Policy process lessons from the Orphan Drug Act: applications for health policy advocates
| Date | 02 November 2015 |
| DOI | https://doi.org/10.1108/JEPP-12-2013-0052 |
| Published date | 02 November 2015 |
| Pages | 278-297 |
| Author | Barbara Andraka-Christou |
| Subject Matter | Strategy,Entrepreneurship,Business climate/policy |
Policy process lessons from the
Orphan Drug Act: applications
for health policy advocates
Barbara Andraka-Christou
Maurer School of Law, Indiana University, Bloomington, Indiana, USA
Abstract
Purpose –The Orphan Drug Act has provided the pharmaceutical industry with incentives to
research and develop drugs for orphan diseases: rare diseases with little profit potential. It is
considered very successful legislation by legal scholars, the Food and Drug Administration (FDA), and
orphan drug activists. The policy process of the Act provides an important model of the policy process
for future incentive-based pharmaceutical legislation. The purpose of this paper is to summarize the
important incentives of the Act and the historical events leading up to the Act. The paper applies three
different theoretical models of the public policy process to understand the emergence of the Orphan
Drug Act: Kingdon’s Multiple Streams Model, the Advocacy Coalition Framework, and Social
Constructionism Theory. The paper then synthesizes the public policy process lessons from
each perspective and provides four recommendations for other social activists seeking to propel
incentive-based pharmaceutical legislation for under-researched diseases.
Design/methodology/approach –The author analyzes the history of the Orphan Drug Act based
on publicly available scholarly research, government documents, and interest group publications. The
author then applies three public policy theories to the history of the Orphan Drug Act to explain the
emergence of the Act and to extract policy process lessons for future disease activists.
Findings –Regardless of which theoretical perspective the Orphan Drug Act is analyzed from, some
common themes of the policy process emerge. First, focussing eventsare instrumental in capturing the
public’s sympathyand Congress’s attention. Second,in its activities and proposed legislation, a coalition
shouldprovide a role for all relevantand important actors. Third,the target groups of the legislationwere
construed positively, increasing the pressure for Congressmen to pass some kind of bill. Finally, the
proper construction of “the problem”is instrumental to passing effective legislation as a “solution.”
Originality/value –The Orphan Drug Act is widely considered successful incentive-based
pharmaceutical legislation. However, because it was originally passed in 1983 and has not had public
attention since the early 1990s (when it was amended), it has rarely been written about in recent years.
However, its lessons are still highly relevant to policy activists, especially disease activists.
Furthermore, existing articles focus on the impact of the legislation and ways to amend it, rather than
on the passage of the Act.
Keywords Incentives, Government regulation, Orphan Drug Act, Pharmaceutical regulation,
Policy process, Rare diseases
Paper type Conceptual paper
1. Introduction
The Orphan Drug Act is widely considered to be very successful incentive-based
pharmaceutical legislation (US Department of Health & Human Services (DHHS), 2001).
It has improved the lives of millions of people with rare diseases by providing the
pharmaceutical industry with incentives to research and develop drugs for orphan
diseases: rare diseases with little profit potential. Orphan diseases are aptly named,
because prior to 1983 few pharmaceutical companies would “adopt”their cause. The
Orphan Drug Act of 1983 provided important financial incentives for pharmaceutica l
companies to invest in research and development (“R&D”) for the treatment of orphan
diseases (US DHHS, 2001).
Journal of Entrepreneurship and
Public Policy
Vol. 4 No. 3, 2015
pp. 278-297
©Emerald Group Publishing Limited
2045-2101
DOI 10.1108/JEPP-12-2013-0052
Received 29 December 2013
Revised 15 September 2014
Accepted 17 September 2014
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/2045-2101.htm
278
JEPP
4,3
The story of how the Orphan Drug Act emerged should be studied not merely out of
historical interest, but because it provides an important model of an effective policy
process for health advocacy groups today. For example, patient activist groups could
use the policy process lessons of the Orphan Drug Act to encourage incentive-based
legislation for R&D into treatments for under-researched diseases, such as drug
addiction and Alzheimer’s disease.
The paper will apply three different theories of the public policy process to
understand the emergence of the Orphan Drug Act. Part B introduces the Act’s most
important provisions and the historical events leading up to the Act. Part C introduces
and applies Multiple Streams Theory, the Advocacy Coalition Framework, an d Social
Constructionism Theory to explain the emergence of the Act. Part D concludes by
briefly synthesizing the public policy process lessons learned from the application of
each of these theories.
2. Background: the Orphan Drug Act of 1983
2.1 Important provisions of the Act
Orphan diseases are rare diseases that affect less than 200,000 patients in the USA.
In the aggregate, approximately 20 million Americans suffer from rare diseases. Th ere
are about 6,000 rare diseases in the USA, many of which are genetic disorders or
cancers (US DHHS, 2001).
According to the FDA, the Orphan Drug Act “has unquestionably stimulated the
development of drugs for rare diseases”(US DHHS, 2001, p. 7). Since the Act’s passa ge,
the FDA has awarded more than 1,000 orphan drug designations and approved more
than 200 products. The Act has also spurred the biotechnology industry, which is
young, volatile, and heavily dependent on private funding. Biotechnology companies
often focus R&D on treatment for rare genetic diseases that qualify for orphan status.
The Act has made it easier for biotechnology start-up firms to obtain venture capital,
because venture capitalists are assured of the firm’s market exclusivity potential
(US DHHS, 2001).
The Orphan Drug Act provides mul tiple types of financial incent ives to
pharmaceutical companies. First, and most importantly, it provides a seven-year
marketing exclusivity to the first corporation (“sponsor”) to market an orphan drug
with a new active ingredient. The marketing exclusivity period is provided whether or
not the drug is patented. During the exclusivity period, no other drug for the same
disease with the same active ingredient may be approved by the FDA, unless the holder
of the exclusivity either cannot produce sufficient quantities or gives its consent to
allow another corporation to market the product. Second, the Act provides a 50 percent
tax credit for R&D-related expenses[1]. Third, the Act provides numerous grants for
R&D into orphan diseases. Fourth, the Act eases regulatory hurdles at the FDA. If the
disease is terminal, then the sponsor may also seek expedited FDA approval[2]. Finally,
sponsors can request protocol and study design assistance from the FDA. The FDA
keeps a publically accessible record of companies that have received orphan drug
designations and approval (Villarreal, 2001).
2.2 Important events prior to the passage of the Act
The Orphan Drug Act was signed into law on January 4, 1983. The catalyst of the Act’s
creation and passage was public pressure stemming from two main sources: the
National Organization for Rare Diseases (“NORD”) and an episode on the television
show Quincy, M.E. in March 1981 (Pulsinelli, 1999).
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Lessons from
the Orphan
Drug Act
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