The House committee has advanced a new bill aiming to close a loophole in the Orphan Drug Act and increase market competition for prescription drugs.

The Orphan Drug Act was passed in 1983 to support the development of drugs to treat rare diseases. As the smaller patient populations make the rare disease space more complex and less profitable for big pharma, the Orphan Drug Act provides a number of incentives to companies that develop and commercialise treatments for conditions affecting fewer than 200,000 patients in the US.

However, one of the incentives – providing market exclusivity for seven years to a company with the first FDA approved product to treat an orphan disease – creates a loophole that allows these companies to keep competition off the market and charge high prices.

The Fairness in Orphan Drug Exclusivity Act, a piece of bipartisan legislation introduced in February of this year, would close this loophole. Under the bill, companies would be required to continuously demonstrate to the FDA that there is no reasonable expectation that they will be able to recoup their drug development costs within 12 years of marketing. The bill would then allow the FDA to remove market exclusivity at any point, if a company cannot prove that facing competition would be economically unviable for them.

Such legislation would allow the incentive provided under the Orphan Drug Act to remain viable for those companies that do require it. However, it would prevent the few drug developers that choose to abuse the exclusivity period from blocking competition in order to over-charge patients and rake in high profits.

Earlier this month, the Fairness in Orphan Drug Exclusivity Act was unanimously approved by the House Energy and Commerce Committee. As a result, the bill will now move to the House Floor for consideration.

To find out more and read the bill in full, click here.