By Edward J. Buthusiem & Gary F. Miller, Jr.
Providing incentives to spur the development of new and novel drugs to combat rare diseases has historically posed a challenge to drug manufacturers, the FDA, the medical community, and—most important—patients afflicted with these diseases. Given the high and ever-increasing costs and challenges of drug development, combined with the relatively small number of patients that would be eligible to receive such treatments—which limits a company’s ability to recoup its R&D investment—pharmaceutical manufacturers have struggled with the economics of rare-disease drug development. The Orphan Drug Act, passed in 1983, was designed to address these concerns by providing incentives for pharmaceutical companies to develop drugs for uses for rare disorders or conditions. While the act was well intended, its application in practice has generated speed bumps as companies try to navigate through the waters of government reimbursement programs applicable to these drugs, as well as an unpredictable and often inconsistent DOJ enforcement pattern.