1.21 – Orphan Drugs and Generics

The term ‘orphan drugs’ refers to drugs that treat rare diseases and conditions, and are considered both therapeutic and commercial orphans because they have too small a patient population to render their development commercially viable. The number of orphan diseases has been estimated to be between 5000 and 8000 with 50 million people affected in the United States and Europe, and untold numbers throughout the rest of the world. Although a number of countries now have orphan drug laws, the United States has led the way for policy initiatives to encourage RD the longer clinical development time due to difficulty in enrolling patients; and the need to depart from traditional clinical study designs. Nonetheless, during the 20-year history of the orphan drug program in the United States alone, close to 250 drugs and biologicals have been approved, and over 1200 investigational compounds are currently designated. This was accomplished by providing ‘push’ incentives that reduce the fixed costs of R&D and ‘pull’ incentives that increase the expectation of profits, by providing monopoly market conditions. Today, the biotechnology industry commands the lion's share of orphan designations while big pharma still dominates approvals, Orphan drug programs have been especially important for biotechnology-derived medicines. With advances in research and sequencing of the human genome, many experts believe that the future of pharmaceuticals lies with pharmacogenomic approaches to research and development. As such, the future for orphan diseases, especially the mechanisms underlying many rare genetic disorders, may be unraveled in the next few years, thus opening the door for the possibility of many new drugs for their treatment. At the same time, increasing globalization of patient advocacy movements and international harmonization of orphan drug regulations may facilitate global registration and work synergistically with global availability and utilization of resources. What this means at the practical level is the orphan product developers here in the United States can begin to plan for the possibility of expansion to global markets. In general, lowering the entry barriers for orphan R&D, protected markets, expanding patient populations, and long duration of use bode well for the future of orphan product development. Generic drugs are identical, or bioequivalent versions of brand-name drugs in terms of intended use, dosage, safety, strength, and quality, which are available after a patent expires. While the modern generic drug market did not begin until the mid-1960s, it has grown to 23% of the total volume globally, and more than half the volume in the United States, where it is considered a valuable cost containment tool. The development of generic drugs was largely fostered worldwide by the Hatch-Waxman Act, which was enacted in 1984 in the United States. The Act largely defined generic drugs as well as the methods by which they should be approved and regulated. While the FDA and EMEA regulate generics in the United States and Europe, outside influences such as Bolar Laws, anticompetitive practices such as evergreening, and public policy have had a large influence on the shape of the market. In lower and middle income countries, generics markets are still evolving from trade agreements such as TRIPS, and the Essential Drugs List published by the World Health Organization. Most recently, issues surrounding generic biotechnology products have come to the forefront of the health debate in the United States and Europe. Generic drugs have been the focus of the quest for greater affordability, but not without equal concern that weakened patent protection could debilitate the financial constructs supporting future innovation. Competition between generic and brand name industries is desirable; however, creating the correct environment to ensure that one market does not dominate and destroy the other is a complex but necessary process.