Drug manufacturers seeking to develop and receive approval to market an orphan drug go through two separate FDA processes. The drug manufacturer may first apply for orphan designation, where FDA determines if the drug is eligible and meets the criteria for designation. The manufacturer may then apply to FDA for approval to market the orphan drug. There are a variety of circumstances under which a manufacturer’s drug is eligible for orphan designation. A drug is eligible for orphan designation when it is intended to treat a disease that affects fewer than 200,000 people in the United States. A drug is also eligible for orphan designation when it is intended to treat a disease that affects 200,000 or more people in the United States and there is no reasonable expectation of recovering the cost of drug development and marketing from U.S. sales. In addition, a drug that is intended to treat a specific population of a non-rare disease (known as an orphan subset) is eligible for orphan designation when a property of the drug (e.g., toxicity profile, mechanism of action, or prior clinical experience) limits its use to this subset of the population. FDA’s Office of Orphan Products Development (OOPD) administers the orphan drug program and evaluates orphan designation applications. When a drug manufacturer submits a designation application, OOPD receives and assigns it to a reviewer based on factors such as prior experience related to a particular rare disease and workload across OOPD reviewers. The drug manufacturer’s application is required to include such items as a description of the rare disease, documentation of the number of people affected by the disease in the United States (the population estimate), and a scientific rationale explaining why the drug may effectively treat the disease. The manufacturer can submit an orphan designation application at any point prior to submitting a marketing application. When making an orphan designation decision, OOPD guidance requires reviewers to evaluate the manufacturer’s application and record information about the drug and disease on a standard review template. OOPD reviewers are also expected to independently verify certain information included in the application. For example, OOPD reviewers may review independent sources to verify the population estimate provided by the manufacturer, including comparing the population estimate against prior related orphan designations. Once the OOPD reviewer’s decision is recorded on the standard review template, it undergoes a secondary review that has typically been completed by the Director of the Orphan Drug Designation Program. This secondary review is intended to ensure the quality of the application review and the consistency of the review across all related designation applications. There are three possible outcomes from the designation review: (1) the orphan designation is granted, (2) the application is pending with the manufacturer due to OOPD finding it deficient, or (3) the orphan designation is denied. OOPD sends the drug manufacturer a decision letter detailing the outcome of its review. If the application is pending or denied, the decision letter describes OOPD’s concerns with granting the orphan designation (e.g., insufficient evidence to support its scientific rationale) and the manufacturer may address these concerns either in an amendment to the original application (for pending status) or as a new application (for denied status). (See fig. 1.) FDA’s marketing approval process is the same for all drugs, regardless of orphan status. (See fig. 2.) Once a manufacturer has assessed the safety and efficacy of a new drug through preclinical testing and clinical trials, it may apply to FDA for approval to market the drug in the United States. To do so, a drug manufacturer submits its research in a new drug application (NDA) or biologic license application (BLA) to FDA, which then reviews and approves the drug for marketing if it is shown to be safe and effective for its intended use. The two FDA centers responsible for reviewing applications to market drugs in the United States are the Center for Biologics Evaluation and Research (CBER) and the Center for Drug Evaluation and Research (CDER). Upon completing its review of a marketing application, FDA will send an action letter with its determination to the drug manufacturer. The time elapsed from the date FDA receives the application to the date it issues an action letter informing the drug manufacturer of the agency’s decision is defined as one review cycle. If FDA does not approve the marketing application and the drug manufacturer resubmits the application, a new review cycle begins. When FDA approves a drug manufacturer’s marketing application, it approves the drug to treat one or more specific uses, known as indications. The approved indication is based on the clinical trial data provided in the manufacturer’s marketing application and is typically narrower than the orphan designation, which is based on early drug development data for the drug’s intended use in the rare disease. For example, one drug was granted orphan designation for the treatment of cystic fibrosis (the rare disease), while the drug’s marketing approval was for the treatment of cystic fibrosis in patients 12 years and older who have a certain genetic mutation (the indication). The orphan drug marketing exclusivity incentive (a period of protection from competition) only applies to the drug’s approved indication. OOPD determines orphan drug marketing exclusivity after receiving notification of the drug’s marketing approval from CBER and CDER. Because orphan drugs are often developed to treat patients with unmet medical needs, they may be eligible for one or more of FDA’s expedited programs. FDA’s four expedited programs—accelerated approval, breakthrough therapy designation, fast track designation, and priority review—are intended to facilitate and expedite the development and review of new drugs to address unmet medical needs in the treatment of a serious disease. Depending on the type of expedited program, manufacturers of new drugs may receive a variety of benefits, such as additional opportunities to meet with and obtain advice from FDA officials during drug development or a shorter FDA review time goal for the marketing application. In June 2017, FDA issued its Orphan Drug Modernization Plan and has implemented a number of steps under the plan to address the demand for orphan designations. According to OOPD data, the number of new designation applications received grew from 185 in 2008 to 527 in 2017 (an increase of 185 percent), while the number of designations granted also grew during the same period. (See fig. 3.) Prior to implementing the modernization plan, OOPD had amassed a backlog of 138 applications that were pending review for more than 120 days. The modernization plan therefore established two goals: (1) eliminating the backlog of designation applications within 90 days (by September 25, 2017), and (2) ensuring that new designation applications are reviewed within 90 days of receipt. To accomplish its first goal, the modernization plan outlined seven actions FDA planned to take to temporarily increase OOPD resources for reviewing designation applications. For example, the agency established an experienced team of senior OOPD reviewers to focus solely on the backlog of designation applications. In addition, OOPD initially enlisted temporary assistance from CBER and CDER reviewers who expressed interest in helping clear the backlog. FDA officials told us OOPD also subsequently received reviewer assistance from the Office of Medical Products and Tobacco. OOPD trained these additional reviewers on the orphan designation review process and criteria for granting orphan status. As a result of these efforts, FDA cleared the application backlog by August 28, 2017, nearly a month ahead of its goal. (See table 1 for the seven actions FDA took as part of its modernization plan to clear the designation application backlog.) To accomplish FDA’s second goal of reviewing new designation applications within 90 days of receipt, the modernization plan outlined eight steps the agency planned to take to improve the efficiency of its application review process. For example, OOPD implemented a standard review template in October 2017 that it had developed under the modernization plan’s first goal to address the backlog of applications. This template outlines information that reviewers are supposed to record, as applicable, from each application and evaluate when making a designation decision—namely, the (1) background information, (2) clinical superiority analysis, (3) orphan subset analysis, (4) population estimate, and (5) scientific rationale that the drug may effectively treat the disease. (See app. I for more information about what is recorded in OOPD’s review template.) The review template also includes the designation recommendation, as well as the secondary reviewer’s concurrence with the designation determination. FDA officials reported that before implementing this review template, OOPD reviewers documented less-structured narrative information about each application on a prior form. In addition, OOPD introduced online training for manufacturers on the information to include in a designation application and the common issues OOPD has encountered when reviewing an application. According to officials, this training is intended to enhance the consistency and quality of designation applications, which may ultimately reduce OOPD requests for additional information from manufacturers. (See table 2 for the eight steps the agency took to improve the timeliness of its designation application review process.) In July 2017, OOPD began using the new internal tracking report to monitor adherence to its 90-day timeliness goal. As of March 2018, FDA officials reported that OOPD management has received these tracking reports on a daily basis, which identify the number of days that have elapsed for each application pending review, among other things. According to these tracking reports, OOPD has overall met its 90-day timeliness goal for reviewing designation applications since mid- September 2017 and has completed most application reviews within 60 days of receipt. For example, as of July 20, 2018, OOPD had 35 applications pending review for 0 to 30 days; 31 applications pending review for 31 to 60 days; 9 applications pending review for 61 to 90 days; and no applications pending review for more than 90 days. OOPD applies two consistent criteria (i.e., two particular criteria that all designation applications must meet) when determining whether to grant a drug orphan status: (1) the disease that the drug is intended to treat affects fewer than 200,000 people in the United States, and (2) there is adequate scientific rationale that the drug may effectively treat the disease. For circumstances involving orphan subsets of a non-rare disease or clinical superiority, additional criteria are required for orphan designation. According to OOPD data, of the 3,690 orphan designation applications received from 2008 to 2017, OOPD determined that the majority of them met these criteria and granted them orphan status. Specifically, approximately 71 percent of applications were granted orphan designation as of April 2018. The remaining designation applications were placed in a pending status awaiting the manufacturer’s response to OOPD concerns (21 percent), denied orphan designation (5 percent), or withdrawn (2 percent). (See table 3.) In addition, our analysis of 148 OOPD review templates completed for new designation applications received from October to December 2017 provided further detail on OOPD’s designation determinations since implementing its Orphan Drug Modernization Plan. We found that for this time period, 87 designation applications (59 percent) were granted orphan status, 57 designation applications (39 percent) were placed in pending status awaiting further information from the manufacturer, and 4 designation applications (3 percent) were denied orphan status. The most common reason OOPD did not grant orphan designation was due to concerns with the adequacy of the manufacturer’s scientific rationale, which occurred in 43 of the 61 pending or denied review templates. OOPD reviewers noted various concerns with the scientific rationale provided in these designation applications, including that the manufacturer did not provide sufficient or adequate data to support their scientific rationale, or that the manufacturer did not provide data from the strongest available model for testing the drug. Of the five review template sections where reviewers are required to record information, we found that OOPD does not ensure that all required information is consistently recorded in the background information section and evaluated when making designation decisions. OOPD instructs reviewers to document background information, including elements of the regulatory history of the drug (e.g., U.S. and foreign marketing history), and previous orphan designations for both the drug and the disease. Our analysis found that 102 of 148 OOPD review templates were missing one or more elements of the regulatory history of a drug. (See table 4.) In addition, we found that 19 of 148 review templates did not capture all prior orphan designations for the drug and disease. In one case, the OOPD reviewer did not record any prior orphan designation for the disease in the review template and placed the designation application in pending status due to concerns with the manufacturer’s population estimate. However, the disease that was the subject of the application had 36 related orphan designations at the time of the review, 7 of which had been granted in 2017. According to FDA officials, although the background information required in the review template may not directly affect a designation decision, it provides important context that is critical to ensuring a complete review of a designation application. For example, FDA officials told us that in cases where the designation application is for a disease with little published information available, it may help to know the drug’s U.S. marketing history to identify whether CBER or CDER has experience with the disease. Additionally, the prior orphan designation history can help the OOPD reviewer identify previously accepted methodologies to estimate the population for a disease. Despite requiring its reviewers to record background information for each designation application, OOPD’s guidance does not provide instructions on how to use this information when evaluating the applications. Internal control standards for the federal government specify that agencies should record relevant, reliable, and timely information, and process that information into quality data that enables staff to carry out their responsibilities. Without instructions on how to use the background information required in its review templates, OOPD reviewers may not consistently use all of the information needed to conduct a complete evaluation of a designation application. Additionally, OOPD instructs its reviewers to consider evidence found in independent sources to verify the population estimate provided in a designation application. However, in 23 of 148 OOPD review templates, reviewers did not include the results of any such independent verification in their evaluation of the manufacturer’s population estimate. Internal control standards state that agencies should conduct checks of their recorded data to ensure its accuracy and completeness, but we found that OOPD does not fully conduct such data checks. Without ensuring that its reviewers conduct and record the results of independent verification of population estimates, OOPD cannot be assured that quality information is consistently informing its designation determinations. For the 148 templates we reviewed, we found that OOPD granted orphan designation to 26 applications missing required information. Specifically, we found that OOPD granted designation to 11 applications where the reviewer did not record prior orphan designation history, to 13 applications where the reviewer did not document independent verification of the manufacturer’s population estimate, and to 2 applications where the reviewer did neither. In cases where the background information was incomplete or there was no documentation of independent verification of the manufacturer’s population estimate, there also was no evidence that the secondary reviewer verified the completeness of these sections of the review templates. Approximately 71 percent of orphan designation applications received by FDA from 2008 to 2017 were for drugs intended to treat diseases affecting 100,000 or fewer people. In addition, half of the applications received during this time frame were for drugs intended to treat populations of 50,000 or fewer people. (See fig. 4.) For applications that OOPD granted orphan designation, the population estimates for the diseases they were intended to treat ranged from 0 to 199,966 people. Of 3,491 orphan designation applications OOPD received from 2008 to 2017, over half were for the therapeutic areas of oncology (30 percent), neurology (13 percent), hematology (7 percent), and gastroenterology and liver (6 percent). Thirty-seven other therapeutic areas accounted for the remaining 44 percent of applications, with each therapeutic area accounting for 5 percent or fewer of designation applications received during this time frame. Some of these other therapeutic areas included pulmonary, immunology, cardiology, and dermatology. (See fig. 5.) Additionally, our analysis of 148 OOPD review templates from October to December 2017 found that 29 applications (20 percent) requested orphan status based on an orphan subset claim, 7 of which were granted orphan designation; and 7 applications (5 percent) requested orphan status based on a clinical superiority claim, 2 of which were granted orphan designation. FDA approved 351 orphan drugs for marketing from 2008 to 2017. Orphan drug marketing approvals have increased over this period, from 17 in 2008 to 77 in 2017, and have accounted for an increasing proportion of all FDA marketing approvals. Orphan drug marketing approvals also vary by certain characteristics, but were typically in one of two therapeutic areas and required about 9 months for FDA review, among other commonalities. Therapeutic area. From 2008 to 2017, 53.3 percent of orphan drug marketing approvals were in one of two therapeutic areas that were also common for granted designations: oncology (42.5 percent) and hematology (10.8 percent). There were 27 different therapeutic areas overall, with 7 of those areas having 10 or more approved orphan drugs. (See app. II for FDA’s orphan drug marketing approvals from 2008 to 2017 by therapeutic area.) Number of indications. Of the 351 orphan drug marketing approvals from 2008 to 2017, there were 252 unique drugs, because drugs can be approved for more than one orphan indication. For example, the oncology drug Velcade received FDA approval in 2008 as a first-line therapy for multiple myeloma, and received approval for a second indication in 2014 for treatment of mantle cell lymphoma if the patient has not received at least one prior therapy. (See app. II.) The majority of drugs had one orphan indication (77.4 percent) or two orphan indications (15.9 percent). However, several drugs (6.7 percent) were approved to treat three or more orphan indications. Two oncology drugs had the most approved orphan indications: Imbruvica (10 orphan indications) and Avastin (9 orphan indications). New drug or new indication for previously approved drug. The majority (61.5 percent) of orphan drug marketing approvals from 2008 to 2017 have been for a new drug not previously approved for any use, while the remainder (38.5 percent) have been for a new indication for a drug previously approved to treat a rare or non-rare disease. (See fig. 6.) Of the new orphan drugs that received marketing approval, the majority have been for novel uses—new molecular entities or new therapeutic biologics that are often innovative and serve previously unmet medical needs, or otherwise significantly help to advance patient care and public health. FDA review time. For orphan drug marketing approvals from 2008 to 2017, the median time from FDA receiving a marketing application to approval was about 9 months, and ranged from 75 days to about 17 years. FDA averaged about 1.2 review cycles for these drugs, with the number of cycles ranging from one to four reviews. Two neurology drugs each had the largest number of reviews (four). Expedited programs. Approximately 71 percent of orphan drug marketing approvals from 2008 to 2017 benefitted from at least one type of FDA’s four primary expedited programs (accelerated approval, breakthrough therapy designation, fast track designation, or priority review). Most orphan drug approvals in each year received priority review, while less than half received accelerated approval, breakthrough therapy designation, or fast track designation in the year the drug was approved. (See fig. 7.) Very few (six) orphan drug approvals were granted all four of these expedited programs in the year approved. To address rare disease drug development challenges, FDA has established guidance for internal and public use, and offered training to its reviewers. FDA’s guidance and training on rare diseases includes topics related to more general drug development issues, as well as the agency’s marketing approval process as it applies to orphan drugs. In general, FDA’s review centers—CBER and CDER—are responsible for establishing guidance on general rare disease drug development issues. For example, FDA published draft guidance for industry in August 2015 on common issues in rare disease drug development. The guidance discusses important aspects of drug development, such as the need for an adequate understanding of the natural history of the disease and the drug’s proposed mechanism of action, and the standard of evidence to establish safety and effectiveness. CBER published additional draft guidance in July 2018 on rare disease drug development specific to gene therapy in order to help manufacturers consider issues such as limited study population size, safety issues, and outcomes. FDA has also conducted studies to understand rare disease drug development challenges. In March 2011, FDA issued a report to Congress on the strengths and weaknesses of its regulatory process with respect to rare and neglected tropical diseases. In that report, a group of expert FDA officials found that its regulations allowed experienced reviewers to use flexibility and scientific judgment in determining the safety and efficacy of rare disease drugs. However, the group also noted areas for improvement, such as the need to develop training for FDA reviewers and to increase communication efforts with stakeholders, including industry and advocacy organizations. One other key area the group identified was the need to analyze the agency’s orphan drug marketing approvals to further understand the factors helping or hindering drug development. To do so, FDA analyzed a subset of orphan drug approvals and published two studies: FDA’s February 2012 publication on rare disease drug approvals between 2006 and 2011 found that substantial proportions of marketing approvals were for innovative drugs, and most clinical studies were highly unique in terms of the study design, controls, and outcome measures used. FDA concluded that developing defined policy and consistency around such diverse drugs and unique clinical studies would be difficult. FDA’s May 2012 publication on marketing applications between 2006 and 2010 concluded that, due to the high approval rates for applications targeting rare diseases in its study, increased efforts in the agency’s review process would be unlikely to substantially increase the number of new rare disease drugs. FDA’s patient engagement programs have also focused on rare disease drug development. As of February 2016, the agency reported that nearly half of patient-focused drug development meetings—meetings to obtain the patient perspective on specific diseases and their treatments—have been focused on rare diseases. In addition, four of six patient advocacy groups we interviewed said that they used this type of meeting or another structured meeting to provide FDA input on their rare disease. One patient advocacy group told us that its meeting with FDA helped lead to issued guidance on drug development for Duchenne muscular dystrophy. As part of its efforts to better inform reviewers about the agency’s regulatory framework and drug development challenges with respect to rare diseases, FDA has developed a training course and holds an annual all-day meeting for reviewers. (See table 5.) In its rare disease training course, FDA describes its authority to be flexible in reviewing marketing applications for rare disease drugs. Multiple studies found that FDA has regularly used this flexibility in approving rare disease therapies; for example, by allowing marketing approval based on one adequate and well-controlled study, rather than requiring two. Stakeholders we interviewed, including industry experts and patient advocacy groups, and research we reviewed identified general rare disease drug development challenges, as well as more specific concerns pertaining to the ODA incentives and pricing. However, opinions of some of the concerns attributed to the ODA incentives varied among stakeholders. Barriers to rare disease drug development. The two barriers to rare disease drug development most commonly cited among stakeholders we interviewed were (1) the need for more basic scientific research (e.g., understanding patient experiences and progression of symptoms, known as a disease’s natural history), and (2) the difficulty in recruiting small populations for clinical trials. One drug manufacturer explained that, when a disease affects a small population, it is hard to identify and recruit participants, because they may be geographically dispersed or have to travel long distances to participate in the trial. Identifying these participants and enrolling them into a clinical trial is therefore both labor- and resource-intensive. A number of studies conducted by FDA and others identified similar challenges, as well as other rare disease drug development issues. For example, a 2010 study by the National Academies of Science, Engineering, and Medicine noted that researchers still lack a basic understanding of the mechanisms that underlie many rare diseases. Another drug development challenge identified in the study is attracting trained investigators to study rare diseases. To address some of these challenges, OOPD has a number of grant programs focused on rare disease drug development, including one that funds studies that track the natural history of a disease over time to identify demographic, genetic, environmental, and other variables that may lead to drug development. In addition, FDA’s fiscal year 2019 budget justification includes a request for funds to develop clinical trial networks to create an understanding of the natural history and clinical outcomes of rare diseases. Significance of ODA incentives in fostering drug development. Although many stakeholders we spoke with categorized the ODA’s incentives as significant to rare disease drug development, two stakeholder groups we spoke with—industry experts and drug manufacturers—largely categorized the incentives as less important than did other stakeholders. For example, two of four drug manufacturers we interviewed told us that their company’s drug development decisions are based on the disease areas it wants to target and not due to ODA incentives. In addition, several stakeholders noted non-ODA drivers of orphan drug growth, including the ability to command high prices and advances in scientific discovery for some rare diseases. Several studies also noted limitations of the ODA incentives, including the structure of the orphan drug tax credit, the decreasing impact of the marketing exclusivity incentive in protecting orphan drugs from competition, and the ability of the incentives to target “truly” rare conditions that would not otherwise have obtained sufficient investment. For example, the Congressional Research Service reported in December 2016 that the benefits of the orphan drug tax credit are limited to companies with positive tax liabilities. As a result, the Congressional Research Service concluded that the typical small startup company investing in the development of an orphan drug may be unable to take advantage of the tax credit during its first few years of operation when its expenses exceed its revenue and cash flow may be a problem. Certain circumstances under which drug manufacturers may obtain ODA incentives. Several stakeholders we spoke with were critical of how drug manufacturers may obtain ODA incentives, such as for drugs that were already approved to treat another disease or for multiple orphan designations for the same drug. For example, one industry expert argued that granting multiple orphan designations for the same drug subverts the purpose of the ODA to support development of drugs that may not otherwise be profitable, as a drug manufacturer can make a return on investment from the drug from multiple patient groups rather than just one. In contrast, many patient advocacy groups we spoke with noted that drug manufacturers’ ability to obtain ODA incentives under certain circumstances, such as multiple orphan designations for the same drug, are needed for further investment in drug development. In particular, they noted that this provides an incentive for manufacturers to demonstrate their drugs are safe and effective for individuals who have a rare disease (particularly for FDA-approved drugs with an unapproved use—known as off-label use) and account for any differences within rare diseases. A number of studies raised similar concerns about these and other issues, including off-label use of orphan drugs. Specifically, one study noted that, due to increasing investment in precision medicine, manufacturers may develop drugs treating a particular genetic subset of a non-rare disease. These subsets may qualify for ODA incentives, even though they may not face the same development challenges as “true” rare diseases. For example, three orphan drugs were approved as treatments for a subset of non-small cell lung cancers that have a specific gene mutation. According to the study, these drugs can also be used off- label for diseases other than the non-small cell lung cancer subset for which they were originally approved. FDA has taken steps in recent years to address certain circumstances under which drug manufacturers may obtain orphan designation. For example, the agency recently issued guidance stating that it no longer plans to grant orphan designation to pediatric subsets of non-rare diseases. The agency attributed its decision, in part, to a loophole that could result in a drug receiving an orphan designation for a pediatric subset being exempt from requirements under the Pediatric Research Equity Act to study drug safety and effectiveness in pediatric subpopulations. FDA also held a workshop in May 2018 to seek input on appropriate orphan designation for certain oncology treatments to stay current with evolving knowledge. Orphan drug pricing. Stakeholders we interviewed and research we identified also raised concerns about the high prices drug manufacturers can charge for orphan drugs when receiving ODA incentives. Several stakeholders we spoke with noted that it was difficult to discuss the ODA without addressing concerns with how orphan drugs are priced. For example, one patient advocacy group told us that it may be appropriate for a drug to receive multiple orphan designations, but that the drug manufacturer should revise the price of its drug to reflect the number of orphan designations. Several studies have also pointed to high orphan drug prices as a public health challenge in terms of access and affordability, particularly when orphan drug development may be less costly than non-orphan drugs due to smaller and fewer efficacy and safety trials, shorter FDA review time, higher marketing approval success rates, and lower marketing costs. One study found an inverse relationship between the price of orphan drugs and their volume of use (i.e., the more expensive the orphan drug, the fewer patients who use the drug), and noted that over the past 20 years spending on medicine in the U.S. market has shifted increasingly toward drugs that treat relatively few people, such as those with rare diseases. With significant unmet need for most rare diseases, the ODA provides manufacturers with a variety of incentives if they develop drugs that meet orphan designation criteria. To ensure that drug manufacturers’ claims in their orphan designation applications are accurate, FDA must conduct thorough and consistent evaluations. FDA took several steps beginning in June 2017 to improve the consistency and efficiency of these evaluations, including introducing a standard review template and guidance for completing it. However, we found that FDA does not always ensure that all information is consistently recorded in its review templates and evaluated when making designation determinations, which are critical steps needed to understand the full context of a drug’s intended use in the rare disease. FDA has a number of options it could take to ensure that reviewers obtain all necessary information and use it to inform orphan designation determinations. For example, we found that FDA’s guidance was not always clear in instructing reviewers how they should use the information they record. Clarifying these requirements in guidance could help reviewers make use of this information, including the secondary reviewers who ensure the consistency and quality of designation reviews. While FDA action to improve its designation reviews will not address the broader rare disease drug development challenges identified by stakeholders we interviewed and research we analyzed, it could help FDA ensure the consistency of its review process, particularly as demand for orphan designations continues to grow. We are making the following recommendation to FDA: The Commissioner of FDA should ensure that information from orphan drug designation applications is consistently recorded in OOPD review templates and evaluated by OOPD reviewers when making an orphan designation decision. (Recommendation 1) We provided a draft of this report to the Department of Health and Human Services (HHS) for comment. In its written comments, reproduced in appendix III, the agency concurred with our recommendation. HHS also provided technical comments, which we incorporated as appropriate. In its response, HHS stated that it would consider our recommendation as part of FDA’s ongoing efforts to evaluate and revise the designation review template, and to train reviewers. Regarding the background information in the review template, HHS also noted that many drugs requesting orphan designation do not have relevant regulatory history, particularly adverse actions, as these drugs are early in drug development at the time of requesting orphan designation. However, HHS agreed with the importance of consistently documenting and utilizing background information, and stated that FDA will continue to apply consistent criteria to its review decisions. We are sending copies of this report to the Secretary of Health and Human Services, appropriate congressional committees, and other interested parties. The report is also available at no charge on the GAO website at http://www.gao.gov. If you or your staff have any questions about this report, please contact us at (202) 512-7114 or dickenj@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs are on the last page of this report. GAO staff who made major contributions to this report are listed in appendix IV. In October 2017, the Food and Drug Administration’s Office of Orphan Products Development (OOPD) introduced a standard review template, along with guidance for how to complete it, to aid its reviewers in evaluating orphan designation applications. OOPD guidance instructs its reviewers to record information about the drug and disease on the standard review template, as well as the results of independent verification done for certain information included in the application. The template is then used with the designation application to determine whether to grant orphan designation to a drug. (See table 6 for the information recorded in OOPD review templates.) The Food and Drug Administration (FDA) approved 351 orphan drugs for marketing from 2008 to 2017 in 27 different therapeutic areas. Forty-two percent (149) of orphan drug marketing approvals were in oncology, with six other therapeutic areas having 10 or more approved orphan drugs. (See table 7 for information on orphan drug marketing approvals from 2008 to 2017 by therapeutic area.) Additionally, the 351 orphan drug marketing approvals were for 252 unique drugs, because drugs can be approved for more than one orphan indication. The majority of drugs had one orphan indication (77.4 percent) or two orphan indications (15.9 percent). However, several drugs (6.7 percent) were approved to treat three or more orphan indications. In addition to the contact named above, Marcia Crosse (Director), Robert Copeland (Assistant Director), E. Jane Whipple (Analyst-in-Charge), and Brienne Tierney made key contributions to this report. Also contributing were Kaitlin Farquharson, Alison Granger, Drew Long, and Vikki Porter.

Summary: The ODA provides incentives, including tax credits and exclusive marketing rights, for manufacturers to develop drugs to treat rare diseases, which are typically defined as affecting fewer than 200,000 people in the United States. Approximately 7,000 rare diseases affect an estimated 30 million people in the United States, and only 5 percent of rare diseases have FDA-approved treatments. GAO was asked to examine FDA's orphan drug processes. In this report, GAO examines, among other things, (1) the actions FDA has taken to address the growing demand for orphan designations; (2) the extent to which FDA has used consistent criteria and complete information in reviewing orphan designation applications; and (3) the steps FDA has taken to address rare disease drug development challenges. GAO analyzed FDA documents and data, as well as all designation review templates FDA completed as of March 2018 for applications received from October to December 2017. GAO interviewed agency officials, as well as stakeholders, including drug manufacturers, industry experts, and patient advocacy groups. The Food and Drug Administration's (FDA) Office of Orphan Products Development is responsible for reviewing drug manufacturer applications for orphan designation. Drugs granted this designation treat rare diseases and may receive various incentives under the Orphan Drug Act (ODA). As the number of orphan designation applications received and granted has grown, FDA outlined several process changes in its June 2017 modernization plan to improve designation review timeliness and consistency. In evaluating designation applications, FDA reviewers generally apply two consistent criteria—(1) the size of the rare disease population, and (2) the scientific rationale that the drug may effectively treat the disease. To inform their evaluation, reviewers must record certain background information in a standard review template, such as the drug's U.S. marketing history. Officials told us this information provides important context, such as whether FDA has experience with a little known disease, critical to ensuring a complete designation application review. However, GAO's analysis of 148 designation review templates found that FDA does not consistently record or evaluate background information when making designation decisions. For example, 48 of 148 review templates GAO analyzed were missing information on the drug's U.S. marketing history. As such, FDA cannot be sure that reviewers are conducting complete evaluations that include all critical information needed for assessing its criteria. Stakeholders GAO interviewed and research GAO reviewed identified a number of rare disease drug development challenges, such as the difficulty in recruiting small populations for clinical trials, with differing opinions about the ODA incentives. For example, several stakeholders were critical of manufacturers obtaining multiple orphan designations—and ODA incentives—for the same drug when the drug may otherwise be profitable from treating multiple patient groups. However, many patient advocacy groups noted that granting ODA incentives in these circumstances is needed to encourage drug manufacturers to study the safety and efficacy of drugs in rare disease populations. FDA should ensure that all required information for reviews of orphan designation applications is consistently recorded and evaluated. The agency concurred with our recommendation.