatively, the comment suggested
that a finding of a lack of commitment
on the part of the exclusive marketing
holder should be necessary to break
exclusive marketing. A third comment
suggested as a standard for agency
action the inability to provide the drug
for 1 year. Two comments requested
that FDA make allowances for
temporary production difficulties,
disruptions caused by natural disasters,
interruptions in supplies and
component parts, economic crises, or
other causes beyond the holder’s
control. One comment suggested that
the sponsor should be given adequate
time to restore supplies and that the
revocation should not occur unless.
anothef sponsor can supply at least 75
percent of the market at least 12 months
earlier than the first-approved sponsor.
This comment urged a right of appeal by
the pioneer.

. A advises that it will act quickly to
‘approve another marketing application
when there are insufficient supplies of
the drug or insufficient means of its
administration for any reason. In
granting FDA authority to revoke
exclusive marketing because of
insufficient quantities, Congress did not
refer in any way to the behavior or
attitude of the initial holder, and
revocation is in no sense a punishment.
The provision exists solely in order to
get drugs quickly to the people who
naed them, Accordingly, in determining

whether there are “sufficient quantities”
of d drug, FDA will always make the
needs of patients its primary concern.
For the same reason, the agency.
declines to create an administrative
appeals process for reviewing decisions
under § 316.36.

72. Another comment proposed that
FDA impose, as 8 condition of
maintaining exclusive marketing rights,
a requirement that holders of such rights
must sell whatever quantities are
necessary to subsequent sponsors in
order to conduct required comparative
studies. If the holder refused, it would
be given 60 days to comply or lose
exclusive marketing rights.

FDA believes that most subsequent
sponsors will have access to the holder's
product. However, if that is not the case,
FDA would be without authority to
impose the condition described.
Congress has set forth only two
situations in which exclusive marketing
rights can be removed. The situation
described above is not one of them.

73. Another comment, which agreed
with FDA's decision to rule out cost
considerations in determining the
existence of sufficient quantities of
orphan drugs, suggested that the agency
amend the final rule to specify that no
authority to do so exists.

FDA believes that statements in the
preambles to the NPRM and to this final
Tule are sufficient notification that the
agency believes it lacks authority to
consider costs of drugs in rendering
decisions under § 316.36. Hence, no
change in the rule is necessary.

H. Open Protocols

74, One comment argued that FDA
should make clear that the final rule
will require parallel controlled studies
in order to obtain marketing approval.
The comment noted that open protocols
may be a threat to encouraging placebo-
controlled studies for marketing
approval.

A understands that the existence of
open protocols may increase the
difficulty of recruiting subjects for
placebo-controlled studies. However,
Congress has mandated that FDA
encourage open protocols, and this final
tule will do so. This does not mean that
FDA is relaxing its standards for the
approval of drugs. The requirements for
demonstrating safety and effectiveness
are not any less for orphan drugs than
for any other drugs.

1. Availability of Information

75. One comment suggested that
§ 316.52 should be amended to provide
that notice in the Federal Register be
published concurrently with each
orphan-drug designation decision.

HeinOnline -- 57 Fed. Reg. 62084 1992

FDA disagrees with this su;
current list of drugs designated as
orphan drugs is freely available from
NICODARD (see comment 66 for
address and telephone number).
Publishing each orphan-drug
designation in the Federal Register
would be an unduly burdensome task.

76. A comment su; led that as
much information as possible regarding
details about designated orphan drugs
and applications for designation should
be made available because of the.
public's “right to know.”

> FDA advises that the agency releases

“as much information as it can consistent
with the Freedom of Information Act,
FDA's regulations, and Jong; standing
policies concerning the protection o!
trade secret data and confidential
commercial information.

77. Two comments suggested that
FDA inform a holder of exclusive
marketing rights when a subsequent
sponsor has applied for designation for

6 same drug for the same indication
and that a decision concerning the
sameness or difference of the products
should be made prior to the decision to
designate the second drug.

disagrees. As previously stated,
current information on all designated
orphan drugs is available from
NICODARD (see comment 66). FDA is
treating the filing of applications for
designation as a submission of .
confidential information which will not
be disclosed until and unless
designation is granted. In addition, for
reasons stated previously, FDA cannot
make preliminary decisions as to the
sameness or difference of any two drugs.
Also, as stated i the NPRM preamble,
FDA will designate a structurally
identical subsequent drug as an orphan
drug, even in the face of a holder's
exclusive marketing rights, if the
subsequent sponsor advances a
plausible basis on which to conclude
that its product may be proven
“clinically superior.” This is because
FDA does not went to stifle research and
development of potentially better drugs.

78. One comment stated that the
impact of the regulation would be
“major” for purposes of Executive Order
12291, which requires extensive
regulatory impact and flexibility

analyses prior to promulgation of
regulations having a “major” impact on
small businesses. The comment added
an opinion that such an analysis would
demonstrate that the agency’s “original
test’ (the comment's meaning for this
term is unclear) for determining
sameness/difference presented a more
cost-effective alternative without the
adverse effect on competition, unlike
the proposed policy.

ion. A


62076 Federal Register / Vol. 57, No. 250 / Tuesday, December 29, 1992 / Rules and Regulations

DEPARTMENT OF HEALTH AND
HUMAN SERVICES

Food and Drug Administration
21 CFR Part 316

[Docket No. 85N-0483}

RIN 0905-AB55.

Orphan Drug Regulations

AGENCY: Food and Drug Administration,
HHS.

ACTION: Final rule,

SUMMARY: The Food and Drug
Administration (FDA) is issuing final
regulations to implement section 2 of
the Orphan Drug Act, which consists of
four sections added to the Federal Food,
Drug, and Cosmetic Act (the act). In the
Federal Register of January 29, 1991 (56
FR 3338), the agency proposed
regulations to implement this section of
the Orphan Drug Act. The Orphan

Act directs FDA to provide written
recommendations on studies required
for approval of a marketing application
for an orphan drug. It also provides for
the designation of drugs, including
antibiotics and biological products, as
orphan drugs when certain conditions
are met, and it provides conditions
under which a sponsor of an approved
orphan drug enjoys exclusive approval
for that drug for the orphan indication
for 7 years following the date of the
drug’s marketing spproval. Finally,
section 2 of the Orphan Drug Act
encourages sponsors to make orphan
drugs available for treatment on an
“open protocol” basis before the drug
has been approved for general
marketing. This action will benefit
consumers by encouraj

manufacturers to develop and make
available to patients drugs for diseases
and conditions that are rare in the
United States.

EFFECTIVE DATE: January 28, 1993.

FOR FURTHER INFORMATION CONTACT:
Emery J. Sturniolo, Office of Orphan
Products Development (HF-35), Food
and Drug Administration, 5600 Fishers
Lane, Rockville, MD 20857, (301) 443—
4718,

‘SUPPLEMENTARY INFORMATION:
1. Background

In enacting the Orphan Drug Act (Pub.
L, 97-414), Congress required FDA to
issue regulations for the implementation
of sections 525 and 526 (21 U.S.C,
360ae-360bb) that the Orphan Drug Act
added to the act. These sections relate
to written FDA recommendations on
studies required for approval of
marketing applications for orphan drugs

and for the designation of eligible drugs
as orphan drugs. Accordingly, in the
Federal Register of January 29, 1991 (56
FR 3338), FDA issued a notice of
proposed rulemaking entitled “Orphan
Regulations” for the
imp! lementation of these sections as well
as for the implementation of sections
527 and 528 of the act (21 U.S.C. 360cc—
360d), which relate to exclusive
marketing for orphan drugs and the
encouragement of sponsors to make
orphan available for treatment on
an “open protocol” basis before the drug
has been approved for general
marketing. This notice of proposed
rulemaking will hereinafter be referred
to as the “NPRM.”

FDA announced that the proposed
regulations codified existing
administrative practices implementing
the Orphan Drug Act as amended. The
agency noted that the proposed
regulations would, where possible,
attempt to ensure that the act’s
incentives were available only when
they would further the p joses of the

an Drug Act and that the act
Sead never be used to block
significant improvements in the
treatment of rare diseases.

I. Summary of and Response to
Comments

In response to FDA's NPRM, the
agency received 40 public comments.
Most comments came from either
companies or trade associations of
companies that are marketing or hope to
market orphan drugs and from two
associations representing patients with
rare diseases or conditions. FDA has
responded to all comments that were
received and filed in FDA's Dockets
Management Branch. Most comments
are considered in the numerical order of
the proposed sections to which they are
related,

A. General Comments on the Preamble

1, One comment addressed the
following statement in the Preamble:
“FDA roposes that this regulation,
when final, will apply only
prospectively. Therefore, FDA does not
plan to reconsider any prior actions
under the Orphan Drug Act, or change
any orphan-drug status, to conform to
the final regulation.” (See NPRM,
section II.B., paragraph 18). The
comment expressed the fear that the
prospective-only application of the
regulation might mean that FDA would
be unable to approve a clinically
superior subsequent drug otherwise
identical to a pioneer that had been
approved and obtained orphan drug
exclusive marketing prior to the
effective date of this rule.

HeinOnline -- 57 Fed. Reg. 62076 1992

FDA advises that the fear expressed in
the comment is groundless, FDA meant
only to rule out reconsideration of -
previous drug designation and approval
decisions. FDA did not mean that it
would refuse to approve a clinically
superior drug that might not have been
spproveble prior to promulgation of this
tule,

2. Another comment objected to the
‘use of the proposed rule as operational
policy prior to issuance of final
regulations. The comment ed that
the final rule should not apply
retrospectively to drugs that held.
orphan designation prior to the effective
date of the final rule.

FDA has not relied on the roposed
rule to dictate operational policy during
the interim period between the
publication of the NPRM and the
publication of this final rule. However,
FDA decision‘s during this period have
as a matter of fact been consistent with
the provisions of the proposed rule. As
to retrospective application of the
proposed rule, FDA does not regard the
sppli ication of these regulations to
already designated drugs as a
retrospective application as long as FDA
does not reconsider previous decisions
concerning these drugs,

3. One comment stated that
designated orphan drugs should be
exempt from all investigational new
drug application (IND), new drug
application (NDA), product license
application (PLA), and Establishment
License Application (ELA) user fees, as
user fees for review of these drugs
would be inconsistent with the intent of
the Orphan Drug Act.

FDA advises that the question of user
fees is outside the purview of this

lation. However, in the future, -
when and if user fees are considered,
designated orphan drugs will be
considered for exemption from them,

4, Several comments urged that
marketing applications for drugs whose
approvals are temporarily barred by the
exclusive marketing provisions of the
Orphan Drug Act nevertheless be
completely reviewed so that they may
be quickly spproved upon the
expiration of the 7 years’ exclusive

: marketing

Period.

FDA advises that, once the agency
determines that approval of a drug
would be temporarily barred by the
exclusive mar! ing provisions of the
Orphah Drug Act, the timing of the
review will be decided on a case-by-case
basis by the appropriate division of the
Center for Biclogics Evaluation and
Research or the Center for Drug
Evaluation and Research. Such
decisions will be based on time and
resource considerations as well as on


Federal Register / Vol. 57, No. 250 / Tuesday, December 29, 1992 / Rules and Regulations 62087

(A) Two protein drugs would be
considered the same if the only
differences in structure between them
were due to post-translational events or
infidelity of translation or transcription
or were minor differences in amino acid
sequence; other potentially important
differences, such as different
glycosylation patterns or different
tertiary structures, would not cause the
drugs to be considered different unless
the differences were shown to be
clinically superior.

{B) Two polysaccharide drugs would
be considered the same if they had
identical saccharide repeating units,
even if the number of units were to vary
and even if there were
postpolymerization modifications,
unless the subsequent drug could be
shown to be clinically superior.

{C) Two polynucleotide drugs
consisting of two or more distinct
nucleotides would be considered the
same if they had an identical sequence:
of purine and pyrimidine bases (or their
derivatives) bound to an identical sugar
backbone (ribose, deoxyribose, or
modifications of these sugars), unless
the subsequent drug were shown to be
clinically superior.

(D) Closely related, complex partly
definable drugs with similar therapeutic
intent, such as two live viral vaccines
for the same indication, would be
considered the same unless the
subsequent drug was shown to be
clinically superior.

(14) Sponsor means the entity that
assumes responsibility for a clinical or
nonclinical investigation of a drug,
including the responsibility for
compliance with applicable provisions
of the act and regulations. A sponsor
may be an individual, partnership,
corporation, or Government agency and
may be a manufacturer, scientific Jerk
institution, or an investigator regularly
and lawfully engaged in the
investigation of drugs. For purposes of
the Orphan Drug Act, FDA considers the
real party or parties in interest to be a
sponsor.

$316.4 Address for submissions.

All correspondence and requests for
FDA action pursuant to the provisions
of this rule should be addressed as
follows: Office of Orphan Products
Development (HF~-35), Food and Drug
Administration, 5600 Fishers Lane,
Rockville, MD 20857.

Subpart B—Written Recommendations
for Investigations of Orphan Drugs.
§316.10 Content and format of a request
for written recommendations,

{a) A sponsor's request for written
recommendations from FDA concerning

the nonclinical and clinical
investigations necessary for approval of
a marketing application shall

submitted in the form and contain the
information required in this section.
FDA may require the sponsor to submit
information in addition to that specified
in paragraph (b) of this section if FDA
determines that the sponsor's initial
request does not contain adequate
information on which to base
recommendations.”

(b) A sponsor shal] submit two copies
of a completed, dated, and signed
request for written recommendations
that contains the following:

(1) The sponsor's name and address.

(2) A statement that the sponsor is
requesting written recommendations on
orphan-drug development under section
525 of the act.

(3) The name of the sponsor's primary
contact person and/or resident agent,
and the person’s title, address, and
telephone number.

(4) The generic name and trade name,
ifany, of the drug and a list of the drug
product's components or description of
the drug product's formulation, and
chemical and physical properties.

(5) The proposed dosage form and
route of administration.

(6) A description of the disease or
condition for which the drug is
proposed to be investigated and the
proposed indication or indications for
use for such disease or condition.

(7) Current regulatory and marketing
status and history of the drug product,
including:

G) Whether the Product is the subject
of an IND or a marketing application (if
the product is the subject of an IND or
a marketing application, the IND or
marketing application numbers should
be stated and the investigational or
approved indication or indications for
use specified);

(ii) Known marketing experience or
investigational status outside the United
States;

(iii) So far as is known or can be
determined, all indications previously
or currently under investigation

anywhere;
. Gv) All adverse regulatory actions

taken by the United States or foreign -
authorities,

(8) The basis for concluding that the
drug is for a disease or condition thet is
rare in the United States, including the
following:

(i) The size and other known
demographic characteristics of the
patient population affected and the
source of this information. .

(if) For s intended for diseases or
conditions affecting 200,000 or more
people in the United States, or for a

HeinOnline -- 57 Fed. Reg. 62087 1992

vaccine, diagnostic drug, or preventive
drug that would be given to 200,000 or
more persons per year, a summary of the
sponsor's basis for believing that the
disease or condition described in
paragraph (b)(6) of this section occurs 80
infrequently that there is no reasonable
expectation that the costs of drug
development and marketing will be

- recovered in future sales of the drug in

the United States. The estimated costs
and sales data should be submitted as
provided for in § 316.21(c).

(9) A summary and analysis of
available data on the pharmacologic
effects of the drug.

(10) A summary and analysis of
available nonclinical and clinical data

rtinent to the drug and the disease to
fe studied including copies of pertinent
published reports, When a drug

roposed for orphan drug designation is
Intended to treat a lift-threatening or
severely debilitating illness, especially
where no satisfactory alternative
therapy exists, the sponsor may wish
voluntarily to provide this information.
A sponsor of such a drug may be
entitled to expeditious development,
evaluation, and marketing under 21 CFR
part 312, subpart E,

(11) An explanation of how the data
summarized and analyzed under
paragraphs (b)(9) and (b)(10) of this
section support the rationale for use of
the drug in the rare disease or condition.

(12) A definition of the population
from which subjects will be Identified
for clinical trials, if known.

(13) A detailed eutline of any
protocols under which the drug has

n or is being studied for the rare
disease or condition and a summary and
analysis of any available data from such
ote The 1 a8 to the

(14) yonsor’s proposal as to
scope of nouclinical and clinical
investigations needed to establish the
safety and effectiveness of the drug. -

(15) Detailed protocols for each
proposed United States or forei
clinical investigation, if available.

(16) Specific questions tobe
addressed by FDA in its
recommendations for nonclinical
laboratory studies and clinical
investigations.

$316.12 Providing written
recommendations.

{a) FDA will provide the sponsor with
written recommendations concerning
the nonclinical laboratory studies and
clinical investigations necessary for
approval of a marketing application if
Sonn of {he reasons described in 1

316.14 for refusing to do so applies.

(b) When a sponsor seeks ‘weltien
recommendations at a stage of drug


62086 Federal Register / Vol. 57, No. 250 / Tuesday, December 29, 1992 / Rules and Regulations

316.23 Timing of requests for orphan-drug
designation; designation of already
approved drugs.

316.24. Granting orphan-drug designation.

316.25 Refusal to grant orphan-drug
designation.

316.26 Amendment to orphan-drug
designation.

316.27 Change in ownership of orphan-drug
designation.

316.28 Publication of orphan-drug
designations.

316.29 Revocation of orphan-drug
designation.

316.30 Annual reports of holder of orphan-
drug designation.

‘Subpart D—Orphan-drug Exclusive

Approval

316.31 Scope of orphan-drug exclusive
approval.

316.34 FDA recognition of exclusive
approval.

316.36 Insufficient quantities of orphan
drugs.

‘Subpart E—Open Protocols for

Investigations

316.40 Treatment use of a designated
orphan drug.

Subpart F—Avallability of Information

316,50 Guidelines.

316.52 Availability for public disclosure of
data and information in requests and
applications,

Authority: Secs. 525, 526, 527, 528, 701 of

the Federal Food, Drug, and Cosmetic Act (21

U.S.C. 360aa, 360bb, 360ce, 360dd, 371),

Subpart A—General Provisions

§316.1 Scope of this part.

(a) This part implements sections 525,
526, 527, and 528 of the act and
provides procedures to encourage and
facilitate the development of drugs for
rare diseases or conditions, including
biological products and antibiotics. This
part sets forth the procedures and
requirements for:

(1) Submissions to FDA of:

(i) Requests for recommendations for
irvestigations of drugs for rare diseases
or conditions;

(ii) Requests for designation of a drug
for a rare disease or condition; and

(ii) Requests for gaining exclusive
approval for a drug product for a rare
disease or condition.

(2) Allowing a sponsor to provide an
investigational drug product under a
treatment protocol to patients who need
the drug for treatment of a rare disease
or condition,

(b) This part does nat apply to food,
medical devices, or drugs for veterinary

use,

(c} References in this part to
regulatory sections of the Code of
Federal Regulations are to chapter I of
title 21, unless otherwise noted.

§316.2 Purpose.

‘The purpose of this part is to establish
standards and procedures for
determining eligibility for the benefits
provided for in section 2 of the Orphen
Drug Act, including written
recommendations for investigations of
orphan drugs, a 7-year period:of
exclusive marketing, and treatment use
of investigational orphan drugs. This
part is also intended to satisfy Congress’
requirements that FDA promulgate
procedures for the implementation of
sections 525{a) and 526(a) of the act.

§316.3 Definitions. -

(a) The definitions and interpretations
contained in section 201 of the act apply
to those terms when used in this part.

(b) The following definitions oft terms
apply to this part:

'1) Act means the Federal Food, Drug,
and Cosmetic Act as amended by
section 2 of the Orphan Drug Act
(sections 525-528 (21 U.S.C. 360a—
360dq)).

(2) Active moiety means the molecule
or ion, excluding those appended
portions of the molecule that cause the
drug to be an ester, salt (including a salt
with hydrogen or coordination bonds),
or other noncovalent derivative (such as
a complex, chelate, or clathrate) of the
molecule, responsible for the
physiological or pharmacological action
of the drug substance.

(3) Clinically superior means that a
drug is shown to provide a significant
therapeutic advantage over and above
that provided by an approved orphan
drug (that is otherwise the same drug)
in one or more of the following ways:

(i) Greater effectiveness than an
approved orphan drug (as assessed by
effect on a clinically meaningful
endpoint in adequate and well
controlled clinical trials). Generally, this
would represent the same kind of
evidence needed to support a
comparative effectiveness claim for two
different drugs; in most cases, direct
comparative clinical trials would be
necessary; or

(ii) Greater safety in a substantial
portion of the target populations, for
example, by the eliminetion of an
ingredient or conteminant that is
associated with relatively frequent
adverse effects. In some cases, direct
comparative clinical trials will be
necessary; or :

. (iii) Inunusual cases, where neither
greater safety nor greater effectiveness
has been shown, a demonstration that
the drug otherwise makes a major
contribution to patient care.

(4) Director means the Director of
FDA's Office of Orphan Products
Development.

HeinOnline -- 57 Fed. Reg. 62086 1992

(5) FDA means the Food and Drug
Administration.

(6) Holder means the sponsor in
whose name an orphan drug is
designated and approved.

(7) IND means an investigational new
drug application under part 312 of this
chapter.

(8) Manufacturer means any person or
agency engaged in the manufacture of a
drug that is subject to investigation end
approval under the act or the biologics
provisions of the Public’ Health Service
Act (42 U.S.C. 262-263).

(9) Marketing application means an
application for approval of a new drug
filed under section 505(b) of the act, a
request for certification of an antibiotic
under section 507 of the act, or an
application for a biological product/
establishment license submitted under
section 351 of the Public Health Service
Act (42 U.S.C. 262).

(10) Orphan drug means a drug
intended for use in a rare disease or
condition as defined in section 526 of
the act.

(11) Orphan-drug designation means
FDA's act of granting a request for
designation under section 526 of the act.

(12) Orphan-drug exclusive approval
or exclusive approval means that,
effective on the date of FDA spproval as
stated in the approval letter of a
marketing application for a sponsor of a
designated orphan drug, no approval
will be given to a subsequent sponsor of
the same drug product for the same
indication for 7 years, except as
otherwise provided by law or in this
part.

(13) Same drug means:

(i) If it is a drug composed of small
molecules, a drug that contains the same
active moiety es a previously approved
drug and is intended for the same use
as the previously approved drug, even tf
the particular ester or salt (including &
salt with hydrogen or coordination
bonds) or other noncovelent derivative
such as @ complex, chelate or clathrate
has not been previously approved,
except that if the subsequent drug can
be shown to be clinically superior to the
first drug, it will not be considered to
be the same drug.

{ii) If it is a drug composed of large
molecules (macromolecules), a drug that
contains the same principal molecular
structural features (but not necessarily
all of the same structural features) and
is intended for the same use as a b
previously approved drug, except that,
if the subsequent drug can be shown to
be clinically superior, it will not be
considered to be the same drug. This
criterion will be applied as follows to
different kinds of macromolecules:


Federal Register / Vol. 57,

No. 250 / Tuesday, December 29, 1992 / Rules and Regulations 62083

of designated orphan drugs to submit
annual reports detailing progress made
in the development of their orphan
drugs in the past year. The agency
believes that this provision is within the
scope of the NPRM and will allow FDA
to follow the development of orphan
drugs and to identify and help to
remove roadblocks to drug development
and marketing.

65. A comment concerning § 316.27
argued that submission to FDA of copies
of agreements embodying transfers of
ownership of orphan-drug designation
tights should be voluntary and not
mandatory.

FDA agrees, and § 316.27(a)(2)(iii) has
been changed in the final rule to make
clear that either a list of rights assigned
and reserved or copies of relevant
agreements will meet the requirement of
this paragraph.

66. Several comments argued that
FDA should establish a process whereby
the agency routinely.informs sponsors
when they are investigating drugs
whose approval is likely to be barred by
the Orphan Drug Act.

FDA believes that it is now
adequately making this information
available. The agency provides a list
(updated monthly) of all designated
orphan drugs to all sponsors who file a
request for orphan-drug designation.
Additionally, this list is available upon
request from the National Information
Center for Orphan Drugs and Rare
Diseases (NICODARD), P.O. Box 1133,
Washington, DC 20013-1133 (phone 1—
800~456~3505). Hence, no new
procedure is necessary.

66a, On its own initiative, FDA is
revising proposed § 316.28 to reflect
current practice of making available
monthly an updated list of all
designated orphan drugs and making
available anmually a cumulative
updated list of all designated orphan
drugs. In the past, the agen published
an annual list in the Federal Register;
however, it has found that its current
practice is a more effective means of
making the information available in a
timely manner. The lists are on display
at the FDA Dockets Management Branch
and are available from NICODARD (see
comment 66).

67. Several comments by holders of
orphan-drug exclusive approval
requested that such holders be accorded
notice and an opportunity for a hearing
when faced with the imminent approval
of a similar drug that FDA considers to
be a different drug for purposes of the

act.

On March 4, 1987, in response toa
citizen petition filed by Genentech, Inc.,
FDA declined to establish such a
challenge procedure, citing the

following grounds: (1) There is no
property right to exclusive approval
under the Orphan Drug Act; and (2)
procedures are already in place that
accord a holder of exclusive approval all
the process that would be due under
these circumstances. These procedures
include the citizen petition procedure
(21 CFR 10.30) and a right of subsequent
judicial review in the courts.

In the NPRM (section ILI. (56 FR
3344)), FDA cited the following reasons
for declining to create such procedures:
(1) Neither the Constitution, nor the ~
Administrative Procedure Act, nor the
Orphan Drug Act requires a hearing of
this kind; (2) hearings are time
consuming and resource intensive; and
(3) the citizen petition procedure is
available to a holder of exclusive
approval. Furthermore, in the NPRM,
FDA refused to propose creation of a
less formal nonhearing administrative
challenge procedure because: (1) There
is no requirement for it under the
Constitution or any statute; (2)
postdecisional judicial review is
preferable to an administrative
challenge procedure because a
predecisional challenge procedure
would be time consuming and could be
used for purposes of delay; (3) it would
be difficult to determine who should
have the right to challenge an incipient
approval and who would be entitled to
what notice of what anticipated agen:
action; and, finally, (4) a predecisional
administrative challenge procedure
would present difficulty due to the
nondisclosability of relevant
information under FDA’s public
information regulations.

Despite a careful reconsideration of its
position on the question of establishing
predecisional challenge procedures, the
agency declines to adopt such
procedures, The other reasons given in
the NPRM for declining to do so are still
valid and even if a reviewing court were
to hold that orphan drug exclusivity is
a constitutionally protected property
right, such a holding would not
automatically require that a firm whose
drug has been granted exclusivity be
accorded a predecisional hearing.
Matthews v, Eldridge, 424 U.S. 319
(1976); Mackey v. Montrym, 443 U.S. 1
(1979); Barry v. Barchi, 443 U.S. 1
(1979). Under these and other cases, the
“property” right to exclusive marketing,
if it exists, does not always require that
a hearing take place before approval of
what FDA concludes is a similar but
different drug.

FDA is still persuaded that its current
regulations satisfy any applicable
requirement of due process. Insofar as
notice is concerned, in FDA’s view, 6
holder of exclusive approval would

HeinOnline -- 57 Fed. Reg. 62083 1992

learn that a potential competitor drug
has been designated, as FDA is required
to publish all such designations. See 21
U.S.C, 360bb(c) and §,316.52(d), the
latter of which is codified by this notice.
As to a procedure for Challenging an
approval, either impending or after the
fact, the citizen petition procedure

rovides such a procedure, and the

older of the earlier designation has a

t to seek judicial review of an

adverse decision. This procedure is
sufficient under Barry v. Barchi, supra.

In addition, FDA is still concerned
about the potential for holders of
exclusive approval to delay the
marketing of competitors’ approvable
subsequent drugs by use of any
challenge procedure. The fact that all
challenge procedures, particularly
hearings, are time consuming an
expensive, adds to FDA's reluctance to
create such procedures.

For the above reasons, FDA has, after
careful consideration, decided that the
final rule should not include an
opportunity for a hearing or other

allenge procedures for holders of
exclusive approval to challenge
subsequent drug approvals.

68, One comment argued that FDA
should notify sponsors of marketing

* applications for orphan drugs when

another sponsor of the same drug for the
same use hes attained orphan drug
exclusive marketing status. The
comment suggested that the sponsor
barred from marketing approval by
orphan exclusive marketing should
be informed, within 30 days, of the
approval of the drug receiving exclusive
approval,
A disagrees. As stated previously,

FDA usually does not know that
approval of a marketing application is
barred by the Orphan Drug Act until the
review of that application shows that
the subsequent drug is the same as the

ioneer. Hence, FDA cannot set a time

limit on notification of subsequent
sponsors, In addition, FDA routinely
publicizes all marketing application
approvals. Therefore, it is reasonable to
expect that subsequent sponsors can,
with minimal effort, learn of these
approvals,

G. Orphan-Drug Exclusive Approval

69, A comment suggested that
§ 316,30 be reworded to allow more
than one company to share exclusive
marketing rights if the first company to
obtain FDA approval agrees.

FDA advises that § 316.30(a)(3)
provides that a holder of exclusive
approval may give consent for other
marketing applications to gain approval.
This provision enables the holder to
share exclusive marketing rights with


Federal Register / Vol. 57, No. 250 / Tuesday, December .29, 1992 / Rules and Regulations 62079

drug represents a major contribution to
patient care.

FDA agrees with the latter comments.
Although FDA understands that costs
can indeed have a major impact on
access to a drug, FDA hes no authority
over drug pricing or any authority to
consider it in drug approval. Further,
considering price as a factor in whether
or not a drug makes a major
contribution to patient care is
problematic. If FDA could approve a
drug because its relatively low cost were
deemed to constitute a major
contribution to patient care, there would
be no effective tool that FDA could use
to prevent the sponsor of the subsequent
drug from quickly raising its price to the
level of its competitor's price after
approval.

25. Several comments suggested that
FDA should liberally construe the
concept, “major contribution to patient
care.” These comments advanced the
following examples of factors that the
comments would have the agency
consider: convenient treatment location;

- duration of treatment; patient comfort;
improvements in drug efficiency;
advances in the ease and comfort of
drug administration; longer periods
between doses; and potential for self
administration.

FDA agrees that these factors, when
applicable to severe or life-threatening
diseases, might sometimes be
legitimately considered to bear on
whether a drug makes a major
contribution to patient care. However,
this determination will have to be made
on a case-by-case basis.

26. In contrast to the previous
comments, three comments argued that
the concept of “major contribution to
patient care” should be narrowly
construed so that only truly important
differences could result in a finding of
a “major contribution” if greater safety
and/or effectiveness are not involved. |
The comments urged that minor
improvements in patient convenience,
such as a change that allows for home
use of a drug for the first time, or
“political considerations” should not
qualify and that, in any case, head-to-
head comparative clinical trials should
be required.

Home use or improved patient access
may or may not constitute a. major
contribution to patient care, depending
on the drug and the nature of the
disease, among other things. While
comparative trials are, of course,
preferred and will usually be required,
it is possible that, in some
circumstances, a demonstration of a
major contribution to patient care can be
made without such trials.

27. Several comments argued that a
subsequent drug should be deemed to
be clinically superior to the first
approved drug if its delivery system
results in enhanced compliance among
patients who would otherwise
‘experience compliance difficulties.
Examples provided for variations in
drug delivery warranting such a finding
included: novel inhalation therapy; oral,
intranasal, inhalational, transdermal
vehicles of sdministration where
intravenous means were once all that
was available; innovative time-release
delivery mechanisms; the availability of
an improved delit system that
eliminates the risk of hemophilia B; and
a new parenteral administration that
permits once-a-day administration
rather than four-times-a-day injections
or infusions,

FDA agrees that a change in drug
delivery systems might in some cases
constitute a major contribution to
patient care, but this can only be
decided on a case-by-case basis,
considering the nature of the disease or
condition, the nature of the drug, the
nature of the mode of administration,
and other factors.

28, Three comments stated that

~ investigational drugs that are

significantly purer than approved dru;
should be considered clinically superior
without comparative clinicel trials. An
example provided was investigational
factor IX products, which are 90 percent
factor IX as compared to currently
marketed factor 1X products, which are
only 10 percent factor IX.

If sponsors provide evidence to
demonstrate that an improvement in
purity will cause a drug to mest one or
more of the criteria for clinical
superiority, FDA will consider such

evidence, which should normall

include comparative clinical trials.

29, A comment argued that the NPRM
ignores the precedent set in Genentech
v. Bowen and Young, 676 F. Supp. 301
(D.D.C. 1987), in which the court
allegedly held that one amino acid
difference made a different drug. The
comment argued that the final rule.
should reflect this alleged holding in
order to allow FDA to fend off future

al challenges.

A disagrees with the comment's
characterization of the Genentech v.
Bowen and Young holding. In that case,
the court held only the orphan-drug
designation of a subsequent drug during
the pioneer’s period of exclusive
marketing was lawful because the
subsequent drug was of synthetic origin
and did not present the danger of
contamination with disease that the

jioneer, which was manufactured from
juman cadavers, did. Although in that

HeinOnline -- 57 Fed. Reg. 62079 1992

case it was argued that one amino acid
difference made a different drug, the.
court never so held. For reasons
described above (see comment 10) and
in the NPRM, FDA has not adopted this
principle in the final rule.

30. One comment suggested that
differences in those of
macromolecules demonstrated to be
important for function should form the
basis for determining whether two given
molecules are different.

Although some changes in critical
parts of the molecule, e.g., in the
primary structure at the active site,
would alter the function of the
macromolecule, FDA does not agree that
any change in the part of a molecule

- important for function should be

considered a basis for defining a drug as.
different. Many changes, even in those
parts of the molecule, would be of no
significance. The agency believes that
the changes that are of significance can
be evaluated in preclinical laboratory
and animal studies and in clinical trials,
and, if they show promise of causing a
chemically significant difference, the
sponsor can develop the drug and

lemonstrate the difference. A showing
of such a difference would represent a
basis for approving the drug as a
different q

31. Another comment urged FDA to .
develop a guidance document
describing differences in amino seid
sequence of a protein which would be
considered “minor,”

FDA declines to sat forth hypothetical
situations of the kind asked for, as such
determinations will be highly fact-
dependent.

32. One comment urged that function
should play some role in defining when
drugs composed of protein are the same.
When drugs show similar qualitative
activity that appears related to their
effectiveness, in vivo or in vitro, the
comment said, and the amino acid
sequence of the subsequent product is
coincident with that of the pioneer, the
drug should be considered the same
“ab

A agrees with the comment
generally, Under the criterion 3
proposed for adoption in the NPRM (see
comment 21), drugs with similar
qualitative activity and similar amino
acid sequence would not be considered
different from the pioneer unless some
clinical superiority could be
demonstrated.

33. One comment urged that FDA
should deem a drug different from the
pioneer if FDA would require a full
NDA with original supporting date
before approving the subsequent drug.
The comment found this approach
preferable to “FDA’s proposed mixture


62090 Federal Register / Vol. 57, No. 250 / Tuesday, December 29, 1992 / Rules and Regulations

manner all relevant financial records
and sales data of the sponsor and
manufacturer.

§316.22  Permanent-resident agent for
foreign sponsor.

Every foreign sponsor that seeks
orphan-drug designation shall name a
permanent resident of the United States
as the sponsor's agent upon whom
service of all processes, notices, orders,
decisions, requirements, and other
-communications may be made on behalf.
of the sponsor. Notifications of changes
in such agents or changes of address of
agents should preferably be provided in

advance, but not later than 60 days after
the effective date of such changes. The
permanent-resident agent may be an
individual, firm, or domestic
corporation and may represent any
number of sponsors. The name of the
permanent-resident agent shall be
provided to: Office of Orphan Products
Development (HF-35), Food and Drug
Administration, 5600 Fishers Lane,
Rockville, MD 20857.

§316.23 Timing of requests for orphan-
drug designation; designation of aiready
‘approved drugs. .

(a) A sponsor may request orphan- *
drug designation at any time in the drug
development procass prior to the
submission of a marketing application
for the drug product for the orphan
indication.

(b) A sponsor may request orphan-
drug designation of an already approved
drug product for an unapproved use
without regard to whether the prior
marketing approval was for an orphan-
drug indication.

§316.24 Granting orphan-drug
designation.

{a) FDA will grant the request for
orphan-drug designation if none of the
reasons described in § 316.25 for
requiring or permitting refusal to grant
such a request applies,

{b) When a request for orphan-drug
designation is granted, FDA will notify
the sponsor in writing and will
publicize the orphan-drug designation
in accordance with § 316.28.

§316.25 Refusai to grant orphan-drug  *
designation. .

{a) FDA will refuse to grant a request
for orphan-drug designation if any of the
following reasons apply: :

(1) The drug is not intended for a rare
disease or condition because:

(i) There is insufficient evidence to
support the estimate that the drug is.
intended for treatment of a disease or
condition in fewer than 200,000 people
in the United States, or that the drug is
intended for use in prevention or in

diagnosis in fewer than 200,000 people
annually in the United States; or

(ii) Where the drug is intended for
prevention, diagnosis, or treatment of a
disease or condition affecting 200,000 or
more people’in the United States, the
sponsor has failed to demonstrate that

there is no reasonable expectation that

development and production costs will
be recovered from sales of the drug for
the orphan indication in the United
States. A sponsor's failure to comply
with § 316.21 shell constitute a failure
to make the demonstration required in.
this paragraph.

(2) There is insufficient information
about the drug, or the disease or
condition for which it is intended, to
establish a medically plausible basis for
expecting the drug to be effective in the
prevention, diagnosis, or treatment of
that disease or condition.

(3) A drug that is otherwise the same
drug as one that already has orphan-
drug exclusive approval for the same
tare disease or condition and the
sponsor has not submitted a medically
plausible hypothesis for the possible
clinical superiority of the subsequent
drug. -

(b) FDA may refuse to grant a request
for orphan-drug designation if the
request for designation contains an
untrue statement of mi&terial fact or -
omits material information.

§316.26 Amendment to orphan-drug
designation.

(a) At any time prior to approval of a
marketing application for a designated
orphan drug, the sponsor holding
designation may spply for an
amendment to the indication stated in
the orphan-drug designation if the
proposed change {s due to new and
unexpected findings in research on the
drugs, information arising from FDA
recommendations, or unforesean
developments in treatment or diagnosis
of the disease or condition.

(b) FDA will grant the amendment if
it finds that the initial designation
request was made in good faith and that
the amendment is intended to conform
the orphan-drug designation indication
to the results of unanticipated research
findings, to unforeseen developments in
the treatment or diagnosis of the disease
or condition, or to changes based on
FDA recommendations, and that, as of
the date of the submission of the
amendment request, the amendment
would not result in exceeding the
prevalence or cost recovery thresholds
in § 316.21 (a)(1) or (a)(2) upon which
the drug was originally designated.

HeinOnline -- 57 Fed. Reg. 62090 1992

'§316.27 Change In ownership of orphan-
drug designation.

(a) A sponsor may transfer ownership
of or any beneficial interest in the
orphan-drug designation of a drug toa
new sponsor. At the time of the transfer,
the new and former owners are required
to submit the following information to

A:

(1) The former owner or assignor of
rights shall submit a letter or other
document that states that all or some
rights to the orphan-drug designation of
the drug have been transferred to the
new owner or assignee and that a
complete copy of the request for orphan-
drug designation, including any

~ amendments to the request,

supplements to the granted request, and
correspondence relevant to the orphan-

drug designation, has been provided to

the new owner or assignee,

(2) The new owner or assignee of
rights shall submit a statement
accepting orphan-drug designation and
a letter or other document containing
the following: -

(i) The date that the change in
ownership or assignment of rights is
effective;

{ii) A statement that the new owner
has a compete copy of the request for
orphan-drug designation including any
amendments to the request,
supplements to the granted request, and
correspondence relevant to the orphan-
drug designation; and

{iii) A specific description of the
rights that have been assigned and those
that have been reserved. This may be
satisfied by the submission of either a
list of rights assigned and reserved or
copies of all relevant agreements
between assignors and assignees; and

(iv) The name and address of a new
primary contact person or resident
agent.

(b) No sponsor may relieve itself of
responsibilities under the Orphan Drug
Act or under this part by assigning
rights to another person without:

1) Assuring that the sponsor or the
assignee will carry out such
responsibilities; or

(2) Obtaining prior permission from
FDA. :

§316.28 Publication of orphan-~drug
designations.

Each month FDA will update
publically available list of drugs
designated as orphan drugs. A
cumulative, updated list of all
designated drugs will be provided"
annually. These will be placed on file at
the FDA Dockets Management Branch,
and will contain thé following
information:

{a) The name and address of the
manufacturer and sponsor;


62092 Federal Register / Vol. 57, No. 250 / Tuesday, December 29, 1992 / Rules avd Regulations

Subpart F—Avaltability of Information

§316.50 Guidelines.

FDA's Office of Orphan Products
Development will maintain and make
publicly available a list of guidelines
that apply to the regulations in this part.
‘The list states how a person can obtain
‘a copy of each guideline. A request for
a copy of the list or for any guideline
should be directed to the Officeof
Orphan Products Development (HF-35),
Food and Drug Administration, 5600
Fishers Lane, Rockville, MD 20857.

§ 316.52 Avallability for public disclosure
of data and information In requests and
applications.

(a) FDA will not publicly disclose the
existence of a request for orphan-drug,
designation under section 526 of the act
prior to final FDA action on the request
unless the existence of the request has

been previously publicly disclosed
acknowledged. :

{b) Whether or not the existence of a
pending request for designation has

nm publicly disclosed or
acknowledged, no data or information
in the request are available for public
disclosure prior to final FDA action on
the request.

(c) Upon final FDA action on a
request for designation, FDA will
determine the public availability of data
and information in the request in
accordance with part 20 and § 314.430
of this chapter and other applicable
statutes and regulations,

(d) In accordance with § 316.28, FDA
will make a cumulative list of all orphan
drug designations available to the public
and update such list monthly.

{e) FDA will not publicly disclose the
existence of a pending marketing

HeinOnline -- 57 Fed. Reg. 62092 1992

application for a designated orphan
drug for the use for which the drug was
designated unless the existence of the
pplication has been previously
publicly disclosed or acknowledged.

(f) FDA will determine the public
availability of data and information
contained in pending and approved
marketing applications for a designated
orphan drug for the use for which the
drug was designated in accordance with
part 20 and § 314.430 of this chapter
and other applicable statutes an:
regulations.

Dated: May 21, 1992.

David A. Keseler,

Commissioner of Food and Drugs.

Louis W. Sullivan,

Secretary of Health and Human Services.
TPR Doc, 92-31192 Piled 12-28-92; 8:45 am]
BILLING CODE 4160-01-41


62078 Federal Register / Vol. 57, No. 250 / Tuesday, December 29, 1992 / Rules and Regulations

manufactured, unless such factors lead

to clinical superiority.

14, Another comment suggested that
the NPRM preamble could be read to
indicate that glycosylation is not a post-
translational modification.

FDA certainly did not intend such a
meaning and takes this opportunity to

make clear that it views glycosylation as
a post-translational modification,

15. The comment addressed in the
previous ph also stated the view
that, under the proposed rule, clinical
superiority will always lead to approval
of a subsequent drug.

FDA agrees with the comment's
viewpoint. Assuming that a subsequent
drug's marketing application is
otherwise approvable, FDA will not
interpret the Orphan Drug Act to block
approval of any drug proved to be
clinically superior to a drug with
currently effective exclusive marketing
rights.

16. One comment noted a disparity
between: (1) FDA's firmness in requiring
comparative clinical trials to
demonstrate grester efficacy, and (2)
FDA’s stated intent to enforce such a
requirement only “in some cases” to
demonstrate safety,

FDA agrees that reliable information
on safety differences may require
comparative trials, Valid safety
information may, however, come from
other sources as well; the agency
believes that the requirements for
approving a because it is safer than
an approved orphan drug may not
always need to include the conduct of
comparative clinical trials.

17, Two comments questioned why
FDA treats micromolecular drugs and
macromolecular drugs differently.

As discussed in comment 10, and in
detail in the NPRM, FDA does not
believe that the concept of active
moiety, which has been useful when
applied to micromolecular drugs, is
adequate to deal with the different
situation that obtains with
macromolecular drugs. .

18. Two comments chellenged the use
of the concept of clinical superiority,
contending that the criteria for
demonstrating it are insufficiently clear.
Also, the comments noted that, to a sick
patient, removing even a minor adverse
reaction can result in clinical
superiority.

FDA agrees that a small demonstrated
improvement in efficacy or diminution
in adverse reactions may be sufficient to
allow a finding of clinical superiority.
Despite the agency's inability to deftne
“clinical superiority” as precisely as
some would like, the agency believes
that it is a useful concept.

FDA also believes that it constitutes
the best tool for giving effect to the
intent of Congress to provide incentives
for potential sponsors to develop safer
and more effective orphan drugs.

19, A comment suggested that, as
proof of clinical superiority, FDA
should always require a demonstration
of it in rigorous double-blind, head-to-
head comparative clinical trials such as
those required to support other
comparative safety and efficacy claims.
Such studies, according to the comment,
should be done using the licensed

roduct and the subsequent product
formulated with the same biologically
active units and the same excipients.

While randomized double-blind,
concurrently controlled clinical trials
are usually the most reliable sources of
evidence, other kinds of studies can be
considered adequate and well-
controlled studies within the meaning
of (21 CFR 314.126) to support a finding
of clinical superiority. This final rule
should not preclude that possibility
even if concurrently controlled trials
will usually be needed. As stated, the
kinds of data needed to demonstrate
clinical superiority for purposes of the
Orphan Drug Act will be the same as the
kinds of data required to allow label
claims of superiority.

20, Two comments suggested that, for
drugs indicated for acquired
immunodeficiency syndrome (AIDS)
and other similar serious diseases, a
lower does with little or no loss of
effectiveness should qualify the drug as
clinically superior. .

FDA believes that a lower dose per se,
without diminution of side effects or
enhanced patient convenience should
not constitute clinical superiority for
purposes of this rule.

21, One comment argued that a
subsequent drug should not be

approved unless the subsequent drug is _

shown to be both “materially different”
and clinically superior. Specifically, the
comment stated,
the active sites of a protein drug should
not be considered different from the
protein drug.

FDA advises that, tinder “criterion 3,”
which states that ‘two drugs would be
considered the same drug if the
principal, but not necessarily ail,
structural features of the two drugs were
the same, unless the subsequent drug
were shown to be clinically superior”
(NPRM, section ILE, (56 FR 3341
through 3342)), which the agency is
adopting, either differences in active
moiety or clinical superiority will be
sufficient to make two micromolecular
drugs different. With regard to
‘macromolecular drugs, clinical
superiority by itself will render a

HeinOnline -- 57 Fed. Reg. 62078 1992

ptides which mimic .

subsequent drug different. However,
even if clinical superiority cannot be
proven, macromoleculer drugs may be
different because of major differences in
molecular structure apart from post-
translational events. In other words,
FDA believes that there are certain
major differences in the chemical
composition of drugs that make them

different for ses of the Orphan
Drug Act regardless of whether they
produce different clinical responses.

As to tle peptide example, in order
for a peptide at resembles a portion of
8 protein product to be considered a
different drug, FDA will require a clear
demonstration that the peptide is
clinically superior to the entire protein.

22, One comment suggested that the
final rule must state how much
superiority would represent a major
contribution to patient care.

There is no way to quantify such
superiority in a general way. The
amount and kind of superiority needed
would vary depending on many factors,
including the nature and severity of the
disease or condition, the gpality of the
evidence presented, and diverse other
factors.

23, Another comment argued that the
concept of clinical superiority is neither
supported by the act nor appropriately
defined, Further, the comment argu
that direct comparative clinical trials
usually needed to demonstrate clinical
superiority would be difficult because
subjects would be scarce, the time to
perform the trials would exceed the
period of exclusive marketing, and the
cost would be prohibitive.

Congress left it to FDA to define
“such drug” as used in 21 U.S.C. 360cc
and provided no guidance on the
meaning of this term. Thus, it is within
FDA’s authority to define what is the
“same” and what is a “different” drug.
“Clinical superiority” is a rational and
pormissible means of making this
distinction. FDA understands the
difficulties inherent in proving clinical
superiority but believes the requirement
is necessary in order to protect the value
of the primary incentive that Congress
created in the Orphan Drug Act. If FDA
allows exclusive marketing rights to be
eliminated without evidence of clinical
superiority or based on shoddy
evidence, the incentive will be
worthless.

24, Several comments argued that
FDA must recognize the effect of price
‘on access to patient care and urged that
cost considerations must be used in
determining whether a subsequent drug
makes @ major contribution to patient
care. On the other hand, several other
comments stated that cost should not be
a factor in decisions about whether a



Federal Register / Vol. 57, No. 250 / Tuesday, December 29, 1992 / Rules and Regulations 62077

the complexity of information to be
considered. 5

5, Some comments argued that the
proposed regulations go too far in
protecting exclusive marketing rights,
while other comments argued that they
do not go far enough.

On the whole, based on the legislative
history of the Orphan Drug Act and
FDA's understanding of its purposes,
the agency came to its conclusions by
seeking as much as possible to protect
the incentives of the Orphan Drug Act
without allowing their abuse. FDA
believes the final rule achieves the best
balance possible between protecting
exclusive marketing rights and fostering
competition.

B. Sameness Versus Difference

6. One comment suggested that
proposed § 316.3(b)(3)(ii) be amended to
include a reference to “severe” adverse
reactions in addition to “frequent”
adverse reactions. Another comment

suggested substituting the word
“meaningful” for “‘substantial” in the
same paragraph and substituting the

phrase, “clinically significant adverse
effects” for “relatively frequent effects.”

FDA has carefully considered the
suggested changes and concludes that it
will not amend the final rule as
requested because the proposed changes
would not add to the clarity of the
regulation. The use of the words,
“frequent,” “meaningful,” and
“relatively frequent adverse effects” are
intended as examples of considerations
that might be relevant in determining
clinical superiority and are not intended
as the only routes to demonstrating
greater safety of a drug. FDA's decision
not to use the suggested words and
phrases does not mean that FDA would
not consider less severe adverse
reactions in a meaningful portion of the
target population or a diminution of
clinically significant adverse effects as
being evidence of greater safety.

7, One comment Pointed out that
§ 316.3(b)(13)(i) and (b)(13)(ii) should

oth use the phrase, “intended for the
same use,” which was used in proposed
§ 316.3(b)(13)(i) but was omitted from
paragraph (b)(13)({i).

FDA agrees, and the phrase,
“intended for the same use,” which was
inadvertently omitted, has been added
to § 316.3(b)(13)(4i).

8, Another comment stated that
§ 316.3(b)(3){i) refers to “the same kind
of evidence to support a comparative
effectiveness claim for two different
drugs.” The comment asked that FDA
make clear that the standard in the
NPRM will be consistent with FDA's
prescription drug advertising standard,

“course, it deserves, and under

which requires a showing of clinical
significance of the claim.

A believes that it is more accurate
to draw a comparison between the
clinical superiority standard in this rule
with FDA’s standards for use of such
claims in prescription drug labeling
found in 21 CFR 201.57(c)(3)(v) (as
distinguished from drug standards for
advertising),

9. Several comments asked that
examples be provided and the
difference between “minor” and
“major” convenience be clarified as
stated in the NPRM preamble statement
(section ILE. (56 FR 3341 at 3343)) “This
third basis for finding a subsequent drug
to be clinically superior is intended to
constitute a narrow category, and its
proposed use is not intended to open
the flood gates to FDA approval for
every drug for which a minor
convenience over and above that
attributed to an already approved
orphan drug can be demonstrated.”

A does not believe that it can
anticipate all or even most possible
bases for categorizing some
contributions as major and others as
minor, Each will vary with the facts.
Hence, examples could be as misleading
as they could be helpful.

~ 10. Another comment proposed that
the concept of “active moiety” be
applied to macromolecular products as
wal as to micromolecular products and
that differences in active moieties by
themselves be used as the sole criterion
for establishing product differences.

FDA disagrees, because it does not
believe that the concept of active
moiety, as used for small molecules, is
useful for macromolecular entities. For
micromolecular products, the active
moiety is the whole covalently bound
part of the molecule that is active, This
means that it generally consists of all of
the molecule except added parts that
make it a salt or ester, Essentially, any
change in covalent structure creates 4
new active moiety whose properties
may well differ from the old active.
moiety. With macromolecules, it would
be trivially easy to make minor covalent
changes that would leave the activity of
the drug unaltered, but would create a
“different drug” if the micromolecular
definition of active moiety were to be
used. This would render exclusive
marketing of macromolecular drugs
meaningless and would decrease
incentives to develop orphan drugs.
When such a change is meaningful, of
e rule
would gain, exclusive marketing.

11. A comment suggested that FDA
should assume that macromolecular
drugs made by different manufacturers
are by definition different.

HeinOnline -- 57 Fed. Reg. 62077 1992

FDA strongly disagrees, because this
would result in a de facto exclusion of
all biological products from eligibility
for exclusive marketing rights, the major
incentive of the Orphan Act.
Regardless of how similar they were to
each other, each sponsor's drug would
be entitled to exclusive marketing, or,
put another way, would not be kept
from marketing by the exclusive
marketing status of the prior drug,
rendering such status meaningless for
these drugs. Because macromolecules,
and particularly recombinant products,
offer great promise for the diagnosis and
treatment of rare diseases and
conditions, and because FDA does not
believe that Congress intended to
eliminate them from the operation of the
Orphan Drug Act's exclusive marketing
incentive, FDA will not consider every
drug manufactured by a different
manufacturer to be different for
purposes of the act. This matter was
fully discussed in the preamble to the
NPRM (56 FR 3341 through 3343)

12. Another comment suggested that
the rule should define the term,
“arbitrary,” (a3 used in the NPRM,
section I1.B (56 FR 3339)) and provide
examples for greater ease in determinin;
what is “salami slicing” or artificial an
medically implausible subsets.

FDA believes that the term “arbitrary”
needs no further explanation. The
NPRM by implication defines the term
“arbitrary” as “medically implausible.”
Setting forth examples could mislead as
easily as it could assist because eval
FDA decision on arbitrariness would
necessarily be highly fact dependent.

13, A comment proposed that:

+ © * closely related, complex partly

. definable drugs with similar therapeutic

intent be considered the same if they are
derived from the same source and
manufactured by a similar process, such as
two live viral vaccines for the same
indication, would be considered the same
drug unless the subsequent drug were shown:
to possess different quantitive in vitro
biologic activity or to be clinically superior.

FDA disagrees, Whereas a difference
in in vitro quantitative biologic activity
may constitute part of the evidence
needed to support a claim of clinical
superiority, it will not normally suffice
for that purpose. Because such
differences do not all correlate with
clinical superiority, if no such
correlation is independently proven
with respect to an orphan drug, no
mesningful difference for purposes of
the Orphan Drug Act will have been
shown. Ih addition, FDA seoe no ph
significance for purposes of the an
Drug Act with regard to the source from
which the drugs are derived and the
processes by which they are


62088 Federal Register / Vol. 57, No. 250 / Tuesday, December 29, 1992 / Rules and Regulations

development at which advice on any

: clinical investigations, or on particular
investigations would be premature,
FDA’s response may be limited to
written recommendations concerning
only nonclinical laboratory studies, or
only certain of the clinical studies (e.g.,
Phase 1 studies as described in § 312.21
of this chapter). Prior to providing
written recommendations for the
clinical investigations required to
achieve marketing spprovel, FDA may
require that the results of the
nonclinical laboratory studies or
completed early clinical studies be
submitted to FDA for agency review.

$316.14 Refusal to provide written
Tecommendations. :

(a) FDA may refuse to provide written
recommendations concerning the
nonclinical laboratory studies and
clinical investigations n¢ for
approval of a marketing application for
any of the following reasons:

ti) The information red to be
submitted by § 316.10(b) has not been.
submitted, or the information submitted
is incomplete.

(2) There is insufficient information

about:

{i) The drug to identify the active
moiety and its physical and chemical
properties, if these characteristics can be
determined; or

(ii) The disease or condition to
determine that the disease or condition
is rare in the United States; or

(iii) The reasons for believing that the
drug may be useful for treating the rare
disease or condition with that drug; or

(iv) The regulatory and marketing
history of the drug to determine the
scope and type of investigations that
have already been conducted on the
drug for the rare disease or condition; or

{v) The plan of study for establishing
the safety and effectiveness of the drug
for treatment of the rare disease or
condition,

(3) The specific questions for which .
the sponsor seeks the advice of the
agency are unclear or are not ~
sufficiently specific,

(4) On the basis of the information
submitted and on other informetion
available to the agency, FDA determines
that the disease or condition for which
the drug is intended is not rare in the
United States.

(5) On the basis of the information
submitted and on other information
available to the agency, FDA determines
that there is an inadequate basis for
permitting investigational use of the

ig under part 312 of this chapter for
the rare disease or condition.

(6) The request for information
contains an untrue statement of material

fact.

(b) A refusal to provide written
recommendations will be in writing and
will include a statement of the reason
for FDA’s refusal. Where practicable,
FDA will describe the information or
material it requires or the conditions the
sponsor must meet for FDA to provide
recommendations. __

(c) Within 90 days after the date of a
letter from FDA requesting additional
information or material or setting forth
the conditions that the 5) is asked
to meet, the sponsor shall either:

(1) Provide the information or
material or amend the request for
written recommendations to meet the
conditions sought by FDA; or

(2) Withdraw the request for written
recommendations. FDA will consider a
sponsor's failure to respond within 90

lays to an FDA letter requesting
information or material or setting forth
conditions to be met to be a withdrawal
of the request for written
recommendations.

Subpart C—Designation of an Orphan
Drug

$316.20 Content and format of a request
for designation.

(a) A sponsor that submits a request
for orphan-drug designation of a drug
for a specified rare disease or condition
shall submit each request in the form
and containing the information required
in paragraph (b) of this section. A

onsor may request orphan-drug

lesignation of a previously unapproved
drug, or of a new orphan indication for
an already marketed drug. In addition,
a sponsor of a drug that is otherwise the
same drug as an already Spproved
orphan drug may seek and obtain
orphan-drug designation for the
subsequent drug for the same rare
disease or condition ifit can present a
plausible hypothesis that its drug may
be clinically superior to the first drug.
More than one sponsor may receive
orphan-drug designation of the same
drug for the same rare disease or
condition, but each sponsor seeking
orphan-drug designation must file a
complete request for designation as
provided in paragraph (b) of this
section.

(b) A sponsor shall submit two copies
of a completed, dated, and signed

est for designation that contains the
following:

(1) A statement that the sponsor
requests orphan-drug designation fora
rare disease or condition, which shall be
identified. with specificity.

(2) The name and address ofthe»

~sponsor; the name of the sponsor's

primary contact person and/or resident
agent including title, address, and

HeinOnline -- 57 Fed. Reg. 62088 1992

telephone number; the generic and trade
name, if any, of the drug or drug
product; and the name and address of
the source of the drug if it is not
manufactured by the sponsor.

(3) A description of the rare disease or
condition for which the drug is being or
will be investigated, the proposed
indication or indications for use of the
drug, and the reasons why such therapy
is needed.

(4) A description of the drug and a
discussion of the scientific rationale for
the use of the drug for the rare disease
or condition, including all data from
nonclinical laboratory studies, clinical
investigations, and other relevant data
that are available to the sponsor,
whether positive, negative, or
inconclusive. Copies of pertinent
unpublished and publis papers are

also required

(5) Where the sponsor of a drug that
is otherwise the same drug as an
already-approved orphan drug seeks
orphan-drug, designation for the
subsequent drug for the same rare
disease or condition, an explanation of
why the proposed variation may be
clinically superior to the first drug.

(6) Where a drug is under
development for only a subset of
persons with a particular disease or
condition, a demonstration that the
subset is medically plausible.

(7) A summary of the regulatory status
and marketing history of the drug in the
United States and in foreign countries,
6.g., IND and marketing application
status and dispositions, what uses are
‘under investigation and in what
countries; for what indication is the
drug approved in foreign countries;
what i regulatory actions have
been taken against the drug in any
country.

(8) Documentation, with appended
suthoritative references, to demonstrate

at:

(i) The disease or condition for which
the drug is intended affects fewer than
200,000 people in the United States or,
if the drug is a vaccine, diagnostic drug,
or preventive drug, the persons to whom

the drug will be administered in the

‘United States are fewer than 200,000 per
as specified in § 316.21(b), or

(ii) For a drug intended for diseases or
conditions affecting 200,000 or more
people, or for a vaccine, diagnostic drug,
or preventive drug to be administered to
200,000 or more persons per year in the
United States, there is no reasonable
expectation that costs of research and
development of the drug for the
indication can be recovered by salos of
the drug in the United States as
specified in § 316.21(c).


Federal Register / Vol. 57, No. 250 / Tuesday, December 29, 1992 / Rules and Regulations 62091

(b) The generic name and trade name,
if any, of the drug and the date of the
granting of orphan-drug designation;

(c) The rare disease or condition for
which orphan-drug designation was
granted; and

(d) The proposed indication for use of
the drug, .

§316.29 Revocation of orphan-drug
designation.

(a) FDA may revoke orphan-drug
designation for any drug if the agency
finds that:

(1) The request for designation
contained an untrue statement of
material fact; or

(2) The request for designation
omitted material information required
‘by this part; or

(3) FDA subsequently finds that the
drug in fact had not been eligible for
orphan-drug designation at the time of
submission of the request therefor.

(b) For an approved drug, revocation
of orphan-drug designation also
suspends or withdraws the sponsor’s
exclusive marketing rights for the drug
but not the approval of the drug’s
marketing application.

{c) Where a drug has been designated
as an orphan drug because the
prevalence of a disease or condition (or,
in the case of vaccines, diagnostic drugs,
or preventive drugs, the target
population) is under 200,000 in the
United States at the time of designation,
its designation will not be revoked on
the ground that the prevalence of the
disease or condition (or the target
population) becomes more than 200,000
persons.

$316.30 Annual reports of holder of
orphan-drug designation..

Within 14 months after the date on
which a drug was designated as an
orphan drug and annually thereafter
until marketing approval, the sponsor of
a designated drug shall submit a brief
Progress report to the FDA Office of
Orphan Products Development on the
drug that includes:

(a) A short account of the progress of
drug development including a review of
preclinical and clinical studies initiated,
ongoing, and completed and a short
summary of the status or results of such
studies.

(b) A description of the
investigational plan for the coming year,
as well as any anticipated difficulties in:
development, testing, and marketing;

an

(c) A brief discussion of any changes
that may affect the orphan-drug status of
the product. For example, for products
nearing the end of the approval process,
sponsors should discuss any disparity

between the probable marketing
indication and the designated indication
as related to the need for an amendment
to the orphan-drug designation pursuant
to § 316.26.

Subpart D—Orphan-drug Exclusive
Approval

$316.31 Scope of orphan-drug exclusive
approval.

(a) After approval of a sponsor's
marketing application for a designated
orphan-drug product for treatment of
the rare disease or condition concerning
which orphan-drug designation was
granted, FDA will not approve another
sponsor's marketing application for the
same drug before the expiration of 7
years from the date of such approval as
Stated in the approval letter from FDA,
except that such a marketing application
can be approved sooner if, and such
time as, any of the following occurs:

(1) Withdrawal of exclusive approval
or revocation of orphan-drug
designation by FDA under any
provision of this part; or

(2) Withdrawal for any reason of the
marketing application for the drug in
question; or

(3) Consent by the holder of exclusive
approval to permit another marketing
application to gain approval; or

(4) Failure of the holder of exclusive
approval to assure a sufficient quantity
of the drug under section 527 of the act
and § 316.36.

(b) Ifa sponsor's marketing
application for a drug product is
determined not to be approvable
because approval is barred under
section 527 of the act until the
expiration of the period of exclusive
marketing of another drug product, FDA
will so notify the sponsor in writing.

§316.34 FDA recognition of exclusive
ay iH.

(a) FDA will send the sponsor (or, the
permanent-resident agent, if applicable)
timely written notice recognizin;
exclusive approval once the marketing
application for a designated orphan-
drug product has been approved. The
written notice will inform the sponsor
of the requirements for maintaining
orphan ig exclusive approval for the
full 7-year term of exclusive approval.

(b) When a marketing application is
approved for a designated orplian drug
that qualifies for exclusive approval,
FDA will publish in its publication
entitled “Approved Drug Products with
Therapeutic Equivalence Evaluations”
information identifying the sponsor, the
drug, and the date of termination of the
orphan-drug exclusive approval. A
subscription to this publication and its

HeinOnline -- 57 Fed. Reg. 62091 1992

monthly cumulative supplements is
available from the Superintendent of
Documents, Government Printing
Office, Washington, DC 20402-9325.

§316.36 Insufficient quantities of orphan
drugs.

{a) Under section 527 of the act,
whenever the Director has reason to
believe that the holder of exclusive
approval cannot assure the availability
of sufficient quantities of an orphan
drug to meet the needs of patients with
the disease or condition for which the
drug was designated, the Director will
so notify the holder of this possible
insufficiency and will offer the holder
one of the following options, which
must be exercised by a time that the
Director specifies:

(1) Provide the Director in writing, or
orally, or both, at the Director's
discretion, views and data as to how the
holder can assure the availability of
sufficient quantities of the orphan drug
within a reasonable time to meet the
needs of patients with the disease or
condition for which the drug was
designated; or

(2) Provide the Director in writing the
holder’s consent for the approval of
other marketing applications for the
same drug before the expiration of the
7-year period of exclusive approval.

(b) If, within the time that the Director
specifies, the holder fails to consent to
the approval of other marketing
applications and if the Director finds
that the holder has not shown thet it can
assure the availability of sufficient
quantities of the orphan drug to meet
the needs of patients with the disease or
condition for which the drug was

” designated, the Director will issue a

written order withdrawing the drug
product's exclusive approval. This order
will embody the Director's findings and
conclusions and will constitute final
agency action. An order withdrawing
the sponsor's exclusive marketing rights .
may issue whether or not there are other
‘sponsors that can assure the availability
of alternative sources of supply. Once
withdrawn under this section, exclusive
approval may not be reinstated for that
rug.

‘Subpart E—Open Protocols for
Investigations

§316.40 Treatment use of a designated
orphan drug.

ive investigators seeking to
obtain treatment use of designated
orphan drugs may do so as provided in
§ 312.34 of this chapter.