Fairness in Orphan Drug Exclusivity

Floor Speech

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Mr. PALLONE. Madam Speaker, pursuant to House Resolution 403, I call up the bill (H.R. 1629) 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, and ask for its immediate consideration in the House.

The Clerk read the title of the bill.

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Mr. PALLONE. 1629, the Fairness in Orphan Drug Exclusivity Act.

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Mr. PALLONE. Madam Speaker, I yield myself such time as I may consume.

I rise in support of H.R. 1629, the Fairness in Orphan Drugs Exclusivity Act, a bill that will help make some prescription drugs more affordable for the American people.

This Democratic Congress is committed to lowering the costs of prescription drugs so that families are no longer forced to choose between paying for a lifesaving drug or food and rent. This legislation today, H.R. 1629, closes the loophole that has blocked patients from accessing cheaper generic drugs.

Last Congress, this legislation passed the Energy and Commerce Committee and the House by voice vote. Last week, it garnered support from a large majority in the House but not the two-thirds necessary to pass under suspension of the rules. And so, we are here again today to debate and pass H.R. 1629 that will help us address two national crises: first, the soaring costs of prescription drugs; and second, the ongoing opioid epidemic.

Madam Speaker, this legislation does that by closing a very narrow but real loophole in a program known as the orphan drug program. This program was created through the Orphan Drug Act, which has been successful in basically doing more research and discovery of new therapies to treat and even cure rare diseases. The law incentivizes the development of these lifesaving therapies by awarding 7 years of market exclusivity to manufacturers who receive orphan drug status.

There are two ways that manufacturers can receive these incentives. The first is when manufacturers develop drugs approved to treat diseases with patient populations of 200,000 or fewer. And the second way is if the manufacturer believes that the research and development costs are not expected to be recouped by sales of the underlying drug. This is known as the cost recovery pathway. It is rarely used, but unfortunately, it has led to manufacturers sometimes inappropriately receiving additional exclusivity and, therefore, delaying lower cost generics from coming to the market.

For example, under certain circumstances, if a manufacturer receives orphan drug status for one drug, that status and its incentives can be passed on to future drugs if those drugs treat the same condition and have the same active ingredient. The status and incentives would be available even if those future drugs do not meet the orphan drug qualifications.

What this means, Madam Speaker, is that future drugs can benefit from the 7 years of market monopoly without having to demonstrate that the drug will treat a population of 200,000 or fewer or that they may not be able to recoup the costs of producing the drug.

As a result of this loophole, some manufacturers are marketing widely used drugs to large populations while also blocking generic competition from coming to market.

Now, if I can give an egregious example of this, it comes from one of our most effective drugs to combat opioid use disorder. In 1994, an oral formulation of buprenorphine was granted orphan drug status. At the time, it was not expected that the drug would be prescribed frequently, and as a result, it was unlikely the manufacturer would recoup its development costs. More than 20 years later, however, in 2017, the same manufacturer developed a new injectable formulation of the same drug with the same active ingredient to treat the same condition. As a result, the manufacturer was able to prevent cheaper generics from coming to market.

But by 2017, the opioid epidemic worsened. Our response to the crisis evolved, and millions were eventually prescribed buprenorphine for treatment, generating billions of dollars in sales.

We know that buprenorphine was not an orphan drug as the law envisions. Nevertheless, the new injectable drug was automatically granted orphan drug status and exclusivity based on the original oral drug's orphan drug designation. This delayed the cheaper generic treatments for opioid use disorder from coming to market, and it kept the price of the drug high and limited access for those in need of treatment.

While the FDA eventually recognized this issue with this particular drug and revoked its orphan drug designation, its exclusivity delayed generic competition that otherwise would be on the market today.

The bottom line is, Madam Speaker, we need every tool available to combat the opioid epidemic, including low-cost, affordable medication treatments, and loopholes like this have to be closed.

H.R. 1629 would stop this from happening again in the future. It requires drug manufacturers to demonstrate in their application to the FDA that each drug application considered under the Orphan Drug Act cost recovery pathway would be unable to recoup development costs at the time of approval. This would include all drugs that seek the orphan drug designation under the cost recovery pathway, including the injectable buprenorphine example I just described. The bill would also ensure that these rules apply to drugs already on the market, so no drug manufacturers can claim orphan drug status without first meeting this requirement.

Now, I want to explain, because I know this is complicated, this bill is narrowly tailored to fix a narrow but very real loophole in the law. We cannot allow these manufacturers to game the system any longer, and that is why we have to close this loophole today.

I thank Congresswoman Dean, who is the sponsor of the bill. The merits of this bill are obvious, and I know she is going to talk about it more, but that is why it has received strong bipartisan support. I am confident that it will once again get bipartisan support today, make its way through the Senate, and the President will sign it.

I regret that we were not able to pass this legislation last week under suspension, but I believe that we will come together today to close this loophole. I thank our ranking member of the full committee, Mrs. Rodgers, for all of her help with this.

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Mr. PALLONE. Madam Speaker, I yield such time as she may consume to the gentlewoman from Pennsylvania (Ms. Dean), the sponsor of this bill.

I commend her for all the work she has done on this bill. This has been several Congresses now, and we are hoping this will be the final one where we get this bill passed.

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Mr. PALLONE. Madam Speaker, I would ask for support for this bill from both sides of the aisle. As I have mentioned in the past, it has passed the House previously.

Madam Speaker, I yield back the balance of my time.

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