Ritu S. Baral

Initiatives to de-risk drug development could include redesigning clinical trial requirements.

There is a new initiative under way to revamp the way FDA approaches orphan drug development that goes above and beyond the 1983 Orphan Drug Act. The 2010 Brownback/Brown amendment was created as a market-based approach to address rare and neglected diseases by incentivizing biotech and pharmaceuticals companies to invest in drugs for these conditions.

The first push to incentivize drug companies to develop therapies for orphan diseases was the 1983 U.S. Orphan Drug Act, which focused more on the economic incentives for drug development as market size was inherently limited. Companies were given seven years of data exclusivity, approval application fee waivers, and tax credits for up to 50% of R&D costs.

The Brownback/Brown amendment requires formation of an FDA team that will submit a report to Congress by March 11, 2011. The document is supposed to cover current issues with developing as well as approving therapies for rare and neglected diseases. As per the Brownback/Brown amendment, FDA held an open public hearing to gather suggestions.

Improving R&D and Review Processes

Participants told FDA that they should be flexible when weighing approval of orphan drugs.  Some advocates asked for a specific written statement of policy from the FDA explaining and affirming commitment to evaluation of probable benefit of orphan drugs in a more flexible, case-by-case, and scenario-appropriate manner compared to conventional drugs.

Multiple academic rare-disease experts argued that allowances in trial designs should be made for orphan drugs, for example, using probable prognosis as opposed to placebo or adjusting p-value thresholds to 0.10 from the 0.05. Designing drug trials for orphan diseases has historically been challenging. Recruiting sufficient numbers of patients for adequate powering to reach FDA-mandated statistical thresholds can be difficult to impossible. Additionally, many rare diseases manifest very differently across patients. This heterogeneity makes determining optimal primary endpoints, composite endpoints, or surrogate endpoints in a trial unclear.

Finally, due to historically small patient numbers, the etiology and natural course of rare diseases are often poorly understood. Very rarely is the magnitude of benefit of a short course of drug therapy so large that the benefit to patient is unequivocal. This further complicates trial design as thresholds for meaningful clinical benefit have not been established.

FDA has traditionally stated that orphan drugs are held according to law and agency guidelines to the same clinical effectiveness bar as drugs for treatment of more common diseases. FDA has noted that orphan drugs must prove probable benefit and safety to the same degree as all other drugs. Due to the complexity of these diseases combined with FDA’s stance on approval, drug development for orphan diseases can be risky and unclear. It is possible to utilize SPAs, but these negotiations are often a lengthy and bureaucratic process that can take up to a year or longer. Speakers at the hearing asked that FDA be more committed in facilitating rapid SPAs.

There were also multiple calls for development of comprehensive patient/disease databases to better characterize disease etiology, progression, and prognosis. Data from these projects, stakeholders argued, could potentially serve as acceptable historical controls for future drug development.

Biomarkers are another important topic in orphan drug development. Advocates argue that FDA should be more receptive to scientifically rational and accepted biomarkers or surrogate endpoints in orphan drug evaluation. Trials that use biomarkers instead of event data as primary endpoints are often more rapid, better powered, more economical, and more practically feasible.

Another topic was the seven-year data exclusivity period, which runs concurrent with Hatch-Waxman patent extensions, giving orphan drugs an incremental two years of patent protection. Orphan disease advocates suggest that the 12 years conferred on biological therapies may be appropriate for orphan drugs as well. In addition, some patient advocates proposed that companies be granted patent extension vouchers, which can be applied to any one drug patent of choice. This is similar to vouchers currently granted for development of drugs for tropical diseases that are thought to have limited commercial returns.

Some advocates contend that the threshold for orphan drug status also needs updating. The U.S. population in 1983, when the Orphan Drug Act was passed, was around 230 million but has since increased 35%.  Meanwhile the patient count threshold for orphan diseases remains at 200,000 per the original 1983 act. This would prevent certain true rare diseases from receiving orphan status.

Expected Changes

While some advocates asked for comprehensive formal guidance from FDA on orphan drug development, the National Organization for Rare Diseases requested an explicit written statement from FDA reaffirming its commitment to flexibly applying current drug development standards for orphan drug development. Clinical knowledge of these orphan diseases is constantly evolving, and the agency may approach drug development differently as more is revealed about the diseases.

The Institute of Medicine will produce a report tentatively titled “Accelerating Rare Disease Research and Orphan Product Development.” The report will include discussions and recommendations on discovery, drug development, FDA, the clinical trial process, insurance, Medicare/Medicaid, and devices. This is expected to put additional pressure on FDA to revise and revamp the orphan drug development process.

We think that FDA will make explicit statements in its new 2011 guidance re-affirming its right to flexibility and discretion in enforcing those drug development guidelines already in place. We also think the 2011 guideline may particularly focus on the acceptance and validation of disease-appropriate surrogate endpoints, biostatistical powering of clinical trials, and the validity of historical disease progression or disease registry data as comparators.

Congressional Support a Bonus

Some rare disease advocacy groups are also requesting $10 million in 2011 to establish a new FDA division for biochemical and genetic diseases. Patient advocates made a case for establishment of this division at a June 23 congressional session. We believe, based on these proceedings, that there is significant congressional support for increased involvement of the FDA in orphan diseases. Recently, a new bi-partisan Rare Diseases Caucus in the house of representative was formed. We think a corresponding Senate caucus will be announced soon and that its first meeting will be held later this month.

We believe this bi-partisan congressional caucus for orphan drug development will maintain government focus on the orphan disease initiative. Given that the FDA has come under fire from other groups in Congress for approving drugs without sufficient emphasis on safety, a congressional group that promotes orphan drugs would empower FDA with legislative support to make orphan drug approval more efficient.

The FDA also appears to be independently implementing initiatives to assist companies that are attempting to develop new orphan therapies. For instance, the Office of Orphan Products Division (OOPD) is holding a series of interactive workshops to assist developers in securing an orphan designation. These workshops allow developers real-time feedback with current OOPD reviewers as they develop and finalize their applications for orphan status. The FDA is also holding workshops to assist in designing clinical trials.

Overall, we think that orphan drug development may change for the better in the next few years. We think that the FDA is taking a significantly more collaborative approach to orphan drug development and will employ appropriate flexibility and discretion in drug review with the support of Congress. We think that the new FDA and governmental initiatives may meaningfully reduce risk associated with orphan drug development, which may spur investment from venture capitalist, more biotechnology companies, as well as large pharmaceutical companies.

Ritu S. Baral is senior analyst, biotechnology equity research, at Canaccord Genuity.

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