Drug innovators are providing much needed focus on rare diseases and, at the same time, leveraging early-stage rare disease results to facilitate down-stream market entry in broad-spectrum diseases. This paper provides a data-based demonstration of how early- and mid-stage pharmaceutical companies are using the Orphan Drug Program—in combination with pursuing patent portfolio protection—to secure investment and de-risk their platforms, thus lowering the financial barrier for expanding their product pipeline.

The Orphan Drug Program—which is available for drugs that treat diseases affecting fewer than 200,000 patients annually in the United States—provides a number of incentives that can lower the barrier for successfully getting a drug to market. For instance, due in part to the reduced size of clinical trials associated with rare diseases, gaining regulatory approval for treating rare diseases is widely perceived to be simpler and more cost-effective than gaining approval for broad-spectrum diseases. Indeed, the Food and Drug Administration (FDA) allows a number of alternative clinical trial designs to meet approval standards, and orphan drugs are also more likely to qualify for expedited review and approval procedures. On top of this, orphan drugs are eligible for a 25 percent tax credit for clinical trial expenses (which can be claimed up to 20 years after receipt of the designation, and can in some instances be applied to offset payroll taxes), eligibility for research grants, waiver of FDA user fees, and a seven-year post-approval market exclusivity.

Click here to continue reading “Rare Diseases as A Strategic Springboard: Leveraging Orphan Drug Designations and Patent Protection for Increased Investment” in IP Watchdog.