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FAIRNESS IN ORPHAN DRUG EXCLUSIVITY
Mr. PALLONE. Madam Speaker, pursuant to House Resolution 403, I call up the bill (H.R. 1629) to amend the Federal Food, Drug, and Cosmetic Act with respect to limitations on exclusive approval or licensure of orphan drugs, and for other purposes, and ask for its immediate consideration in the House.
The Clerk read the title of the bill.
The SPEAKER pro tempore (Ms. Jackson Lee). Pursuant to House Resolution 403, the bill is considered read.
The text of the bill is as follows:
H.R. 1629
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Fairness in Orphan Drug Exclusivity Act''.
SEC. 2. LIMITATIONS ON EXCLUSIVE APPROVAL OR LICENSURE OF
ORPHAN DRUGS.
(a) In General.--Section 527 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360cc) is amended--
(1) in subsection (a), by striking ``Except as provided in subsection (b)'' and inserting ``Except as provided in subsection (b) or (f)''; and
(2) by adding at the end the following:
``(f) Limitations on Exclusive Approval, Certification, or License.--
``(1) In general.--For a drug designated under section 526 for a rare disease or condition pursuant to the criteria set forth in subsection (a)(2)(B) of such section, the Secretary shall not grant, recognize, or apply exclusive approval or licensure under subsection (a), and, if such exclusive approval or licensure has been granted, recognized, or applied, shall revoke such exclusive approval or licensure, unless the sponsor of the application for such drug demonstrates--
``(A) with respect to an application approved or a license issued after the date of enactment of this subsection, upon such approval or issuance, that there is no reasonable expectation at the time of such approval or issuance that the cost of developing and making available in the United States such drug for such disease or condition will be recovered from sales in the United States of such drug, taking into account all sales made or reasonably expected to be made within 12 years of first marketing the drug; or
``(B) with respect to an application approved or a license issued on or prior to the date of enactment of this subsection, not later than 60 days after such date of enactment, that there was no reasonable expectation at the time of such approval or issuance that the cost of developing and making available in the United States such drug for such disease or condition would be recovered from sales in the United States of such drug, taking into account all sales made or reasonably expected to be made within 12 years of first marketing the drug.
``(2) Considerations.--For purposes of subparagraphs (A) and (B) of paragraph (1), the Secretary and the sponsor of the application for the drug designated for a rare disease or condition described in such paragraph shall consider sales from all drugs that--
``(A) are developed or marketed by the same sponsor or manufacturer of the drug (or a licensor, predecessor in interest, or other related entity to the sponsor or manufacturer); and
``(B) are covered by the same designation under section 526.
``(3) Criteria.--No drug designated under section 526 for a rare disease or condition pursuant to the criteria set forth in subsection (a)(2)(B) of such section shall be eligible for exclusive approval or licensure under this section unless it met such criteria under such subsection on the date on which the drug was approved or licensed.''.
(b) Rule of Construction.--The amendments made in subsection (a) shall apply to any drug that has been or is hereafter designated under section 526 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360bb) for a rare disease or condition pursuant to the criteria under subsection
(a)(2)(B) of such section regardless of--
(1) the date on which such drug is designated or becomes the subject of a designation request under such section;
(2) the date on which such drug is approved under section 505 of such Act (21 U.S.C. 355) or licensed under section 351 of the Public Health Service Act (42 U.S.C. 262) or becomes the subject of an application for such approval or licensure; and
(3) the date on which such drug is granted exclusive approval or licensure under section 527 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360cc) or becomes the subject of a request for such exclusive approval or licensure.
SEC. 3. DETERMINATION OF BUDGETARY EFFECTS.
The budgetary effects of this Act, for the purpose of complying with the Statutory Pay-As-You-Go Act of 2010, shall be determined by reference to the latest statement titled
``Budgetary Effects of PAYGO Legislation'' for this Act, submitted for printing in the Congressional Record by the Chairman of the House Budget Committee, provided that such statement has been submitted prior to the vote on passage.
The SPEAKER pro tempore. The bill shall be debatable for 1 hour equally divided and controlled by the chair and ranking minority member of the Committee on Energy and Commerce.
The gentleman from New Jersey (Mr. Pallone) and the gentlewoman from Washington (Mrs. Rodgers) each will control 30 minutes.
The Chair recognizes the gentleman from New Jersey.
General Leave
Mr. PALLONE. Madam Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and add extraneous material on H.R. 1629, the Fairness in Orphan Drug Exclusivity Act.
The SPEAKER pro tempore. Is there objection to the request of the gentleman from New Jersey?
There was no objection.
Mr. PALLONE. Madam Speaker, I yield myself such time as I may consume.
I rise in support of H.R. 1629, the Fairness in Orphan Drugs Exclusivity Act, a bill that will help make some prescription drugs more affordable for the American people.
This Democratic Congress is committed to lowering the costs of prescription drugs so that families are no longer forced to choose between paying for a lifesaving drug or food and rent. This legislation today, H.R. 1629, closes the loophole that has blocked patients from accessing cheaper generic drugs.
Last Congress, this legislation passed the Energy and Commerce Committee and the House by voice vote. Last week, it garnered support from a large majority in the House but not the two-thirds necessary to pass under suspension of the rules. And so, we are here again today to debate and pass H.R. 1629 that will help us address two national crises: first, the soaring costs of prescription drugs; and second, the ongoing opioid epidemic.
Madam Speaker, this legislation does that by closing a very narrow but real loophole in a program known as the orphan drug program. This program was created through the Orphan Drug Act, which has been successful in basically doing more research and discovery of new therapies to treat and even cure rare diseases. The law incentivizes the development of these lifesaving therapies by awarding 7 years of market exclusivity to manufacturers who receive orphan drug status.
There are two ways that manufacturers can receive these incentives. The first is when manufacturers develop drugs approved to treat diseases with patient populations of 200,000 or fewer. And the second way is if the manufacturer believes that the research and development costs are not expected to be recouped by sales of the underlying drug. This is known as the cost recovery pathway. It is rarely used, but unfortunately, it has led to manufacturers sometimes inappropriately receiving additional exclusivity and, therefore, delaying lower cost generics from coming to the market.
For example, under certain circumstances, if a manufacturer receives orphan drug status for one drug, that status and its incentives can be passed on to future drugs if those drugs treat the same condition and have the same active ingredient. The status and incentives would be available even if those future drugs do not meet the orphan drug qualifications.
What this means, Madam Speaker, is that future drugs can benefit from the 7 years of market monopoly without having to demonstrate that the drug will treat a population of 200,000 or fewer or that they may not be able to recoup the costs of producing the drug.
As a result of this loophole, some manufacturers are marketing widely used drugs to large populations while also blocking generic competition from coming to market.
Now, if I can give an egregious example of this, it comes from one of our most effective drugs to combat opioid use disorder. In 1994, an oral formulation of buprenorphine was granted orphan drug status. At the time, it was not expected that the drug would be prescribed frequently, and as a result, it was unlikely the manufacturer would recoup its development costs. More than 20 years later, however, in 2017, the same manufacturer developed a new injectable formulation of the same drug with the same active ingredient to treat the same condition. As a result, the manufacturer was able to prevent cheaper generics from coming to market.
But by 2017, the opioid epidemic worsened. Our response to the crisis evolved, and millions were eventually prescribed buprenorphine for treatment, generating billions of dollars in sales.
We know that buprenorphine was not an orphan drug as the law envisions. Nevertheless, the new injectable drug was automatically granted orphan drug status and exclusivity based on the original oral drug's orphan drug designation. This delayed the cheaper generic treatments for opioid use disorder from coming to market, and it kept the price of the drug high and limited access for those in need of treatment.
While the FDA eventually recognized this issue with this particular drug and revoked its orphan drug designation, its exclusivity delayed generic competition that otherwise would be on the market today.
The bottom line is, Madam Speaker, we need every tool available to combat the opioid epidemic, including low-cost, affordable medication treatments, and loopholes like this have to be closed.
H.R. 1629 would stop this from happening again in the future. It requires drug manufacturers to demonstrate in their application to the FDA that each drug application considered under the Orphan Drug Act cost recovery pathway would be unable to recoup development costs at the time of approval. This would include all drugs that seek the orphan drug designation under the cost recovery pathway, including the injectable buprenorphine example I just described. The bill would also ensure that these rules apply to drugs already on the market, so no drug manufacturers can claim orphan drug status without first meeting this requirement.
Now, I want to explain, because I know this is complicated, this bill is narrowly tailored to fix a narrow but very real loophole in the law. We cannot allow these manufacturers to game the system any longer, and that is why we have to close this loophole today.
I thank Congresswoman Dean, who is the sponsor of the bill. The merits of this bill are obvious, and I know she is going to talk about it more, but that is why it has received strong bipartisan support. I am confident that it will once again get bipartisan support today, make its way through the Senate, and the President will sign it.
I regret that we were not able to pass this legislation last week under suspension, but I believe that we will come together today to close this loophole. I thank our ranking member of the full committee, Mrs. Rodgers, for all of her help with this.
Madam Speaker, I reserve the balance of my time.
Mrs. RODGERS of Washington. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, I rise today in support of H.R. 1629, the Fairness in Orphan Drug Exclusivity Act.
The Orphan Drug Act was enacted to incentivize the development of drugs that treat rare diseases. Products designated as orphan drugs may be entitled to 7 years of market exclusivity, meaning a drug produced by another manufacturer that contains the same active ingredient to treat the same condition is barred from entering the market during this time.
However, we have seen in recent years that some drug manufacturers, in an effort to block competition from the market, have tried to take advantage of a loophole in existing law. H.R. 1629 will close this loophole and prevent potential abuse of this program in the future.
We must preserve incentives to innovate, especially for drugs that treat rare diseases, while preventing bad actors from attempting to exploit those incentives to benefit from a national crisis, as was done during the opioid epidemic.
This legislation strikes that careful balance. This bill garnered both Republican and Democrat support last Congress. I hope we can continue to work together to move H.R. 1629 forward in the future on a bipartisan basis.
Madam Speaker, I reserve the balance of my time.
Mr. PALLONE. Madam Speaker, I yield such time as she may consume to the gentlewoman from Pennsylvania (Ms. Dean), the sponsor of this bill.
I commend her for all the work she has done on this bill. This has been several Congresses now, and we are hoping this will be the final one where we get this bill passed.
Ms. DEAN. Madam Speaker, I thank Ranking Member Rodgers and Chairman Pallone for their leadership on this bill.
I, once again, rise in support of H.R. 1629, the Fairness in Orphan Drug Exclusivity Act.
This crucial legislation would close a current loophole that is used to block competition in the pharmaceutical marketplace.
The Orphan Drug Act of 1983 provided incentives for prescription drug manufacturers to develop products to treat rare diseases. This includes an exclusive 7-year marketing right for therapies that receive an orphan drug designation.
For a drug to qualify, it must either be a treatment for a disease or condition that affects fewer than 200,000 people in the United States or a drug intended for diseases that there is no reasonable expectation to recoup research and development costs.
It would require all drug manufacturers who obtain orphan drug status to prove that they have no reasonable expectation that they will recover R&D costs.
This legislation works to prevent companies from continuing to use orphan drug exclusivity status for a newly approved drug with an identical ingredient to the former version without having to prove the inability to recoup costs.
This exact circumstance, as the chairman described, happened when a manufacturer of a buprenorphine product tweaked an older product that had received orphan drug status and subsequently was given a renewed orphan drug exclusivity.
Buprenorphine is used as a treatment for opioid use disorder to help those recovering from addiction. Unfortunately, at the time, the opioid epidemic was raging, as it is today, and was by no means a rare disease. And the drug was by no means a market loser. It was a moneymaker.
Closing this loophole would ensure that products do not receive an unfair market advantage and will get more affordable drugs to patients. It ensures consistency with the spirit and intent of the Orphan Drug Act.
Know that we want to encourage and support the development of rare disease treatments and therapeutics. It is critically important. But we cannot allow this important incentive to be co-opted to allow for unfair market competition for drugs that are not a commercial loss.
This bill was supported unanimously last Congress and has broad support among patient advocates. This bill is about ensuring market competition, reducing barriers to the development of new treatments, and, ultimately, supporting patients.
Madam Speaker, I include in the Record a letter from 16 patient advocacy organizations in support of this legislation.
March 9, 2021.Re H.R. 1629--The Fairness in Orphan Drug Exclusivity Act.
Hon. Madeleine Dean,Washington, DC.Hon. Marc Veasey,Washington, DC.
Dear Representatives Dean and Veasey:
Thank you for your leadership on the reintroduction of H.R. 1629, The Fairness in Orphan Drug Exclusivity Act. Our nation is in crisis. Each day, 130 Americans die from an opioid overdose, and according to recent provisional data from the Centers for Disease Control and Prevention, between June 2019 and May 2020, the number of people who died of an opioid overdose increased by 38.4%.
We have a responsibility to ensure that all treatment options are made available to those living with opioid use disorder {OUD). Last year, this important legislation was approved by the House of Representatives unanimously. Unfortunately, the Senate was unable to also act on the measure before the 116th Congress adjourned. The new Congress now has an opportunity to pass this legislation swiftly and improve access to life-saving medication assisted treatments and prevent more lives from being lost. We, the undersigned organizations, support H.R. 1629 and urge quick passage of this important bill that will help ensure the availability of vital treatment options for OUD that can save American lives.
The Orphan Drug Act, enacted in 1983, allows the Food and Drug Administration (FDA) to grant manufacturers Orphan Drug Designation (ODD) and Orphan Drug Exclusivity (ODE) to a product developed to treat rare diseases and conditions affecting less than 200,000 patients. In addition, a manufacturer also can qualify for ODD and ODE if more than 200,000 patients are affected, but there is ``no reasonable expectation'' of recovering development costs. Few know about this option, and as a result it is exceedingly rare with only three uses to date.
In such cases, if a newly approved product has the same active ingredient as a previous product that received orphan designation and exclusivity because the FDA determined the original drug could not recoup its development costs, the newly approved product does not have to demonstrate the inability to recoup its development costs. It does not matter how much time has passed, or how much money the newly approved drug is predicted to make. This loophole creates the potential for abuses within the system, and it is not consistent with intent of the Orphan Drug Act.
Enacting H.R. 1629 will: fix this loophole in a narrow and targeted manner to prevent this abuse of the Orphan Drug Act; preserve incentives for development of products treating rare diseases and conditions; and ensure new treatment options come to market to treat OUD.
During this public health emergency, we need all the tools we can muster to fight this crisis. We should not tie one hand behind our back as the exploitation of this loophole would do.
More than 2.1 million Americans live with OUD, making this disease far from rare. This disease is a national public health emergency, and we need to close this loophole to ensure that all safe and effective treatments are available to fight this disease. Thank you again for your leadership on this issue, and we look forward to working with you to help pass H.R. 1629.
Sincerely,
Advocates for Opioid Recovery, AIDS United, Aimed
Alliance, Daniel's story, Center for U.S. Policy,
Cover2 Resources, FORCE, Healthy Women, Maryland Heroin
Awareness, Mother's Addiction Journey, No More OD's,
Inc., NOPE Task Force, Prevention Action Alliance,
Shatterproof, Tyler's Light, Young People in Recovery.
Ms. DEAN. Madam Speaker, I include in the Record the Statement of Administration Policy issued by the Office of Management and Budget on May 17 of this year in support of this bill.
Statement of Administration Policy
H.R. 1629--Fairness in Orphan Drug Exclusivity Act--Rep. Dean, D-
Pennsylvania, and two cosponsors
The Administration supports House passage of H.R. 1629, the Fairness in Orphan Drug Exclusivity Act. Orphan drug status is intended to encourage companies to develop promising drugs for rare diseases. Current law provides market exclusivity for drugs that treat any disease or condition which (A) affects fewer than 200,000 persons in the United States, or
(B) affects more than 200,000 in the United States and for which there is no reasonable expectation that the cost of developing and making available in the United States a drug for such disease or condition will be recovered from that drug's sales in the United States. H.R. 1629 affects only drugs that qualify under the latter provision. Current law allows market exclusivity to be extended for a new version of the same drug without the drug developer having to show a lack of profitability for that new version as well. This legislation would close that loophole, requiring all drugs that obtain seven years of market exclusivity for conditions affecting 200,000 or more people to illustrate that they have no reasonable expectation of recovering R&D costs through U.S. sales.
The Administration applauds these steps to ensure Americans have access to high quality, affordable treatments.
Ms. DEAN. Madam Speaker, I thank Chairman Pallone for his support on this bill, and I urge all members to support its passage.
Mrs. RODGERS of Washington. Madam Speaker, I yield back the balance of my time.
Mr. PALLONE. Madam Speaker, I would ask for support for this bill from both sides of the aisle. As I have mentioned in the past, it has passed the House previously.
Madam Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. All time for debate has expired.
Pursuant to House Resolution 403, the previous question is ordered on the bill.
The question is on the engrossment and third reading of the bill.
The bill was ordered to be engrossed and read a third time, and was read the third time.
The SPEAKER pro tempore. The question is on passage of the bill.
The question was taken; and the Speaker pro tempore announced that the ayes appeared to have it.
Mrs. GREENE of Georgia. Madam Speaker, on that I demand the yeas and nays.
The SPEAKER pro tempore. Pursuant to section 3(s) of House Resolution 8, the yeas and nays are ordered.
Pursuant to clause 8 of rule XX, further proceedings on this question are postponed.
____________________
SOURCE: Congressional Record Vol. 167, No. 87
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