WASHINGTON -- Sen. Howard Metzenbaum is opening aninvestigation to determine whether some companies areabusing the orphan drug program and earning excessive profits.
Metzenbaum, who chairs the Senate antitrust subcommittee, islaying the groundwork for a renewed attempt to passlegislation restricting orphan drug benefits.
Under the Orphan Drug Act, the Food and Drug Administrationgrants companies seven-year exclusive rights to market drugsdeveloped to treat rare diseases.
The Ohio Democrat was a principal sponsor of legislation thatwould have restricted orphan drug benefits, which was passedby Congress last year, but died after a pocket veto byPresident Bush. The lawmaker expressed concern thatcompanies may be using the market exclusivity granted underthe program to overprice drugs, and that they may be claimingthe narrowest possible use to gain orphan status for a drug,after which the drug is promoted for other indications notcovered under the act.
In particular, Metzenbaum is targeting eight companies thatsell, or hope to sell, the three "blockbuster" orphan drugs, sonamed because they have produced sales of at least $100million annually. The companies include Amgen Inc., grantedmarket exclusivity for erythropoietin (EPO), and Upjohn Inc.,which was not. Metzenbaum's list also includes Genentech Inc.and Eli Lilly & Co., the companies granted exclusive rights forhuman growth hormone, and the two companies that were not,Novo Nordisk of North America Inc. and Serono Laboratories.
Metzenbaum is looking at other companies, including GenzymeCorp., Enzon Inc. and Immunex Corp., because he said they areselling orphan drugs that are potential blockbusters.Metzenbaum is sending all these companies questionnairesrequesting information on the cost of developing and marketingorphan drugs, total orphan drug sales and pricing.
"It appears from the questions that he is trying to developsupport for a cap on sales of orphan drug products in the rangeof $100 million to $200 million that would be retroactive tothe time the company first got its product approved," said LisaRaines, vice president for government relations of theIndustrial Biotechnology Association. The IBA would opposesuch a cap because it removes the incentive for companies todevelop orphan drugs and would hurt their ability to raisecapital, she said.
There was mixed reaction from the companies. "The OrphanDrug Act has been very successful," said Alison Taunton-Rigby,Genzyme's vice president of biotherapeutics. "The onlycompanies in the industry with opposing views happen to becompanies that were excluded from an orphan drug marketbecause they weren't the best and they didn't get there first."
Upjohn spokesman John Butler charged that "prescribing off-label indications is used to circumvent the spirit of the orphandrug act. We are in favor of any kind of legislation thatprevents that kind of abuse of the act."
-- Kris Herbst BioWorld Washington Bureau
(c) 1997 American Health Consultants. All rights reserved.