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The Adoption of Orphan Drugs

According to this amendment a disease should fit in one of these categories in order to have a drug that is qualified as orphan drug:.
             1) A disease with an incidence less than 7.5 per 10,000 people in USA. (200 000 individuals).
             2) A disease with incidence higher than that mentioned above with the impossibility to cover the cost of development and distribution by sales on national territory. [2].
             The definition of orphan drug was later extended to products other than drugs such as medical equipments or health food products. [2].
             When a drug is qualified as "orphan", by the Office of Orphan Products Development at the FDA, the sponsor receives certain benefits from the government in exchange for developing the drug. We"ll discuss these benefits in details in the next section.
             Benefits and incentives provided.
             Market Exclusivity: The orphan drugs act provides the company with seven year market exclusivity. This means that for the seven years following the approval of the orphan drug by the Food and Drug Administration (FDA), the company will have a monopoly status in the market for this drug. No other companies are allowed to compete with it unless they prove that their product is superior to the one available in the market. [3] .
             The issue of proving the superiority is still debated because proving the superiority of a new drug is very difficult since the number of people attained by these diseases is very small. It is argued that a potentially superior drug may fail to break the market exclusivity of the previous drug because of this problem. [10].
             The monopolistic power acquired by the companies through the exclusivity principle together with the power of determining the prices for their product can be a danger for the patients. The FDA has no control over the prices and the price of orphan drugs varies greatly. But since the money is generally paid by the health insurance companies, this is not a major problem for the patient.


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