Drugs

‘Rethink’ Orphan Drug Incentives: Waxman

Former Rep. Henry Waxman (D-CA) says that some of the financial incentives under the Orphan Drug Act and the Waxman-Hatch Act have resulted in financial windfalls for drug companies and may no longer be needed. Waxman offered his assessment in an online Kaiser Health News video interview.

He noted that when the Orphan Drug Act was passed in 1983, it was needed because drug companies didn’t see any profit potential in producing treatments for very small patient populations. He said the law provided “very strong incentives for drug development,” including a seven-year exclusivity for drugs receiving orphan drug designation.

But, he said, manufacturers are now trying to qualify many more products as orphan drugs so they can charge a “monopoly price.” He said the companies realize that if the small patient populations that need orphan drugs have insurance, “they can charge exorbitantly high prices and the insurance will pay for it. In fact, these drugs are now profitable and are not orphans anymore.”

Waxman said he is concerned that individuals may not be able to afford their drugs but also is concerned about the impact on government and private payors who pass on the high charges.

When the interviewer indicated that 47% of all new drugs approved by FDA last year received an orphan designation, Waxman said that while the companies had all made a case to FDA to justify the designation, some percentage of them are being sold for other uses to large patient populations and still get the benefit of the orphan drug incentives.

“The Orphan Drug Act and the Waxman-Hatch Act have been used in a way to help companies raise prices to very high levels,” he said. “We need to rethink this because some of the incentives may no longer be needed.”

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Gupta Raises Concerns About Overton’s Independence, Ideology

Overton Confirmation Remains Uncertain After Senate Hearing

FDA Classifies Boston Scientific Imager II Catheter Recall as Class I

FDA Approves Gazyva for Childhood-Onset Idiopathic Nephrotic Syndrome