IDEAS home Printed from https://ideas.repec.org/a/eee/hepoli/v95y2010i2-3p216-228.html
   My bibliography  Save this article

The US Orphan Drug Act: Rare disease research stimulator or commercial opportunity?

Author

Listed:
  • Wellman-Labadie, Olivier
  • Zhou, Youwen

Abstract

Objectives This study investigates issues associated with the United States Orphan Drug Act.Methods A comprehensive orphan drug database was compiled from FDA data and corporate annual reports of major pharmaceutical companies. Analysis allowed the generation of a descriptive orphan drug portrait as well as documentation of orphan drugs along their lifecycle.Results Currently, 2002 products have obtained orphan drug designation with 352 drugs obtaining FDA approval. Approximately 33% of orphan drugs are oncology products. On average, products obtain 1.7 orphan designations with approximately 70% obtaining a single designation. At least 9% of orphan drugs have reached blockbuster status with two-thirds having two or more designations. An additional 25 orphan drugs had sales exceeding US$ 100 million in 2008 alone. Since 1983, at least 14 previously discontinued products have been recycled as orphan drugs.Conclusions The United States Orphan Drug Act has created issues which, in some cases, have led to commercial and ethical abuses. Orphan Drug Act reform is necessary but current incentives, including 7 year market exclusivity, should be maintained in order to favour patients as well as economic prosperity. Suggested reforms include price regulation, subsidy paybacks for profitable drugs and the establishment of an International Orphan Drug Office.

Suggested Citation

  • Wellman-Labadie, Olivier & Zhou, Youwen, 2010. "The US Orphan Drug Act: Rare disease research stimulator or commercial opportunity?," Health Policy, Elsevier, vol. 95(2-3), pages 216-228, May.
    • Handle: RePEc:eee:hepoli:v:95:y:2010:i:2-3:p:216-228
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0168-8510(09)00325-X
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Rosenberg-Yunger, Zahava R.S. & Daar, Abdallah S. & Singer, Peter A. & Martin, Douglas K., 2008. "Healthcare sustainability and the challenges of innovation to biopharmaceuticals in Canada," Health Policy, Elsevier, vol. 87(3), pages 359-368, September.
    2. Joseph Golec & John Vernon, 2009. "Financial risk of the Biotech Industry versus the Pharmaceutical Industry," Applied Health Economics and Health Policy, Springer, vol. 7(3), pages 155-165, September.
    3. Yin, Wesley, 2008. "Market incentives and pharmaceutical innovation," Journal of Health Economics, Elsevier, vol. 27(4), pages 1060-1077, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dyfrig A Hughes & Jannine Poletti-Hughes, 2016. "Profitability and Market Value of Orphan Drug Companies: A Retrospective, Propensity-Matched Case-Control Study," PLOS ONE, Public Library of Science, vol. 11(10), pages 1-12, October.
    2. Marialuisa Saviano & Sergio Barile & Francesco Caputo & Mattia Lettieri & Stefania Zanda, 2019. "From Rare to Neglected Diseases: A Sustainable and Inclusive Healthcare Perspective for Reframing the Orphan Drugs Issue," Sustainability, MDPI, vol. 11(5), pages 1-21, March.
    3. Aaron S Kesselheim & Jessica A Myers & Daniel H Solomon & Wolfgang C Winkelmayer & Raisa Levin & Jerry Avorn, 2012. "The Prevalence and Cost of Unapproved Uses of Top-Selling Orphan Drugs," PLOS ONE, Public Library of Science, vol. 7(2), pages 1-7, February.
    4. Petra Maresova & Blanka Klimova & Kamil Kuca, 2016. "Financial and legislative aspects of drug development of orphan diseases on the European market -- a systematic review," Applied Economics, Taylor & Francis Journals, vol. 48(27), pages 2562-2570, June.
    5. Todd Gammie & Christine Y Lu & Zaheer Ud-Din Babar, 2015. "Access to Orphan Drugs: A Comprehensive Review of Legislations, Regulations and Policies in 35 Countries," PLOS ONE, Public Library of Science, vol. 10(10), pages 1-24, October.
    6. Salas-Vega, Sebastian & Shearer, Emily & Mossialos, Elias, 2020. "Relationship between costs and clinical benefits of new cancer medicines in Australia, France, the UK, and the US," Social Science & Medicine, Elsevier, vol. 258(C).
    7. Picavet, Eline & Cassiman, David & Simoens, Steven, 2012. "Evaluating and improving orphan drug regulations in Europe: A Delphi policy study," Health Policy, Elsevier, vol. 108(1), pages 1-9.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lockhart, Michelle & Babar, Zaheer Ud-Din & Garg, Sanjay, 2010. "Evaluation of policies to support drug development in New Zealand," Health Policy, Elsevier, vol. 96(2), pages 108-117, July.
    2. Gamba, Simona & Magazzini, Laura & Pertile, Paolo, 2021. "R&D and market size: Who benefits from orphan drug legislation?," Journal of Health Economics, Elsevier, vol. 80(C).
    3. Billette de Villemeur, Etienne & Versaevel, Bruno, 2019. "One lab, two firms, many possibilities: On R&D outsourcing in the biopharmaceutical industry," Journal of Health Economics, Elsevier, vol. 65(C), pages 260-283.
    4. Heidi L. Williams, 2016. "Intellectual Property Rights and Innovation: Evidence from Health Care Markets," Innovation Policy and the Economy, University of Chicago Press, vol. 16(1), pages 53-87.
    5. Iizuka, Toshiaki & Uchida, Gyo, 2017. "Promoting innovation in small markets: Evidence from the market for rare and intractable diseases," Journal of Health Economics, Elsevier, vol. 54(C), pages 56-65.
    6. Olson, Adam J. & Yust, Christopher G. & Christensen, Brant E., 2023. "Are public health policies associated with corporate innovation? Evidence from U.S. nonsmoking laws," Research Policy, Elsevier, vol. 52(10).
    7. Dana Goldman & Darius Lakdawalla & Tomas J. Philipson & Wesley Yin, 2010. "Valuing health technologies at nice: recommendations for improved incorporation of treatment value in HTA," Health Economics, John Wiley & Sons, Ltd., vol. 19(10), pages 1109-1116, October.
    8. Christopher Ody & Matt Schmitt, 2019. "Who cares about a label? The effect of pediatric labeling changes on prescription drug utilization," International Journal of Health Economics and Management, Springer, vol. 19(3), pages 419-447, December.
    9. Daniel Tobias Michaeli & Hasan Basri Yagmur & Timur Achmadeev & Thomas Michaeli, 2022. "Value drivers of development stage biopharma companies," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(8), pages 1287-1296, November.
    10. Bastian Rake, 2017. "Determinants of pharmaceutical innovation: the role of technological opportunities revisited," Journal of Evolutionary Economics, Springer, vol. 27(4), pages 691-727, September.
    11. Gentilini, Arianna & Miraldo, Marisa, 2023. "The role of patient organisations in research and development: Evidence from rare diseases," Social Science & Medicine, Elsevier, vol. 338(C).
    12. Kortelainen, Mika & Markkanen, Jaakko & Toivanen, Otto & Siikanen, Markku, 2023. "The Effects of Price Regulation on Pharmaceutical Expenditure and Availability," CEPR Discussion Papers 18497, C.E.P.R. Discussion Papers.
    13. Leila Agha & Soomi Kim & Danielle Li, 2020. "Insurance Design and Pharmaceutical Innovation," NBER Working Papers 27563, National Bureau of Economic Research, Inc.
    14. Agarwal, Ruchir & Gaule, Patrick, 2022. "What drives innovation? Lessons from COVID-19 R&D," Journal of Health Economics, Elsevier, vol. 82(C).
    15. Daniel J. Hemel & Lisa Larrimore Ouellette, 2023. "The Generic Drug Trilemma," Entrepreneurship and Innovation Policy and the Economy, University of Chicago Press, vol. 2(1), pages 41-77.
    16. Margaret K. Kyle, 2019. "The Alignment of Innovation Policy and Social Welfare: Evidence from Pharmaceuticals," NBER Chapters, in: Innovation Policy and the Economy, Volume 20, pages 95-123, National Bureau of Economic Research, Inc.
    17. Yin, Wesley, 2009. "R&D policy, agency costs and innovation in personalized medicine," Journal of Health Economics, Elsevier, vol. 28(5), pages 950-962, September.
    18. Bhattacharya, Jay & Packalen, Mikko, 2011. "Opportunities and benefits as determinants of the direction of scientific research," Journal of Health Economics, Elsevier, vol. 30(4), pages 603-615, July.
    19. Carl Blankart & Tom Stargardt & Jonas Schreyögg, 2011. "Availability of and Access to Orphan Drugs," PharmacoEconomics, Springer, vol. 29(1), pages 63-82, January.
    20. Olga Bruyaka & Hanko Zeitzmann & Isabelle Chalamon & Richard Wokutch & Pooja Thakur, 2013. "Strategic Corporate Social Responsibility and Orphan Drug Development: Insights from the US and the EU Biopharmaceutical Industry," Journal of Business Ethics, Springer, vol. 117(1), pages 45-65, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:hepoli:v:95:y:2010:i:2-3:p:216-228. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu or the person in charge (email available below). General contact details of provider: http://www.elsevier.com/locate/healthpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.