Some of the best-selling drugs in the U.S. have stacked up extra federal protections that were initially intended to spark research into drugs that couldn’t make money on their own.
Why it matters: Some experts fear that these additional protections could help shield blockbuster drugs from cheaper competitors.
How it works: Federal law gives drug companies an extra incentive to research treatments for “orphan” diseases — conditions that affect fewer than 200,000 people and thus don't present a compelling business opportunity for drugmakers.
- If a drug treats an orphan disease, it can get 7 years of additional market exclusivity, free from generic competitors, for that use.
By the numbers: 6 of the 8 best-selling biologic drugs in 2017 have orphan approvals, and 3 — Humira, Rituxan and Avastin — still have extra exclusivity for some of those uses.
Between the lines: Most of these drugs don’t yet face competition from biosimilars — which are similar to generics, but aren’t automatically interchangeable at the pharmacy counter.
- Some experts fear, however, that even once there’s a competitive biosimilars market in the U.S., these orphan approvals will give biologics a leg up — even though these orphan approvals don't legally bar biosimilars from competing on other uses.
- “I think it really is all about...being able to maintain your market share for the orphan indication as well as the indication for which your product is being used…it just might make it less likely that competitors come onto the market,” Vanderbilt's Stacie Dusetzina said.
The other side: Drugmakers say that’s not the case.
- "These exclusivities will not prevent Humira biosimilars from entering the market. In fact, biosimilars will enter the market for the non-orphan indications two years before the latest Humira orphan-designated indication exclusivity expires," said MK Steel, a spokeswoman for AbbVie, which makes Humira, the world’s best-selling drug.
- "We’re proud to have studied [Remicade] in orphan indications. These are small populations with large unmet need," said Linda Davis, a Janssen spokeswoman, adding that all of Remicade's orphan exclusivity periods have expired.
In the end, it’ll be up to insurance companies and providers to decide whether an orphan approval makes a biologic more desirable than a biosimilar, even for the non-orphan uses that drive most sales.
- “It may be giving already marketed drugs a commercial advantage...but that’s why we have payers and [pharmacy benefit managers]. They're supposed to be negotiating,” Food and Drug Administration Commissioner Scott Gottlieb said.
What’s next: Some critics say drugs that are already raking billions shouldn’t be able to rack up so much extra protection in the first place. And change may be coming.
- “For a drug that’s already on the market, maybe you don’t need as much incentive to study a subsequent indication," Gottlieb said. "Maybe we make the designation harder to get.”
- “I think with these big established drugs, there needs to be a streamlined way of giving enough incentive for it to be used in a smaller population, but not necessarily the system that we have now," said Ted Okon, executive director of the Community Oncology Alliance.
The bottom line: “These are examples of drugs where the financial returns absolutely appear to be there," Dusetzina said. “They’re not meeting the spirit of the law, even if they’re technically meeting the letter of the law.”