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Lawmakers introduced the Optimizing Research Progress Hope and New Cures (ORPHAN Cures Act) on September 18, a bill the Biotechnology Innovation Organization (BIO) said would boost rare disease drug development in the face of harmful provisions in the Inflation Reduction Act (IRA).
Introduced by Reps. John Joyce (R-PA) and Wiley Nickel (D-NC), the law “changes the incentive structure within IRA to encourage follow-on investment into orphan drug development,” said BIO President and CEO Rachel King in a statement immediately following the bill’s introduction.
The Inflation Reduction Act includes price controls on ten drugs in 2023 and as many as 60 drugs by 2029.
The law exempts orphan drugs for rare diseases from the price controls—but only if the drugs are approved for a single indication. This ultimately means drug manufacturers are disincentivized to test whether a new drug can treat other indications.
Why orphan drugs matter
Orphan drugs are drugs that target rare diseases, which are defined as diseases that affect fewer than 200,000 people in the United States, we previously reported. Given the small patient population of rare diseases, there would normally be less incentive to invest in these drugs as the market is smaller.
But by discouraging research into second indications, the IRA hinders the discovery of orphan drugs, according to Vital Transformation, which found patients could lose up to 40% of drugs that would have been developed in the last decade.
A recent JAMA study also found the IRA’s price controls might have serious implications for the future of innovation.
“Our analysis suggests that the potential foregone follow-on indication approvals for serious illness and unmet needs could be nontrivial. Such potential losses should be considered against the gains to consumers and society that come with lower drug prices,” the report noted.
Why we need to amend the IRA
“Reversing IRA’s perverse incentives will eliminate the significant barrier for scientists to usher in new waves of rare disease drug innovation—all to the benefit of the thousands of patients currently suffering from rare diseases,” said BIO’s King. “BIO looks forward to working with lawmakers” to pass the ORPHAN Cures Act.
“Encouraging R&D for drugs to treat rare diseases is difficult as is. By definition, orphan drugs benefit small patient populations, making investment in this space incredibly risky. But there is a tremendous need for these treatments. Fewer than 5 percent of rare diseases have an FDA-approved treatment. We have repeatedly warned that the IRA — by subjecting drugs that can treat more than one rare disease to government price controls — creates even more barriers to investment into follow-on research and development for orphan drugs,” she continued.
