Evaluating The Impact Of The Orphan Drug Act’s Seven-Year Market Exclusivity Period

For thirty-five years the Orphan Drug Act of 1983 has provided incentives for pharmaceutical manufacturers to develop drugs to treat rare diseases-conditions that affect fewer than 200,000 people in the US. One key statutory incentive is an exclusive seven-year marketing right for the rare disease indication, which has been heralded as driving a dramatic increase in the number of rare disease treatments. However, most new drugs are also protected by patents. In this study we assessed all new small-molecule drugs approved in the period 1985-2014 that had at least one indication for an orphan-designated disease as of January 1, 2017. We found that orphan drug exclusivity outlasted the last expiring patent in 33 percent of cases overall, and in a smaller percentage of cases for each successive ten-year drug cohort: from 50 percent for drugs approved in 1985-94 to 35 percent for those approved in 1995-2004 and 18 percent for those approved in 2005-14. The Orphan Drug Act's market exclusivity incentive has played an increasingly smaller role in protecting rare disease drugs from competition, while rare disease drugs have substantially increased as a fraction of all new drug approvals.