It’s time to ensure that we also render it illegal,” says study co-author Michael Daniel, a research fellow in the Department of Surgery at Johns Hopkins. “This is a financially toxic practice that is also unethical. After FDA approval, however, some such drugs are marketed and used off label far more broadly, thus turning large profits. Makary says companies exploit the law by initially listing only a single indication for a drug’s use - one narrow enough to qualify for “orphan” disease benefits.
In addition, the Food and Drug Administration (FDA) can grant companies seven years of marketing exclusivity for an orphan drug to ensure they recoup the costs of research and development. Under the terms of the act, companies can receive federal taxpayer subsidies of up to half a million dollars a year for up to four years per drug, large tax credits and waivers of marketing application fees that can cost more than $2 million. However, the authors say, the law has also invited abuse.
The authors point out that legislation has accomplished that mission and sparked the development of lifesaving therapies for a constellation of rare disorders, including cystic fibrosis, muscular dystrophies and certain pediatric cancers. The 1983 act was designed to encourage drug companies to develop treatments for so-called orphan diseases that would be unprofitable because of the limited market. “As a result, funding support intended for rare disease medicine is diverted to fund the development of blockbuster drugs.” “The industry has been gaming the system by slicing and dicing indications so that drugs qualify for lucrative orphan status benefits,” says author Martin Makary, M.D., M.P.H., professor of surgery at Johns Hopkins and a prominent health-care quality and safety expert. Yet many of these drugs, the authors say, end up being marketed for other, more common conditions, generating billions in profits. 19 in the American Journal of Clinical Oncology, the authors argue that pharmaceutical companies are exploiting gaps in the law by claiming “orphan” status-a designation meant to encourage the development of drugs for rare diseases that affect fewer than 200,000 people in the United States. Health experts at Johns Hopkins Medicine are calling on lawmakers and regulators to close loopholes in the Orphan Drug Act they claim give drug companies millions of dollars in unintended and misplaced subsidies and tax breaks and fuel skyrocketing medication costs. Hopkins researchers: Close “orphan” drug loophole! - Click to Tweet.Gaps in rare-disease law allow pharma to game the system.Seven of 10 best-selling drugs in 2014 had “orphan” designation.
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