Fairness in Orphan Drug Exclusivity Act
Floor Speech
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Mr. PALLONE. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 4712) to amend the Federal Food, Drug, and Cosmetic Act with respect to limitations on exclusive approval or licensure of orphan drugs, and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows: H.R. 4712
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE.
This Act may be cited as the ``Fairness in Orphan Drug Exclusivity Act''. SEC. 2. LIMITATIONS ON EXCLUSIVE APPROVAL OR LICENSURE OF ORPHAN DRUGS.
(a) In General.--Section 527 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360cc) is amended--
(1) in subsection (a), by striking ``Except as provided in subsection (b)'' and inserting ``Except as provided in subsection (b) or (f)''; and
(2) by adding at the end the following:
``(f) Limitations on Exclusive Approval, Certification, or License.--
``(1) In general.--For a drug designated under section 526 for a rare disease or condition pursuant to the criteria set forth in subsection (a)(2)(B) of such section, the Secretary shall not grant, recognize, or apply exclusive approval or licensure under subsection (a), and, if such exclusive approval or licensure has been granted, recognized, or applied, shall revoke such exclusive approval or licensure, unless the sponsor of the application for such drug demonstrates--
``(A) with respect to an application approved or a license issued after the date of enactment of this subsection, upon such approval or issuance, that there is no reasonable expectation at the time of such approval or issuance that the cost of developing and making available in the United States such drug for such disease or condition will be recovered from sales in the United States of such drug, taking into account all sales made or reasonably expected to be made within 12 years of first marketing the drug; or
``(B) with respect to an application approved or a license issued on or prior to the date of enactment of this subsection, not later than 60 days after such date of enactment, that there was no reasonable expectation at the time of such approval or issuance that the cost of developing and making available in the United States such drug for such disease or condition would be recovered from sales in the United States of such drug, taking into account all sales made or reasonably expected to be made within 12 years of first marketing the drug.
``(2) Considerations.--For purposes of subparagraphs (A) and (B) of paragraph (1), the Secretary and the sponsor of the application for the drug designated for a rare disease or condition described in such paragraph shall consider sales from all drugs that--
``(A) are developed or marketed by the same sponsor or manufacturer of the drug (or a licensor, predecessor in interest, or other related entity to the sponsor or manufacturer); and
``(B) are covered by the same designation under section 526.
``(3) Criteria.--No drug designated under section 526 for a rare disease or condition pursuant to the criteria set forth in subsection (a)(2)(B) of such section shall be eligible for exclusive approval or licensure under this section unless it met such criteria under such subsection on the date on which the drug was approved or licensed.''.
(b) Rule of Construction.--The amendments made in subsection (a) shall apply to any drug that has been or is hereafter designated under section 526 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360bb) for a rare disease or condition pursuant to the criteria under subsection (a)(2)(B) of such section regardless of--
(1) the date on which such drug is designated or becomes the subject of a designation request under such section;
(2) the date on which such drug is approved under section 505 of such Act (21 U.S.C. 355) or licensed under section 351 of the Public Health Service Act (42 U.S.C. 262) or becomes the subject of an application for such approval or licensure; and
(3) the date on which such drug is granted exclusive approval or licensure under section 527 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360cc) or becomes the subject of a request for such exclusive approval or licensure. SEC. 3. DETERMINATION OF BUDGETARY EFFECTS.
The budgetary effects of this Act, for the purpose of complying with the Statutory Pay-As-You-Go Act of 2010, shall be determined by reference to the latest statement titled ``Budgetary Effects of PAYGO Legislation'' for this Act, submitted for printing in the Congressional Record by the Chairman of the House Budget Committee, provided that such statement has been submitted prior to the vote on passage.
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Mr. PALLONE. 4712.
Mr. Speaker, today I rise in support of H.R. 4712, the Fairness in Orphan Drug Exclusivity Act, a bill that will close a loophole in the orphan drug program to ensure generic drugs are not unfairly being blocked from entering the market.
Since it was first passed in 1983, the Orphan Drug Act has been successful in driving research and discovery of new therapies to treat and even cure rare diseases. The law creates two pathways for manufacturers to be designated as an orphan drug and to gain certain incentives, including 7 years of market exclusivity.
The first and most commonly used pathway is for developing drugs approved to treat diseases with patient populations of 200,000 or fewer. There is also the rarely used cost-recovery pathway, where the drug research and development costs are not expected to be recouped by sales of the underlying drug.
Now, under certain circumstances, a manufacturer may also receive additional rounds of exclusivity for drugs in their portfolio if they treat the same conditions and have the same active ingredient, even if the second drug does not meet the orphan drug qualifications. This provision has allowed some manufacturers to circumvent the original intent of the Orphan Drug Act, which was to incentivize creation of novel drugs for small populations, all the while blocking generic competitors from coming to market.
An example of this recently occurred when a formulation of Buprenorphine, a drug to treat opioid use disorder, was approved in 2017. It was allowed to carry the orphan drug designation granted to its manufacturer's original Buprenorphine drug more than 20 years earlier, in 1994.
When the original 1994 orphan drug designation was granted, it was expected that Buprenorphine would not be prescribed frequently; however, as the opioid crisis worsened and our response to the crisis evolved, millions were eventually prescribed the drug, generating billions of dollars in sales.
Clearly, we knew in 2017 that Buprenorphine was not an orphan drug. Nevertheless, the drug was granted orphan drug status and exclusivity, delaying additional forms of generic competition. So while the Food and Drug Administration eventually recognized this issue with this particular drug and revoked its orphan drug designation, its exclusivity delayed generic competition that otherwise would have been on the market.
We need every tool available to us to combat the opioid epidemic, and loopholes like this one should not be allowed to limit access to treatment, Mr. Speaker.
H.R. 4712 will stop this from happening again in the future by requiring drug manufacturers to demonstrate in their application to the FDA that each drug application considered under the cost recovery pathway would fail to recoup development costs.
This bill is narrowly tailored. It is a fix for a small but very real loophole in the law, and I want to thank Representative Dean for introducing the legislation.
Mr. Speaker, I urge all of my colleagues to support it, and I reserve the balance of my time.
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Mr. PALLONE. Dean), who is the sponsor of the legislation.
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Mr. PALLONE. Mr. Speaker, I have no additional speakers, I urge passage of the bill, and I yield back the balance of my time.
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