President Trump recently signed a wide-ranging executive order urging Congress to amend a crucial provision of a Biden-era law governing Medicare drug price negotiations, with the administration’s aim being to lower prices without kneecapping pharmaceutical industry investments in the research and development of innovative new drugs.
The executive order marks this administration’s first health-policy intervention in the Inflation Reduction Act (IRA), President Biden’s signature legislative accomplishment that, when passed by Congress and signed into law in 2022, enabled Medicare—the U.S. government—to negotiate the price of certain drugs for the first time in history.
But lowering drug prices while also maintaining incentives for drug manufacturers to continue investing the billions required to research and develop a single new drug is a tall order, with even the White House admitting it will need Congress to succeed.
Indeed, to promote innovation and improve quality of care, Congress will also need to pass theORPHAN Cures Act, a bipartisan bill that would remove barriers to developing new medicines for the 30 million some Americans—one in every 10—living with a rare disease, half of whom diagnosed are children.
In the United States, a disease is considered rare if it affects fewer than 200,000 people. When it costs pharmaceutical companies $2 billion, on average, to bring a new drug to market for any condition, that makes researching and developing new rare-disease treatments potentially cost prohibitive and uniquely challenging.
Of the more than 10,000 known rare diseases, less than 10% have an FDA-approved treatment.
That is why, of the more than 10,000 known rare diseases, less than 10% have an FDA-approved treatment. It is also why rare-disease treatments are considered “pharmaceutical orphans,” as they are often left without sufficient support or investment, or abandoned altogether. Hence the moniker, “orphan drugs.”
To address this problem, Congress enacted the Orphan Drug Act of 1983, providing critical incentives to drug manufacturers—like seven years of market exclusivity and clinical trial tax credits—to spur investment. Since then, the FDA has approved more than 1,300 treatments and cures for rare diseases, up from just 38 before the law was enacted.
With the IRA’s passage, Congress sought to safeguard this progress by excluding orphan drugs from the law’s Medicare Drug Price Negotiation Program. The problem with this exclusion is that it applies only to orphan drugs with a single approved use.
The IRA inadvertently but unavoidably disincentivizes drug manufacturers from investigating additional potential uses for orphan drugs.
So, if an orphan drug is used to treat only one rare disease, it is not subject to Medicare price negotiations. But the moment a manufacturer starts to explore a second potential use —even if still unproven—the orphan drug loses its IRA exemption status, and its price can be negotiated. As a result, the IRA inadvertently but unavoidably disincentivizes drug manufacturers from investigating additional potential uses for orphan drugs.
That’s anathema to scientific inquiry and innovation, which hinges on the relentless testing and retesting of hypotheses. It’s also life-threatening.
Of the approximately 280 new orphan drugs approved by the FDA between 2003 and 2022, nearly one-quarter were approved for at least one follow-on use for another rare disease. In the oncology space alone, cancer therapies account for 92% of orphan drugs’ secondary uses.
While expanding access to affordable drugs is important, it is only possible if new treatments are developed in the first place.
While expanding access to affordable drugs is important, it is only possible if new treatments are developed in the first place. For the vast majority (over 90%) of rare diseases lacking FDA-approved treatments, reducing barriers to R&D investment must remain the priority—especially when reducing these barriers would require remarkably modest investment.
It would cost less than 1% of projected savings from the Medicare Drug Price Negotiation Program to enact ORPHAN Cures.
Indeed, according to new research, it would cost less than 1% of projected savings from the Medicare Drug Price Negotiation Program to enact ORPHAN Cures.
We cannot afford to let this critical legislation become an orphan bill, forgotten and stalled in committee.
We cannot afford to let this critical legislation become an orphan bill, forgotten and stalled in committee. The time for Congress to act is now.
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Paul T. Kim is a lawyer, veteran health policy advisor, and formerly counsel to the late Senator Edward M. Kennedy and Congressman Henry A. Waxman. He currently serves as a consultant advisor to the National Organization for Rare Disorders and the Sjögren’s Foundation, is a board member of the Friends of Cancer Research, and has represented innovative companies and patient advocacy groups before the FDA, CMS, HHS ASPR/BARDA, and Congress.
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