The Orphan Drug Act and FDA Regulations: Setting the Stage for Ensuing Litigation

The cost and availability of prescription drugs have been of congressional interest, and expenditures related to the research and development of new drugs are a significant driver of drug costs.¹ A 2016 report by the Tufts Center for Drug Development estimated the pretax and preapproval cost of developing a Food and Drug Administration (FDA)-approved prescription drug was $2.6 billion, while a 2016 Department of Health and Human Services (HHS) report estimated a range from $1.2 billion to $2.6 billion.² Given the extraordinary cost associated with development and marketing of a new drug, manufacturers aim to recover much of their research and development costs through drug sales.

Historically, drugs designed to treat rare diseases and conditions received little attention from U.S. drug manufacturers, given the high cost of development and lack of widespread use.³ These drugs became known as "orphan drugs."⁴ In the 1970s, there was growing concern about the need for drugs to treat rare diseases; at that time, FDA established two committees to study the "inadequate motivation, and resources, for the development and distribution of drugs for rare diseases."⁵

Congress began investigating and holding hearings on the development of drugs for rare diseases in June 1980.⁶ As part of this effort, the House Subcommittee on Health and the Environment surveyed a number of federal agencies, universities, and pharmaceutical companies to gather information about various drug products used to treat rare diseases in the United States.⁷ The results of the survey, published in 1982, showed that so-called orphan drugs were generally not profitable, many were not patentable, and it was difficult for drug sponsors to conduct clinical trials to demonstrate their safety and effectiveness—in part because of the small patient populations they were developed to treat.⁸

Given the high cost of drug development and approval in the United States, Congress found that "it is not financially feasible, except as a public service, for a pharmaceutical manufacturer to expend research and development funds" on orphan drugs, which are typically used only to treat small subsets of the population.⁹ So in 1983, Congress enacted the Orphan Drug Act (ODA) as a way to "facilitate the development of drugs for rare diseases or conditions,"¹⁰ primarily by establishing financial incentives—including tax credits, grant funding, and market exclusivity—to encourage pharmaceutical companies to develop and market orphan drugs in the United States.¹¹

The FDA, a division of HHS, administers the ODA. The statute does not explicitly define "orphan drug," but FDA has issued regulations to define the term as a drug "intended for use in a rare disease or condition," which is consistent with the statute's phrasing.¹² The ODA contains two main components: (1) orphan-drug designation, as described in Section 360bb, and (2) orphan-drug market exclusivity, as described in Section 360cc.¹³ Drug manufacturers may apply to obtain an orphan-drug designation for drugs in development. If granted, orphan-drug designation enables a drug manufacturer to access financial assistance for drug research and development, including tax credits for clinical testing of the drug, grant funding to cover research costs, and a waiver of FDA's Prescription Drug User Fee if it ultimately submits an application for FDA approval of the drug.¹⁴ If a drug manufacturer receives FDA approval to market a drug designated as an orphan drug, the manufacturer is generally entitled to a seven-year exclusivity period. During the seven-year orphan-drug exclusivity period, the FDA cannot approve an application from a different drug manufacturer for approval¹⁵ to market the same drug for the same disease or condition.¹⁶ These statutory mechanisms of designation, approval, and exclusivity are intended to work together to promote the research and development of orphan drugs.¹⁷

Orphan-Drug Designation

Orphan-drug designation allows drug manufacturers¹⁸ and sponsors¹⁹ to access financial benefits and incentives early in the drug development process, and it also assures orphan-drug exclusivity for a successfully marketed drug, which aids in the recoupment of the sizable upfront investment in drug development.²⁰ A manufacturer or sponsor may apply for an orphan-drug designation at any time during the drug development process, so long as the request is submitted before submitting the application for FDA approval of the drug.²¹ FDA regulations spell out the specific requirements for the content and format of orphan-drug designation requests,²² discuss how the FDA verifies orphan-drug status²³ and alerts drug sponsors of deficiencies,²⁴ and stipulate the conditions under which the FDA may refuse to grant²⁵ or revoke a designation request.²⁶

Manufacturers and sponsors may seek an orphan-drug designation if the drug is currently being investigated or will be investigated for a rare disease or condition and the approval or licensing of the drug would be for the "use for such disease or condition."²⁷ For purposes of orphan-drug designation, a "rare disease or condition" is one that either (1) affects fewer than 200,000 people in the United States; or (2) affects more than 200,000 people in the United States but for which a manufacturer does not have a "reasonable expectation" of recovering its development costs from sales.²⁸ A manufacturer may seek orphan-drug designation for either a previously unapproved drug, or for a new use of a drug that is already FDA-approved.²⁹ Additionally, if the FDA has already designated and approved an orphan drug for a particular rare disease or condition, a sponsor may receive a subsequent designation for the same drug for the same disease or condition if it can present a "plausible hypothesis" that the second drug is clinically superior to the original.³⁰

FDA's Orphan-Drug Designation Process

After a manufacturer files a designation request, the FDA determines whether the drug meets the definition of an orphan drug.³¹ To enable the FDA to make this determination, sponsors must submit documentation showing either that (1) the prevalence of the rare disease or condition is fewer than 200,000 people, or (2) the sponsor does not reasonably anticipate recouping the costs of research and development of the drug through domestic sales.³² For the first path, the sponsor must provide evidence of the estimated disease prevalence, and the FDA may request additional documentation, including the estimated prevalence of any other disease or condition for which the drug is being developed or was already approved.³³ The sponsor must also estimate the number of people who would receive the drug on a yearly basis.³⁴

For the second path—demonstrating that developing the drug would not be cost effective—the sponsor must submit data on all costs incurred and expected to be incurred in the research and development of the drug, as well as a justification of the reasonableness of the cost data.³⁵ If a drug has already been approved and marketed for a different indication, or if the drug is being investigated for another indication, the sponsor must apportion the development cost data for each indication.³⁶ Sponsors are also required to estimate and justify the expected costs of marketing and production and the expected revenues from sales of the drug through seven years after marketing the drug.³⁷ Sponsors must also submit information about any other countries where the drug has already been approved and an independent accountant's certification of the request's data estimates and justifications.³⁸ (There are additional legal requirements for drugs developed either wholly or partially outside the United States.³⁹)

If the FDA determines that a designation request is inaccurate or incomplete, it sends the sponsor a deficiency letter; the sponsor then has one year to either respond to the letter or withdraw the designation request.⁴⁰ The FDA denies a designation request if there is insufficient evidence that the drug will be used to treat fewer than 200,000 people or if a sponsor fails to demonstrate that there is no reasonable expectation that its costs could be recouped through domestic sales.⁴¹ The FDA may also deny a designation request if the sponsor does not demonstrate a "medically plausible" theory showing that the drug will be effective in diagnosing, treating, or preventing a rare disease or condition.⁴² Additionally, if the drug is the same as one that has already been approved and the sponsor has not demonstrated a "medically plausible hypothesis" of clinical superiority, or if the designation contains a false statement of material fact, the FDA may refuse to grant the designation.⁴³ The FDA grants a designation request when none of the reasons for refusing it apply.⁴⁴ The FDA updates a publicly available list of orphan designations every month.⁴⁵

FDA may revoke an orphan-drug designation after it is granted if the agency determines that the designation request contained "an untrue statement of material fact," omitted required material information, or was not actually eligible for designation at the time of the request.⁴⁶

Post-Designation Manufacturer Requirements

Certain requirements apply to manufacturers that receive orphan drug designation. During preclinical investigations before the drug is approved, the manufacturer must notify the FDA if it decides to discontinue its pursuit of FDA approval.⁴⁷ The FDA also requires manufacturers with an orphan drug designation to submit yearly progress reports to the FDA detailing the progress of drug development, including any clinical or preclinical studies, a yearly plan for investigation and any anticipated hurdles, and any changes that could affect the status of the product, including differences in market indications and designation indications.⁴⁸ If an orphan drug becomes FDA-approved, a manufacturer must notify the FDA if it chooses to halt production of the drug.⁴⁹

Orphan-Drug Exclusivity

Before the sponsor of a designated orphan drug may market the drug, the sponsor must seek FDA approval by applying under Section 505 of the Federal Food, Drug, and Cosmetic Act (FDCA)⁵⁰ for drugs or Section 351 of the Public Health Service Act (PHSA)⁵¹ (42 U.S.C. § 262) for biologics.⁵² If the FDA approves a drug designated as an orphan drug, the drug sponsor is entitled to market exclusivity.⁵³ The ODA's exclusivity provision prohibits the FDA from approving another drug or licensing another biologic "for the same drug for the same disease or condition ... until the expiration of seven years from the date" of the original approval (or licensure, in the case of biologics).⁵⁴ This seven-year period is known as the "orphan-drug exclusivity" period.

In its implementing regulations, the FDA has interpreted the seven-year exclusivity period in a way that may limit its applicability. The regulations state that exclusivity "protects only the approved indication or use of a designated drug."⁵⁵ Accordingly, if an orphan drug is approved for certain indications or uses for the rare disease or conditions, the regulations allow the FDA to "later approve the drug for additional indication(s) or use(s) within the rare disease or condition not protected by the exclusive approval."⁵⁶

In other words, the FDA treats orphan-drug exclusivity as specific to the designated use or indications for the drug rather than extending to any and all uses or indications for the rare disease or condition.⁵⁷ Thus, the FDA could designate an orphan drug for a particular indication, and then later designate the same drug for the same disease or condition but with a different indication.⁵⁸ Given the high cost of developing orphan drugs and the value of orphan-drug exclusivity, the FDA's interpretation has generated controversy and litigation. As discussed below, a manufacturer recently challenged this interpretation, and questions remain about its validity.⁵⁹

The statute provides two exceptions to the seven-year exclusivity period for orphan drugs, which allow the FDA to approve a competing orphan drug during the seven-year exclusivity period.⁶⁰ First, the FDA may approve another marketing application for "the same drug for the same disease or condition" if the FDA finds that the manufacturer of the original orphan drug cannot provide sufficient quantities of the drug to meet the demand for persons with the disease or condition.⁶¹ Second, the FDA may override orphan-drug exclusivity with written consent of the holder of the approval or licensure.⁶² The regulations provide two additional situations when the FDA may approve a sponsor's marketing application despite another manufacturer having received orphan-drug exclusivity: (1) if the FDA revokes the orphan-drug designation or the drug's approval; and (2) when the orphan drug's marketing application is withdrawn for any reason.⁶³

Following uncertainty about the scope of the exclusivity for a subsequent sponsor of the same orphan drug for the same disease or condition, Congress created an additional requirement for orphan-designated drugs that enter the market when the same drug has already been approved for the same disease or condition.⁶⁴ In the FDA Reauthorization Act of 2017, Congress amended the exclusivity requirements of the ODA to create a "[c]ondition of clinical superiority" for sponsors that request orphan-drug exclusivity for a drug that the FDA has already approved to treat the same rare disease or condition.⁶⁵ The amendments clarify that a sponsor may obtain market exclusivity for an already approved orphan drug, but to do so, it must demonstrate that its drug is "clinically superior" to the previously approved drug.⁶⁶

The statute defines a drug as being clinically superior when it "provides a significant therapeutic advantage over and above an already approved drug in terms of greater efficacy, greater safety, or by providing a major contribution to patient care."⁶⁷ To aid in the process of demonstrating clinical superiority, the FDA is required to notify sponsors of the basis for the orphan-drug designation, including "any plausible hypothesis" on which the FDA relies to find the drug clinically superior.⁶⁸ The FDA must also publish a summary of its clinical superiority findings after granting an application for exclusive approval or licensure of an orphan drug on the basis of clinical superiority.⁶⁹

Interpreting "Same Disease or Condition": Catalyst Pharmaceuticals, Inc. v. Becerra

Since the ODA was enacted, courts have heard a number of cases addressing the scope of orphan-drug exclusivity.⁷⁰ A recent case, Catalyst Pharmaceuticals, Inc. v. Becerra, interpreted the meaning of the words "same disease or condition" with respect to the orphan-drug exclusivity.⁷¹

Catalyst arose after two different orphan-drug manufacturers received FDA approval to market amifampridine, which is used to treat Lambert-Eaton Myasthenic Syndrome (LEMS).⁷² The FDA designated Catalyst's drug Firdapse (a brand name for amifampridine) as an orphan drug for the treatment of LEMS in 2005; the FDA approved Firdapse for the treatment of LEMS in adults on November 28, 2018.⁷³

A competing manufacturer, Jacubus, received an orphan-drug designation for Ruzurgi (the brand name for its version of amifampridine) in 1990.⁷⁴ The FDA approved Ruzurgi for the treatment of LEMS in pediatric patients on May 6, 2019.⁷⁵ Catalyst challenged the FDA's approval of Ruzurgi, alleging that the approval of Ruzurgi violated Catalyst's orphan-drug exclusivity for Firdapse.⁷⁶ The central issue in the case was whether the FDA could interpret the statutory phrase "same drug for the same disease or condition" so as to allow it to approve the same drug for the same disease but for a different indication (e.g., treating adults versus treating children).⁷⁷

District Court Decision

On September 29, 2020, the U.S. District Court for the Southern District of Florida held that FDA had not violated the ODA or the Administrative Procedure Act (APA) in approving Ruzurgi.⁷⁸ Catalyst had argued that the FDA's approval of Ruzurgi infringed upon Catalyst's regulatory exclusivity for Firdapse.⁷⁹ Catalyst argued that the FDA's approval of Ruzurgi violated the plain language of the ODA, which prohibits the FDA from approving "the same drug for the same disease or condition" during Catalyst's exclusivity period.⁸⁰ In response, the FDA argued that the ODA's language was ambiguous and that therefore, under what is known as the Chevron doctrine, the court should defer to its interpretation of the ODA.⁸¹ That interpretation, as discussed earlier, is embodied in the FDA regulation interpreting the phrase "same disease or condition" to refer to the drug's use as stated in the NDA, rather than the orphan-drug designation.⁸²

When Congress gives an agency like the FDA regulatory authority, that authority is constrained by the statutes that authorize the FDA to carry out the delegated tasks.⁸³ The Chevron doctrine is a two-step framework of review used by federal courts that generally applies when Congress gives an agency the authority to make rules that have the force of law.⁸⁴ If a court determines that Chevron applies, at step one, the court will use traditional tools of statutory construction to determine whether Congress directly addressed the precise issue before the court.⁸⁵ If the statute is clear on its face, then the Court must implement Congress's stated intent.⁸⁶ If the court concludes that the statute is silent or ambiguous, it will proceed to Chevron's second step.⁸⁷ Under step two, a court must defer to an agency's reasonable interpretation of the statute.⁸⁸

Using a Chevron analysis, the district court first found the phrase "same disease or condition" ambiguous, stating "it is not clear whether the language 'disease or condition' in section 360cc refers to the approved disease or condition for which the sponsor applies in its [New Drug Application], or the disease or condition that was initially designated under section 360bb."⁸⁹

In Chevron's second step, the court found that the FDA's interpretation of the ambiguous statutory provision was reasonable, pointing to both the text of the statute as well as the greater statutory scheme.⁹⁰ The court reasoned that because Section 360cc referred back to Section 355 of the FDCA (which concerns drug approvals), more than one interpretation was reasonable.⁹¹ The court observed that "Congress could have, but did not, omit reference to section 355, or make clear that the term 'same disease or condition' refers only to the disease or condition as designated in section 360bb."⁹² In other words, because the relevant provision of the statute refers to the NDA process in Section 355, and an NDA is specific to certain uses or indications for a drug, it was reasonable for the FDA to approve two orphan-drug applications for the same drug when those two drugs were approved for different indications. The court conceded that Catalyst's interpretation of the statute "was not necessarily wrong, but it is not the only reasonable way to interpret the plain language of the statute."⁹³

Eleventh Circuit Reversal

Catalyst appealed the district court's ruling to the U.S. Court of Appeals for the Eleventh Circuit (the 11th Circuit).⁹⁴ On September 30, 2021, the 11th Circuit reversed the district court, holding that the ODA's use of "same disease or condition" was not ambiguous, and thus that the FDA violated Catalyst's seven-year orphan-drug exclusivity when it approved Ruzurgi.⁹⁵

The 11th Circuit began with the statutory text. After reviewing various definitions of the term "same," the court concluded that "[t]he ordinary and plain meaning of 'same disease or condition' read in the context of [the statute] yields only one result—the term unambiguously refers to the 'rare disease or condition' designated under § 360bb."⁹⁶ The 11th Circuit disagreed with the district court's conclusion that the statute's earlier reference to Section 355 (the NDA provisions) made the phrase "same disease or condition" ambiguous, finding it unsupported by the statutory text.⁹⁷ The court observed that Section 355 contains "more limited language" than the "broader" language used in Section 360cc, and thus inferred that Congress must have meant to exclude these more specific terms.⁹⁸ The court stated that "if Congress wanted to make the 'use or indication' inquiry relevant to a holder's market exclusivity for an orphan drug, it could have done so by including such language in § 360cc(a). The fact that Congress did not include that language counsels against an interpretation that finds an ambiguity in § 360cc(a)'s language."⁹⁹

The court also pointed to other cases interpreting the ODA's market exclusivity provision with respect to a drug's use or indication. The court found that reading these cases as supportive of the FDA's position was to take their holdings out of context.¹⁰⁰ One such case was Sigma-Tau Pharmaceuticals, Inc. v. Schwetz, in which the Fourth Circuit interpreted the ODA market exclusivity provisions in the context of generic drug production.¹⁰¹ In Sigma-Tau, a manufacturer received a seven-year orphan drug exclusivity for a drug known as levocarnitine, which was used to treat carnitine deficiency in patients with certain metabolic disorders.¹⁰² Shortly after the exclusivity period ended, the manufacturer obtained another orphan-drug exclusivity for the same drug to treat carnitine deficiency in patients with end-stage renal disease (ESRD).¹⁰³ During the second exclusivity period for levocarnitine, the FDA approved a generic form of the drug for patients with metabolic disorders, and Sigma-Tau sued, arguing that the FDA's approval of the generic violated its market exclusivity because the generic could be prescribed off-label to treat carnitine deficiency for ESRD patients, the condition for which it still held exclusivity.¹⁰⁴ The Fourth Circuit disagreed, finding the plain language of the ODA¹⁰⁵ unambiguous; the court stated that "Congress made clear its intention that § 360cc(a) was to be disease-specific, not drug-specific. In other words, the statute as written protects uses, not drugs for any and all uses."¹⁰⁶ Accordingly, FDA could approve a generic version of the same drug for a different disease than the one entitled to exclusivity.

In Catalyst, the 11th Circuit distinguished Sigma Tau on the basis that it concerned orphan-drug exclusivity for two different diseases. It declined to extend the Fourth Circuit's ruling to a situation in which the same drug was being used to treat the same condition but with two different indications.¹⁰⁷ Because the court found that the ODA's phrase "same disease or condition" was unambiguous, it concluded that the FDA's interpretation was not entitled to Chevron deference.¹⁰⁸ The court held that "the FDA's interpretation of [the ODA] is contrary to the clear statutory language enacted by Congress."¹⁰⁹ The court set aside the FDA's approval of Ruzurgi and remanded the case to the district court, which granted Catalyst's motion for summary judgment.¹¹⁰ The FDA's motion for rehearing en banc was denied.¹¹¹

FDA Non-Acquiescence in the Context of the ODA

Non-Acquiescence to Catalyst

Within the field of administrative law, the practice of agency non-acquiescence is defined as "[t]he selective refusal of administrative agencies to conduct their internal proceedings consistently with adverse rulings of the courts of appeals."¹¹² Federal agencies, including the FDA, occasionally engage in this practice, which has "persisted without either legitimation or interdiction by Congress or the Supreme Court" since at least the 1940s.¹¹³ While some courts and scholars have questioned the constitutionality of the practice of agency non-acquiescence, others have insisted that it remains an essential component of administrative law.¹¹⁴ As discussed in this report, within the context of orphan-drug exclusivities, the FDA has non-acquiesced to federal court rulings on a few occasions.¹¹⁵

In the months after Catalyst was decided, stakeholders debated its impact on orphan drug development. Some went so far as to claim that the decision "undoubtedly increases the value of orphan-drug exclusivity to include the entire disease or condition," while others were less certain, saying only that the decision created "uncertainty," and that orphan-drug sponsors would need to monitor the FDA's reaction to the ruling "to evaluate the potential impact for their rare disease products."¹¹⁶ On January 24, 2023, the FDA issued a Federal Register Notice (FRN) announcing that, although it had complied with the 11th Circuit's order in Catalyst and rescinded Jacobus's approval for Ruzurgi, the "FDA intends to continue to apply its regulations tying the scope of orphan-drug exclusivity to the uses or indications for which a drug is approved."¹¹⁷

To explain its reasoning, the FDA referenced its regulatory definition of "orphan-drug exclusive approval," which states that it will not extend exclusivity to a subsequent sponsor that requests approval for the same drug for the same use or indication.¹¹⁸ The FDA also pointed to its regulations on the scope of orphan-drug exclusivity, stating that "orphan-drug exclusive approval protects only the approved indication or use of a designated drug."¹¹⁹

The FDA provided several reasons for continuing to tie exclusivity to an orphan drug's use or indication. First, contrary to the 11th Circuit's holding in Catalyst, the FDA reasserted its position that the statutory text in Section 360cc(a) is ambiguous.¹²⁰ Second, the FDA asserted that its interpretation of the statute "best advances the [ODA]'s purposes, appropriately balancing the need to incentivize the development of drugs for rare diseases . . . with the need to provide patient access to orphan drugs."¹²¹ The FDA pointed out that limiting the scope of exclusivity to the drug's use or indication leaves room for other sponsors to continue to innovate. In addition, other sponsors may be incentivized by the continued availability of exclusivity to pursue other indications for the same drug and same disease or condition that are not covered by the approved drug's exclusivity.¹²² In this way, the regulations "incentivize sponsors to continue to develop a drug for use in all persons affected by a rare disease or condition."¹²³ For these reasons, the agency has decided to "continue to apply its longstanding regulations" regarding the scope of orphan-drug exclusivity.¹²⁴

FDA Non-Acquiescence Regarding Clinical Superiority and Congressional Response

The FDA's January 2023 FRN is not the first time that the agency has chosen not to adopt a court's reasoning for future approvals regarding the scope of exclusivity in the ODA. In the 2014 case Depomed, Inc. v. U.S. Department of Health & Human Services, the D.C. District Court ruled against the FDA's requirement that a subsequent sponsor of the same orphan drug for the same disease or condition demonstrate clinical superiority to receive marketing exclusivity. The court concluded that the plain language of the ODA required that any sponsor of a designated orphan drug receive seven years of exclusivity following approval, regardless of whether the same drug had already been approved for the same disease or condition.¹²⁵ The FDA initially appealed the ruling to the D.C. Circuit but later withdrew its appeal, instead opting to publish an FRN stating its non-acquiescence to the decision.¹²⁶ The FRN summarized the FDA's policy of requiring subsequent manufacturers of the same orphan drug for the same disease or condition to demonstrate clinical superiority in order for the drug to receive seven years of market exclusivity.¹²⁷ Similar to the aftermath of Catalyst, the FDA stated its intention to "continue to apply its existing regulations . . . to orphan-drug exclusivity matters," and that it interpreted the ODA "to require the sponsor of a designated drug that is the same as a previously approved drug to demonstrate that its drug is clinically superior to that drug upon approval" to receive market exclusivity.¹²⁸

Less than four years later, Eagle Pharmaceuticals, Inc. v. Azar presented the same legal question of whether the ODA permitted the FDA to require subsequent manufacturers of the same orphan drug to demonstrate clinical superiority prior to receiving exclusivity.¹²⁹ While Eagle was being litigated, Congress passed the FDA Reauthorization Act of 2017, amending Section 360cc of the ODA to codify the FDA's clinical superiority requirement for market exclusivity, thus superseding Depomed.¹³⁰ Because Congress did not retroactively apply these changes to the ODA, however, the district court applied the earlier text of the ODA to hold that the FDA lacked the authority to apply the clinical superiority requirements when granting orphan-drug approvals prior to the statutory change.¹³¹ The D.C. Circuit affirmed the district court's decision on appeal, unpersuaded by the FDA's arguments that the absence of a clinical superiority requirement would create "serial exclusivity."¹³²

Considerations for Congress

A 2020 HHS drug pricing report to Congress showed that drug spending is increasing across federal health care programs, and Congress is consistently concerned about rising prescription drug costs.¹³³ The ODA attempts to balance the competing needs and interests of pharmaceutical companies and patients with rare diseases by incentivizing the development and marketing of orphan drugs.¹³⁴ Between the act's passage in 1983 and 2018, the FDA has approved more than 500 orphan drugs,¹³⁵ and more recently, between 2017 and 2021, orphan drugs made up about half of the FDA's drug approvals.¹³⁶ At the same time, the median treatment cost for an orphan drug upon market entry was more than $218,000, compared to the median cost of a non-orphan drug at $12,798.¹³⁷

Since its creation, the ODA has been criticized by some stakeholders for giving drug companies too much power to monopolize and profit from lifesaving medications.¹³⁸ Others argue that the law is outdated and does not take into account more recent advances in science, whose increased focus on genetic research tied to specific patient subpopulations makes it more likely that new therapies will qualify as orphan drugs.¹³⁹ Some critics of the law highlight that the ODA's seven-year exclusivity has often been abused, in their view, and that the exclusivity makes it more difficult for patients to afford their medications.¹⁴⁰ Others have praised the law for encouraging manufacturers to invest in research and development for otherwise unprofitable drugs, highlighting that without it, many lifesaving therapies would likely be unavailable.¹⁴¹ Stakeholders have also disagreed about whether the ODA should take into account drug-pricing practices, as the ODA does not give the FDA authority to directly regulate drug prices or to consider the impact of orphan-drug status on pricing.¹⁴²

The Government Accountability Office (GAO) evaluated the FDA's orphan-drug processes, including how the FDA has addressed the increase in demand for orphan-drug designations and how FDA has addressed orphan-drug development challenges.¹⁴³ The study was conducted by analyzing FDA data, templates for orphan-drug designation applications, and interviews with patient advocates, manufacturers, industry experts, and others.¹⁴⁴ In its report, the GAO highlighted competing views regarding the profitability of orphan drugs and the need for further incentives for manufacturers to develop orphan-drug therapies.¹⁴⁵ The report similarly commented that much of the recent action FDA has taken to increase efficiency in its review of orphan-drug designation applications does not address the wider disagreements about the unmet need for rare disease treatments, the need for orphan-drug incentives, and the high cost of orphan drugs, including the effects of these costs on patients.¹⁴⁶

To address these and other concerns, Members of the 118^th Congress have proposed various amendments to the ODA, including changes to address the potential for uncertainty caused by the 11th Circuit's decision in Catalyst.¹⁴⁷ The Retaining Access and Restoring Exclusivity (RARE) Act, proposed in both the 117th and 118th Congresses, would amend the ODA to mirror the FDA's interpretation of the scope of the exclusivity provision for approved or licensed orphan drugs.¹⁴⁸ Specifically, the RARE Act would codify the FDA's interpretation of the "same drug for the same disease or condition" language to read, "the same drug for the same approved use or indication within such rare disease or condition."¹⁴⁹ Such a change would codify the FDA's regulations regarding the scope of orphan-drug approvals.¹⁵⁰ More than 80 stakeholder groups, including the National Organization for Rare Disorders and various foundations and associations dedicated to the study of rare diseases, sent a letter to the leadership of the Senate Committee on Health, Education, Labor and Pensions, urging the 117th Congress to enact the legislation.¹⁵¹ Alternatively, Congress could also enact legislation codifying the 11th Circuit's broader definition, or choose to take no action.