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March 22, 2017

GAO Will Investigate Skyrocketing Prices For Orphan Drugs

Latest posts by Atlantic Research Team (see all)

Acting on a request from three influential U.S. senators, the government’s accountability arm confirmed Tuesday that it will investigate potential abuses of the Orphan Drug Act.

The Government Accountability Office still must determine the full scope of the investigation. That scope will take some months, says Chuck Young, GAO’s managing director for public affairs.

Earlier this month, Sens. Orrin Hatch, R-Utah, Chuck Grassley R-Iowa, and Tom Cotton R-Ark., sent a letter to the GAO and raised the possibility that regulatory or legislative changes might be needed “to preserve the intent of this vital law” that gives drugmakers lucrative incentives to develop drugs for rare diseases.

Grassley’s office said Tuesday they expected the GAO to begin its work in about nine months. The delay is typical, as the agency has a queue of requests it is pursuing.

The senators have asked the GAO to “investigate whether the ODA is still incentivizing product development for diseases with fewer than 200,000 affected individuals, as intended.”

Congress overwhelmingly passed the 1983 Orphan Drug Act to motivate pharmaceutical companies to develop drugs for people whose rare diseases had been ignored. Drugs approved as orphans are granted tax incentives and seven years of exclusive rights to market drugs that are needed by fewer than 200,000 patients in the U.S.

In recent months, reports of five- and six-figure annual price tags for orphan drugs have amplified long-simmering concerns about abuse of the law. The senators’ call for a GAO investigation reflects that sentiment.

“While few will argue against the importance of the development of these drugs, several recent press reports suggest that some pharmaceutical manufacturers might be taking advantage of the multiple designation allowance in the orphan drug approval process,” the letter states.

In January, NPR and Kaiser Health News collaborated on an investigation that found the orphan drug program is being manipulated by drugmakers to maximize profits and to protect niche markets for medicines being taken by millions.

Read more at NPR.org

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