A Bitter Battle Over the ‘Orphan Drug’ Program Leaves Patients’ Pocketbooks at Risk

A prescription drug that helps Lore Wilkinson walk and talk despite a rare muscle disease cost her so little for more than a decade that she didn’t even use her insurance to pay for it. But now, her Medicare insurance is shelling out about $40,000 for a one-month supply of the drug, and she fears she’ll be slammed with a $9,000 copayment.

“Who can afford that?” said the 91-year-old, who lives in Rochester, Minnesota. (Her first name is pronounced LOR-ee.)

Wilkinson, like millions of other people with rare diseases nationwide, is caught up in an ongoing legal and political debate about how the U.S. supports pharmaceutical companies and their research. The FDA made its latest move in the tug of war in late January by saying it would largely ignore a U.S. court ruling involving Firdapse, the drug Wilkinson needs.

Firdapse was approved in 2018 by the FDA as an “orphan drug,” a designation that rewards drug companies for developing treatments for rare diseases. When a drugmaker wins approval for an orphan drug, the company is entitled to seven years of exclusive rights to the marketplace, which means the FDA won’t approve another company’s application for a competitive drug for the same use during that period.

But after the 11th U.S. Circuit Court of Appeals denied a motion in early 2022, the FDA stopped reviewing applications for certain drugs or handing out exclusivity, agency spokesperson April Grant said. The delay left drugmakers in limbo.

Often, drugs granted exclusivity are among the highest priced in the U.S. market. For example, Zolgensma, a one-time treatment for spinal muscular atrophy, carries a $2.25 million price tag. Mary Carmichael, a spokesperson for its manufacturer, Novartis, said Zolgensma has treated more than 3,000 patients globally and nearly all U.S. patients taking the drug as approved by the FDA are covered by commercial or government insurance.

The company also continues to invest in research and development as well as clinical studies for the drug to reach more patients, Carmichael said. Most drugs enter the U.S. market armed with a variety of patents and intellectual property protections that stave off competition and allow drugmakers to set prices as they see fit. For drugs that treat rare diseases, the seven years of market exclusivity is part of that armor.

A year’s supply of Catalyst Pharmaceuticals’ Firdapse, which Wilkinson takes to treat her Lambert-Eaton myasthenic syndrome, or LEMS, sells for about $375,000 after discounts, said Catalyst spokesperson David Schull. He said the company has financial assistance programs and donates to charitable foundations to help those in need. The goal, Schull said, “is that no LEMS patient is ever denied access to medication for financial reasons.”

Catalyst was granted exclusive market rights for Firdapse in 2018, which meant that Wilkinson and other LEMS patients could no longer get a similar drug from another company free of charge.

In 2019, amid a patient uproar about the cost, which Sen. Bernie Sanders weighed in on, the FDA granted another company, Jacobus Pharmaceutical, the right to market a competitive product for a subset of pediatric patients.

Then Catalyst filed suit against the federal government, contending it had rights to be the exclusive provider for all LEMS patients, regardless of age. The case, Catalyst Pharmaceuticals Inc. v. Becerra, had potentially “far-reaching implications,” wrote Grant, the FDA spokesperson, in an email to KHN. The court’s decision also “raised several novel questions,” she said.

The 11th Circuit sided with Catalyst in September 2021. But the FDA’s recent move to effectively disregard the court’s decision is “in the best interest of public health, rare disease patients and rare disease product development,” Grant wrote.

Still, the multiyear saga highlights lingering questions about orphan drug exclusivity and how the FDA’s policies may influence drug prices. At issue is the Orphan Drug Act, a 1980s-era law that incentivizes drug companies to research and develop rare-disease drugs. And it’s not the first time the orphan drug program has raised concerns.

For decades, the FDA has overseen a two-step process: A drug is first granted an orphan designation because it shows promise to treat a rare disease or condition. Then, once the pharmaceutical company studies and develops the rare-disease drug, the FDA approves its use and awards seven-year market exclusivity, preventing competition.

That final step, granting exclusivity, was in the spotlight in Catalyst’s lawsuit against the FDA. Since the Orphan Drug Act was created, the FDA’s staff routinely handed out exclusivity to companies for orphan drugs that treat a subset of patients, such as pediatrics. The goal was to make sure pharmaceutical companies didn’t get total market control for a drug after doing studies on only the “smallest, easiest-to-study populations,” the agency wrote on its website.

The Catalyst court decision could hurt children, agency officials wrote.

George O’Brien, a partner at Mayer Brown who represents companies regarding the FDA and regulatory practices, said he agreed with the FDA’s decision and its long-term strategy of parceling out exclusivity because a drug’s sales “should be limited to what you studied and got approved.”

“Most people think the way the FDA has done it for years is a very sensible way to do it,” O’Brien said. “Good for patients, good for pharma, and good for the FDA.”

The FDA said that it will comply with the court’s decision regarding Catalyst but that it doesn’t apply to other companies or drugs. In response to the FDA’s January announcement, Catalyst said it would not be affected. In July 2022, Catalyst bought the rights to Ruzurgi, the Jacobus drug.

Now, there is no competitive drug on the market that treats Wilkinson’s disease.

Jacobus had provided Wilkinson with the active ingredient of its drug free of charge from 2004 to 2018: “The only thing I paid was shipping.”

The FDA’s move to largely rebuke the Catalyst case will likely mean another company will sue the agency again, O’Brien said: “They are in a really tough spot.”

“My worry is there is just another lawsuit coming. And its uncertainty. Uncertainty is ultimately bad for patients,” O’Brien said.

Drugmakers have taken the FDA to court before over how the agency administers the Orphan Drug Act. In 2014, Depomed won a suit against the agency demanding an exclusivity label on its drug Gralise, which treated nerve pain.

The FDA had given Gralise an orphan designation and approval but declined to give it exclusivity because it said it was not clinically superior to another drug already on the market. Then-federal district court judge Ketanji Brown Jackson, who was appointed to the U.S. Supreme Court last year, required the FDA to grant exclusivity, blocking a generic.

That case was focused on the clinical superiority of a drug, rather than the scope of exclusivity. After the Gralise decision, the FDA eventually persuaded Congress to amend the law, which may be needed now, O’Brien said. Rachel Sher, a former director of policy at the National Organization for Rare Disorders who is now at Manatt, Phelps, & Phillips, said companies that would benefit from a broader award of exclusivity will sue to force the agency for the same reading of the Orphan Drug Act.

“Congress will need to act at some point,” said Sher, who also spent a decade on Capitol Hill as the FDA counsel for the House Energy and Commerce Committee.

Congress almost passed an amendment last year when it reauthorized the user fees that help fund the FDA. Then-Sen. Richard Burr (R-N.C.) argued to take the committee-added amendment out of the package, saying drugmakers would otherwise lack the incentives needed to develop drugs for rare diseases, according to Bloomberg Law.

Wilkinson, the patient advocate, has her own advice for Congress. The Orphan Drug Act itself — not just the exclusivity provision — needs to be fixed, she said.

“They have to change the law,” she said. Pharmaceutical companies should only win orphan drug status and be given exclusivity when they develop “a really new medication, not just by changing one molecule.”

Until then, Wilkinson said, she and others are still waiting: “I’m an old lady, and I don’t know if it is going to get fixed.”

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