1
Introduction

Nature is nowhere accustomed more openly to display her secret mysteries than in cases where she shows tracings of her workings apart from the beaten paths; nor is there any better way to advance the proper practice of medicine than to give our minds to the discovery of the usual law of nature, by careful investigation of cases of rarer forms of disease.

William Harvey, 1657


William Harvey’s observation, familiar to many who study rare diseases, is echoed today in explanations of the broader significance of research on diseases that affect small populations. For example, research on Wilms tumor, a rare pediatric cancer, has been cited as a model for understanding the genetics, epigenetics, and molecular biology of pediatric cancers and cancers generally (see, e.g., Feinberg and Williams, 2003). Studies of Tangier disease (an extremely rare condition in which a gene associated with cholesterol processing does not function properly) have illuminated a target for therapies to reduce the risk of heart disease and have also provided insights into Alzheimer disease (Delude, 2009). Research on Liddle syndrome (a rare inherited kidney disorder associated with early and severe hypertension) has contributed to knowledge about the pathology of hypertension (Lifton et al., 2001), and studies of Fanconi anemia have illuminated disease mechanisms of bone marrow failure, cancer, and resistance to chemotherapy (D’Andrea, 2010). More generally, “patients with rare genetic disorders have fueled progress in the fields of human genetics and molecular therapeutics through their enthusiastic participation



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1 Introduction Nature is nowhere accustomed more openly to display her secret mysteries than in cases where she shows tracings of her workings apart from the beaten paths; nor is there any better way to advance the proper practice of medicine than to give our minds to the dis- covery of the usual law of nature, by careful investigation of cases of rarer forms of disease. William Harvey, 1657 William Harvey’s observation, familiar to many who study rare dis- eases, is echoed today in explanations of the broader significance of re- search on diseases that affect small populations. For example, research on Wilms tumor, a rare pediatric cancer, has been cited as a model for understanding the genetics, epigenetics, and molecular biology of pediatric cancers and cancers generally (see, e.g., Feinberg and Williams, 2003). Studies of Tangier disease (an extremely rare condition in which a gene associated with cholesterol processing does not function properly) have illuminated a target for therapies to reduce the risk of heart disease and have also provided insights into Alzheimer disease (Delude, 2009). Research on Liddle syndrome (a rare inherited kidney disorder associated with early and severe hypertension) has contributed to knowledge about the pathol- ogy of hypertension (Lifton et al., 2001), and studies of Fanconi anemia have illuminated disease mechanisms of bone marrow failure, cancer, and resistance to chemotherapy (D’Andrea, 2010). More generally, “patients with rare genetic disorders have fueled progress in the fields of human ge- netics and molecular therapeutics through their enthusiastic participation 

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 RARE DISEASES AND ORPHAN PRODUCTS in research, often based on a remote promise of personal gain and at a very real personal expense” (Dietz, 2010, p. 862). Delineating the general value or multiplier effect of research on specific rare diseases is important because such research may otherwise be under- valued when policy makers consider the absolute numbers of people likely to benefit from a particular public investment in research. Studies of rare diseases often meet other criteria that policy makers consider, for example, that the condition to be studied imposes a serious burden on the health and well-being of affected individuals. Notwithstanding the label rare disease, most adults probably have known at least one person and possibly several people who have a rare condition. They may have grieved with a family that lost an infant to trisomy 13 or another rare chromosomal disorder. They may know a child or young adult who is living with sickle cell disease or Marfan syn- drome. They may be offering support to a relative or friend who has been diagnosed with ovarian cancer or amyotrophic lateral sclerosis in mid- or late life. Although most of the conditions just cited affect tens of thousands of Americans, each meets the definition of rare disease established in a 1984 amendment to the 1983 Orphan Drug Act (P.L. 97-414): a disease or con- dition that affects fewer than 200,000 people in the United States (21 USC 360bb). Less common is a large group of rare diseases that affect perhaps a few hundred to a few thousand individuals each but that are generally unknown to most people, including many physicians. In addition, the published literature includes hundreds of extremely rare conditions with reported numbers of affected individuals in the single or double digits, for example, atransferrinemia (a metabolic disorder affecting the transport of iron through the blood) (Beutler et al., 2000) and reticular dysgenesis (a severe immunodeficiency disorder) (Pannicke et al., 2009). Various estimates place the number of rare conditions at 5,000 to 8,000, and newly identified disorders are reported almost weekly (see Chap- ter 2). Box 1-1 shows just a few examples of the variety of rare diseases. Most result from genetic mutations, often inherited. Others are caused by infectious or toxic agents. The cause of some is unknown. In aggregate, rare diseases afflict millions of Americans of all ages and more millions globally. Most are serious and life-altering, and many are life- threatening or fatal. Because the number of people affected with any one specific rare disease is relatively small, a host of challenges complicates the development of effective drugs and medical devices to prevent, diagnose, treat, or cure these conditions. In recent decades, scientists, advocates, pol- icy makers, and others have done much to try to address these challenges. Yet despite these efforts, only a small fraction of rare diseases currently have effective treatments.

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 INTRODUCTION BOX 1-1 Examples of Rare Diseases Dystonia: a group of rare movement disorders that cause involuntary muscle spasms and contractions. Dystonias may be inherited, arise from other conditions (e.g., tumors, infections, stroke), or be of unknown origin. One literature review reported prevalence estimates for primary dystonia (not caused by other medi- cal conditions) that ranged from 2 cases to 50 cases per million for early-onset primary dystonia and from 30 cases to 7,320 cases per million for late-onset primary dystonia (Defazio et al., 2004). Treatment is not curative. Depending on an individual’s specific condition, options may include physical, speech, and other nonpharmaceutical therapies; oral medications; injection with botulinum toxin; and surgery, including surgery to implant a deep brain stimulation device. Glioblastoma multiformae: a rare, highly malignant central nervous system tumor and the most aggressive type of astrocytoma (grade 4). It occurs most often in adults. The Cancer Brain Tumor Registry of the United States estimates its U.S. incidence to be 3 new cases per 100,000 population and estimates that it accounts for approximately 17 percent of all primary brain and central nervous system cancers (CBTRUS, 2010). Surgical removal of as much of the tumor as feasible followed by radiation and chemotherapy is standard treatment but is not curative (NCI, 2009a). Holocarboxylase synthetase deficiency: an inherited disorder of the metabolism of the vitamin biotin (Wolf, 2008). If not treated, it causes neurological problems (e.g., seizures, movement disorders, intellectual disability, hearing loss), and it may be fatal. It is recommended for inclusion in newborn screening panels. One analysis estimated that newborn screening in 2006 detected 3 cases of the disorder in the United States (Therrell et al., 2008). Early and lifelong treatment with supplemental biotin can prevent symptoms, and those who have developed symptoms may show some improvement with treatment. Nocardiosis: a rare bacterial infection that most often affects the lungs, the brain, and the skin. People with suppressed immune systems are at higher risk for the disease. The Centers for Disease Control and Prevention estimates that 500 to 1,000 new cases of the disease occur each year and that 10 percent of those with less complicated disease (e.g., uncomplicated pneumonia) may die, but fatality rates are higher for those with more severe disease (CDC, 2008b). Treatment with sulfa drugs generally must continue for several months. Von Hippel-Lindau syndrome: a complex and variable disease that is caused by defects in a single gene that governs cell growth. It is associated with a range of tumors and cysts, including hemangioblastomas of the brain, spinal cord, and retina; renal cysts; clear cell renal cell carcinoma (the most common cause of premature death); tumors of the adrenal gland; and tumors of the inner ear (Schimke et al., 2009). Based on one study in an English district, it is estimated to affect 1 in 53,000 individuals (Maher et al., 1991). No drug has been approved specifically to treat or cure this disease. Different manifestations of the disease may be treated with surgery, radiation, chemotherapy, and symptom-directed therapies of various types.

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 RARE DISEASES AND ORPHAN PRODUCTS This report describes how scientific and technological advances on many fronts—combined with supportive public policies and private initiative— offer opportunities to intensify research on the causes and mechanisms of rare diseases and to reduce the number of rare diseases with no or inad- equate means of prevention or treatment. It proposes an integrated strategy for the United States to accelerate research on rare diseases and increase the options for diagnosing, treating, and preventing these diseases. Box 1-2 outlines the elements of an integrated strategy. Components of each of these elements of an integrated strategy already exist, some more robust than others. It is, however, difficult to achieve coherence because so many participants with differing perspectives and pri- orities are necessarily involved. Collaboration and continuing evaluation, which are always challenges, are particularly difficult given the number and diversity of rare diseases and the limited and even undocumented resources devoted to them individually and collectively. Thus, this report proposes further steps to develop a more integrated approach to rare diseases re- search and product development. BOX 1-2 Elements of an Integrated National Strategy to Accelerate Research and Product Development for Rare Diseases • Active involvement and collaboration by a wide range of public and private interests, including government agencies, commercial companies, academic in- stitutions and investigators, and advocacy groups • Timely application of advances in science and technology that can make rare diseases research and product development faster, easier, and less expensive • Creative strategies for sharing research resources and infrastructure to make good and efficient use of scarce funding, expertise, data, biological specimens, and participation in research by people with rare diseases • Appropriate use and further development of trial design and analytic methods tailored to the special challenges of conducting research on small populations • Reasonable rewards and incentives for private-sector innovation and prudent use of public resources for product development when the latter appears a faster or less costly way to respond to important unmet needs • Adequate organizations and resources, including staff with expertise on rare diseases research and product development, for the public agencies that fund biomedical research and regulate drugs and medical devices • Mechanisms for weighing priorities for rare diseases research and product development, establishing collaborative as well as organization-specific goals, and assessing progress toward these goals

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 INTRODUCTION The rest of this chapter provides an introduction to rare diseases and orphan products, including a policy overview and definitions of key terms. Chapter 2 presents a profile of rare diseases, including information about their epidemiology and causes; their prevention, diagnosis, and treatment; and their impact on individuals and families. Chapter 3 presents a brief overview of the regulation of pharmaceuticals and biological products in the United States before examining the Orphan Drug Act and other policies that establish incentives for the development of products for rare conditions. The chapter also provides summary information about drugs approved under the legislation; Appendix B provides more detailed in- formation. Chapter 4 highlights some of the scientific and technological advances that are reshaping the study of rare diseases and the identification of promising therapies. In Chapter 5, the focus shifts to the complexities of moving from a promising therapy to an approved drug. Chapters 4 and 5 both discuss the infrastructure needed for the conduct of basic and clinical research on rare diseases and models of innovation to accelerate research and development. (Appendix E lists the consortia funded by the NIH Rare Diseases Clinical Research Network, and Appendix F presents illustrative examples of the research strategies of selected advocacy groups.) Because the coverage and payment policies of Medicare, Medicaid, and private health plans may influence the product development decisions of pharmaceutical and biotechnology companies, Chapter 6 describes some key features of these policies. It also briefly reviews health plan coverage of certain clinical care expenses in clinical trials. (Appendix C analyzes the coverage of orphan drugs by private prescription drug plans for Medicare beneficiaries.) The development and regulation of drugs and medical devices differ in significant respects. Chapter 7 consolidates much of the discussion of medi- cal devices, including device regulation, incentives for the development of devices for small populations, and coverage and reimbursement. Chapter 8 recaps the elements of a more integrated approach to rare diseases research and product development and proposes a process to encourage the imple- mentation of this approach. OVERVIEW OF RARE DISEASES RESEARCH AND PRODUCT DEVELOPMENT: CHALLENGES AND OPPORTUNITIES For some rare conditions, scientific progress has brought dramatic improvements in the length and quality of life for patients. The following are just a few examples. • In the 1960s, children with cystic fibrosis faced an average life ex- pectancy of less than 10 years; today, a cure remains elusive, but targeted

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0 RARE DISEASES AND ORPHAN PRODUCTS treatments have helped increase average life expectancy to nearly 40 years (CFF, 2008). • Research into the basic mechanisms of disease has laid the founda- tion for therapeutic advances that have transformed the lives of patients (and families) affected by such diverse conditions as phenylketonuria (an enzyme deficiency disorder) and chronic myeloid leukemia. • Other research has contributed to progress in prevention, for exam- ple, by providing the knowledge that has allowed women to follow simple nutritional measures before and during pregnancy to reduce the incidence of birth defects such as spina bifida. Notwithstanding the successes, many rare conditions still lack even ba- sic understanding of the mechanisms that underlie them—much less effec- tive treatments. In clinical practice, one of the complexities of rare diseases is that many are so rare that most physicians, even specialists, have never encountered a single patient with the condition. Diagnosis is often difficult and may take years as one diagnosis after another is considered and eventu- ally ruled out. If an effective treatment is available, a patient with a delayed diagnosis may suffer preventable and irreparable harm. In recent years, innovative approaches to basic research have made the identification of genetic causes of rare diseases easier, faster, and less ex- pensive, although painstaking work may then be required to delineate how a genetic defect in combination with other factors leads to the physical or mental expressions of a disease. At the same time, the study of common conditions is subdividing many of them into smaller and smaller—even rare—molecularly defined subgroups with different therapeutic profiles and different product development requirements. These investigations offer the promise of personalized medicine with more targeted treatments, but re- searchers studying therapies for narrower and narrower disease subgroups of common conditions will also likely share with rare disease researchers the difficulties of conducting clinical studies on small patient populations. Some of the same research approaches and technologies that contribute to the faster and more efficient identification of genes are also altering the processes of drug discovery and development and increasing the efficiency of procedures to identify and refine promising drug candidates to treat rare conditions. These strategies could reduce the time and cost of drug devel- opment for both common and rare conditions. Scientific advances have also revolutionized the development of medicines derived from biological sources. Such biological products are particularly prominent in treatments for a number of very rare conditions that arise from an array of different enzyme deficiencies. Advances in engineering and bioengineering are like- wise contributing to the development of innovative medical devices to treat certain rare conditions. The National Institutes of Health (NIH) is allocat-

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 INTRODUCTION ing more resources to promote the translation of basic science discoveries into clinically significant products and is investing in sophisticated infor- matics and other tools to support the sharing of data, biological specimens, and other research resources. In addition to the dramatically changing landscape of science and tech- nology, other political and social developments have also altered the envi- ronment of rare diseases research and product development. As described further below, the Orphan Drug Act, enacted in 1983, provides incentives for companies to develop products for rare diseases. Since 1983, the Food and Drug Administration (FDA) has approved more than 350 orphan drug applications. Drugs for rare conditions accounted for more than 30 percent of the innovative drugs approved by FDA from 2004 to 2008 (Coté, 2009). NIH has created the Rare Diseases Clinical Research Network and other targeted programs of research for a number of rare diseases. Several small companies now focus on the development of drugs to treat rare diseases, and some large pharmaceutical companies are expressing increased inter- est in the incentives of the Orphan Drug Act. Moreover, patient advocacy groups have become increasingly active and have helped create innovative models for funding and organizing rare diseases research and product devel- opment, including various kinds of public-private partnerships as discussed in Chapter 5. Certainly, daunting obstacles remain to continued advances in rare diseases research and product development. These obstacles range from at- tracting funding from public agencies for basic and translational research to securing commercial investments to develop products for very small markets. Even with funding, researchers often struggle to obtain enough biological specimens for critical preclinical studies or to identify and recruit enough research participants for clinical trials of a product’s safety and efficacy. Difficulties and costs mount to the extent that a product under study has a subtle effect or one that emerges slowly. Identifying and win- ning acceptance of biological markers and surrogate measures of disease and treatment effects is challenging for researchers investigating common conditions and even more so when the condition is rare. Attracting trained investigators to the study of a rare disease is another challenge. Despite the obstacles, with support from NIH, FDA, and a variety of philanthropic and industry sources, researchers are studying hundreds if not thousands of rare diseases, including some that are extremely rare. Box 1-3 highlights one example of research progress involving Hutchinson-Gilford progeria syndrome, an extremely rare condition that physicians have diag- nosed in only a few dozen children worldwide. These and other examples of scientific progress with rare diseases offer encouragement and motiva- tion for continuing efforts to bring the advances in science and technology more fully to bear on rare diseases and thereby accelerate the creation of

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 RARE DISEASES AND ORPHAN PRODUCTS BOX 1-3 Organized Research on Exceptionally Rare Diseases Is Possible Hutchinson-Gilford progeria syndrome is a lethal condition caused by a muta- tion in a single gene. Children with the condition appear to age prematurely and experience stiffness of joints, growth failures, hair loss, wrinkled skin, and cardio- vascular disease among other problems. Most affected children die by their early teens. In 1999, Dr. Leslie Gordon and Dr. Scott Berns, parents of a child diagnosed with the condition, founded the Progeria Research Foundation, which has identi- fied 54 children in 30 countries who are living with the condition. As described by the foundation, the organization began by developing information for patients, families, and researchers; lobbied successfully for legislation mandating that NIH develop a research plan for progeria; organized with NIH the first workshop on the disease in 2001; formed a consortium to identify the causal gene, which occurred in 2002; established, also in 2002, a tissue bank and DNA repository to support research; collaborated in the first study of the natural history of the disease begin- ning in 2004; and raised funds to help initiate the first clinical trial of a potential treatment that began enrolling patients in 2007. SOURCE: PRF, 2008. knowledge that will lead to more and more effective means of prevention, diagnosis, and treatment. HISTORICAL AND POLICY CONTEXT Creating Policy Incentives for Product Development The development of significant drugs of limited commercial value repre- sents an activity in the public interest calling for the combined support of government, industry, voluntary organizations, and others concerned with health care. In our society, it should be possible to provide assistance to small groups of patients as well as the general population, and to encour- age research on medical problems of limited scope which may later have great beneficial effect. Interagency Task Force, 1979, p. 1 More than 30 years ago and after years of discussion and concern, a task force created by what is now the U.S. Department of Health and Hu- man Services (DHHS) issued a call for action in a report on what might be done to promote the development of drugs with limited commercial value. Although a particular focus was drugs aimed at small groups of patients

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 INTRODUCTION affected by rare diseases, concern extended to drugs intended for larger populations that were, for various reasons (e.g., lack of patentability; need for long-term trials to demonstrate efficacy), not attractive development targets for pharmaceutical companies (see, e.g., Asbury, 1985). Creation of the interagency task force in 1978 came after hearings on the rec- ommendations of a congressionally created Commission for the Control of Huntington’s Disease and Its Consequences, calls for action from the Neurologic Drugs Advisory Committee of FDA, and pressure from other individuals and groups that were highlighting the barriers to the develop- ment of therapies for rare conditions and proposing government action to overcome these barriers (Asbury, 1985). (Table 1-1 highlights these and other significant events in the evolution of public policy on rare diseases and orphan products.) The pharmaceutical industry reportedly declined to participate in the task force, but the Pharmaceutical Manufacturers Association (now the Pharmaceutical Research and Manufacturers of America) surveyed its mem- ber firms in 1978 and developed an inventory of company activities related to drugs for rare conditions (Asbury, 1985; Haffner, 1991). This survey reported that the association’s member companies had marketed 34 drugs that were primarily for rare conditions. Of these, 28 targeted conditions that affected fewer than 100,000 people in the United States; 3 were for conditions affecting 100,000 to 500,000 people, and the other 3 were for conditions affecting 500,000 to 1 million people (Asbury, 1991). Of the 34 products, 24 benefited significantly from federal funding for research and development. In addition to marketed products, the survey reported another 24 experimental drugs that companies had made available to spe- cialists treating patients with rare conditions. Other sources identified an additional 13 approved products for rare conditions that had federal agen- cies or academic scientists as sponsors (Asbury, 1991). The 1979 interagency task force report proposed a voluntary program to encourage drug development by pharmaceutical companies, nonprofit organizations, or consortia. The federal government would act as a cata- lyst, for example, by providing some form of financial subsidy (e.g., loans, contracts, or purchase arrangements with individual companies) and by offering priority in the review of new drug approval applications. The report also mentioned the possibility of legislation creating tax and patent incentives. Although the subsidy concept was not particularly influential, the ideas for tax and patent-like incentives were featured in legislation that was adopted just a few years later. Congressional hearings in the early 1980s focused public attention on rare diseases and laid the foundation for passage of the Orphan Drug Act. Signed into law in 1983, the legislation marked the first significant public commitment by any nation to promote the development of drugs for people with rare diseases. The legislation defined rare disease or condition to mean

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 RARE DISEASES AND ORPHAN PRODUCTS TABLE 1-1 Time Line of Selected Events Relevant to Policies Promoting Research and Development for Rare Diseases and Orphan Products Year Event 1964 Committee of the Public Health Service examines the effect of 1962 changes to FDA drug approval requirements on the commercial availability of unpatentable drugs and drugs for rare diseases 1970s Informal coalition of organizations focused on rare conditions promotes need for action to encourage development of drugs for these conditions 1975 Interagency federal government committee publishes an interim report that describes problems surrounding drugs of limited commercial value and recommends further study 1977 Congress creates Commission for the Control of Huntington’s Disease and its Consequences, which called for more basic neurological research and product development for rare diseases 1979 Interagency Task Force on Drugs of Limited Commercial Value (created in 1978) issues its final report 1980- Congress holds hearings to learn more about problems of drugs for rare diseases 1982 1983 President signs Orphan Drug Act, which creates a range of incentives for pharma- ceutical manufacturers to develop drugs for rare diseases National Organization for Rare Disorders, a federation of voluntary health organizations, is established by patients and families who worked together to get the Orphan Drug Act passed FDA approves first two orphan drugs 1984 Congress amends Orphan Drug Act to define a rare disease or condition as one that that (1) affects fewer than 200,000 persons in the United States or (2) affects “more than 200,000 persons in the United States, but for which there is no reasonable expectation that the sales of the drug treatment will recover the costs” Congress directs the creation of a National Commission on Orphan Diseases to assess the research activities of NIH and other public and private organizations in connection with drug development 1989 National Commission on Orphan Diseases issues report 1990 Congress passes legislation to differentiate incentives for orphan drug development depending on commercial value but the President vetoes it Congress passes Safe Medical Devices Act of 1990, which (among other provisions) establishes the basis for the Humanitarian Device Exemption for devices to treat or diagnose a disease or condition that affects fewer than 4,000 individuals and that meet certain other conditions 1992 Congress waives the payment of filing fees for drug and biologic product review for the sponsors of orphan drugs 1993 The Office of Rare Diseases is established within the Office of the NIH Director 1997 Congress permanently extends a tax credit of up to 50 percent for clinical research performed for designated orphan drugs and grants an exemption for

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 INTRODUCTION TABLE 1-1 Continued Year Event orphan drugs from the usual drug approval application fees charged by the Food and Drug Administration 2002 Rare Diseases Act and Rare Disease Orphan Product Development Act are signed into law. The former legislatively establishes the NIH Office of Rare Diseases (now the Office of Rare Diseases Research) and requires NIH to support regional centers of excellence for clinical research into, training in, and demonstration of diagnostic, prevention, control, and treatment methods for rare diseases 2003 NIH Office of Rare Diseases creates Rare Diseases Clinical Research Network beginning with seven research consortia 2007 FDA Amendments Act includes the Pediatric Medical Device Safety and Improvement Act, which provides incentives for industry and researchers to design devices for children 2008 Congress enacts the Genetic Nondiscrimination Act to prohibit discrimination in health insurance and employment based on genetic information. 2009 NIH announces Therapeutics for Rare and Neglected Diseases Program NIH announces expansion of Rare Diseases Clinical Research Network SOURCES: Scheinberg and Walshe, 1986; Asbury, 1991; Haffner, 1991; Henkel, 1999; Villarreal, 2001; Iribarne, 2003; Meyers and DiPaola, 2003; Dorman, 2008; NIH, 2009a,b; Waxman, undated. “any disease or condition which occurs so infrequently in the United States that there is no reasonable expectation that the cost of developing and making available in the United States a drug for such disease or condition will be recovered from sales in the United States of such drug” (21 USC 360bb(a)(2)). Reflecting difficulties in applying this definition to actual situations, Congress amended the law in 1984 to define a rare disease as a disease or condition that affected fewer than 200,000 people in the United States—without regard to the expected commercial value of a product to such a condition. Commercial value is, however, a consideration in a second provision that allows the law’s incentives to apply to products affecting more than 200,000 people if there is no reasonable expectation that the sales of the drug will recover the costs of developing it. In regulations issued in 1992, FDA clarified that when a sponsor is seeking orphan designation for a drug to treat a subset of persons with a particular disease or condi- tion, the sponsor must shown that the subset is medically plausible (57 FR 62076; 21 CFR 316.20(b)(6)). As described in more detail in Chapter 3, the Orphan Drug Act and other policies provide several incentives for orphan drug development. They include

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0 RARE DISEASES AND ORPHAN PRODUCTS TABLE 1-3 Comparison of Selected National Policy Incentives for Orphan Drug Development European United States Japan Australia Union (EU) Original policy (date) Legislation Regulation Regulation Regulation (1983) (1993) (1997) (2000) Years of market 7 10 5 (same as for 10 exclusivity other drugs) Grants program Yes Yes No Not at EU level Tax credits for Yes (50% for Yes (6% of No Not at EU level clinical research clinical costs) both clinical/ (managed by nonclinical member states) costs) Assistance with Yes Yes Yes Yes (partial) trial design Application fee Yes No Yes Reduced fees waivers SOURCES: Rinaldi, 2005; Shah, 2006; EMEA, 2007; Haffner et al., 2008; Villa et al., 2008. STUDY ORIGINS AND FOCUS This Institute of Medicine (IOM) study grew out of discussions with the NIH Office of Rare Diseases Research and the FDA Office of Orphan Prod- ucts Development about opportunities to accelerate rare diseases research and orphan product development. As discussions progressed, the focus expanded from drugs and biologics to include medical devices. In 2009, the IOM appointed a 14-person committee to oversee the study. Consistent with its charge (which is presented in full in Appendix A), the committee • examined the epidemiology, impact, and treatment of rare diseases as context for an assessment of research and development; • investigated the strengths and limitations of the current develop- ment pathways for new drugs, medical devices, and biologics for rare diseases; • assessed public policies that may influence research and develop- ment decisions involving rare diseases and orphan products; and • developed recommendations for an integrated national policy on rare diseases research and orphan product development. This report presents the committee’s conclusions and recommendations.

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 INTRODUCTION It is written for a broad and diverse audience, including public officials in research and regulatory agencies; advocacy and philanthropic groups that support rare diseases research and orphan product development; companies that develop pharmaceutical, medical device, and biologic products; aca- demic medical centers, research institutes, and researchers engaged in basic and clinical research; and the interested general public. In developing its conclusions and recommendations, the committee reviewed the literature on rare diseases and orphan product development and also examined the broader literature on scientific and policy issues re- lated to medical product discovery and development. The literature review was complicated by both the very large number of diseases categorized as rare and the limited base of knowledge about most of these conditions. The committee also solicited information and perspectives from a range of individuals and organizations, including voluntary organizations that promote research on specific conditions or rare conditions more generally, companies that develop drugs and medical devices, and researchers engaged in various aspects of basic, translational, and clinical research. (Committee activities are summarized in Appendix A.) Given the very broad scope of its task, the committee did not investi- gate international strategies to promote research and product development for diseases that are rare in the United States but common in less developed countries. Thus, this report does not examine in depth the various initiatives related to neglected tropical diseases such as Chagas disease, onchocerciasis (river blindness), and trypanosomiasis or sleeping sickness. In addition, some issues were outside the committee’s task, for example, research and development related to medical foods.3 Also, consistent with its statement of task, the committee largely limited its investigations to rare diseases research and orphan product development through the stage of FDA approval of a product for marketing. Many products for rare diseases are approved with requirements for postmarket studies, but the committee did not examine the conduct, outcomes, or FDA review of these studies. It also did not review health services research on the translation of research findings and achievements into clinical practice. Notwithstanding its focus on research and development, the committee recognized the crucial importance of applying preventive, diagnostic, and therapeutic advances in clinical care, public health practice, and personal behavior. Without this further effort, scientific advances will not benefit 3 FDA says that to be considered a medical food, a product generally “must, at a minimum, meet the following criteria: the product must be a food for oral or tube feeding; the product must be labeled for the dietary management of a specific medical disorder, disease, or condition for which there are distinctive nutritional requirements; and the product must be intended to be used under medical supervision” (CFSAN, 2007). FDA does not review or approve medical foods before they are marketed.

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 RARE DISEASES AND ORPHAN PRODUCTS individual and public health. Also, it is often in clinical practice that the limitations of products are revealed when drugs or devices that were studied under highly controlled conditions with carefully selected populations are used in real-world conditions with broader populations. CONCEPTS AND DEFINITIONS This section discusses a number of key concepts and definitions. Ap- pendix D includes a glossary that defines additional terms. Disease, Condition, and Disorder Consistent with the preamble of the Orphan Drug Act, this report generally uses the terms disease, condition, and disorder interchangeably. The term condition is useful in describing injuries and entities such as he- mochromatosis and sickle cell trait that do not cause symptoms or distress in the majority of people who have them. Defining and Tabulating Rare Diseases This report follows the statutory definition of a rare disease or condi- tion as one that affects fewer than 200,000 people in the United States. As is true of many qualitative descriptions or definitions of magnitude, any operational definition of a term such as “rare” is subjective. That subjectivity is reflected in the variations in definitions adopted by different national policymakers as shown in Table 1-4. Some definitions specify ab- solute numbers of affected people whereas others specify rates. Japan and, in particular, Australia define “rare” more conservatively than the United States or the European Union. In contrast to the policy of the European Union, the U.S. definition does not specify that a disease condition must be chronically debilitating or life-threatening. In general, however, the commit- tee found that public programs and industry activities tended to concentrate on serious conditions. Because the U.S. figure as defined in 1984 amendments to the Orphan Product Act is an absolute number—200,000—and because the U.S. popu- lation has grown since 1984, the prevalence threshold expressed as a rate has dropped in the United States from 85 per 100,000 population in 1984 to 66 per 100,000 population in 2008. It is thus coming nearer to the Eu- ropean rate of 50/100,000. If the legislative definition of rare disease had been expressed as the 1984 rate, a rare disease could have affected nearly 258,000 people in the United States as of 2008. Overall, the committee views the choice of a number rather than a rate to be reasonable. It is consistent with the rationale that conditions affecting

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 INTRODUCTION TABLE 1-4 Prevalence Criteria for the Definition of Rare Disease in Selected Countries Prevalence Expressed as Rate Country Prevalence Criterion for Year of Policy Adoption United States 200,000 people 1984: 85/100,000 2008: 66/100,000 Australia 2,000 people 1998: 11/100,000 2008: 9/100,000 European Union 5/10,000 population [Not applicable] (~250,000 people, 27 EU nations) Japan 50,000 people 1993: 40/100,000 2008: 39/100,000 SOURCES: For policies, United States: Orphan Drug Act of 1983; European Union: Regula- tion (EC) No. 141/2000; Australia: Therapeutic Goods Act of 1989; Japan: Pharmaceutical Affairs Law (JPMA, 2008). For population data: Library of Congress (U.S.), 1994; U.S. Census Bureau, 2001, 2009; Australian Bureau of Statistics, 2008; Statistics Bureau (Japan), 2008; Eurostat, 2010. small numbers of people may create particular problems for research and product development that may require special responses, including incen- tives of the kind adopted by Congress in 1983. Estimates of the number of rare diseases in the United States and Eu- rope range from approximately 5,000 conditions to approximately 8,000 (see, e.g., European Commission, 2007; FDA, 2009c; NIH, 2009a). The Of- fice of Rare Diseases Research at the National Institutes of Health includes more than 6,800 conditions in its list of rare diseases, which is available online (http://rarediseases.info.nih.gov/RareDiseaseList.aspx?PageID=1). The preface to the list states that it is based on “either (1) terms for which information requests have been made to the Office of Rare Diseases Re- search, the Genetic and Rare Diseases Information Center, or the National Human Genome Research Institute; or (2) diseases that have been suggested as being rare.” It acknowledges that inclusion in the list does not guarantee that a condition is rare. A European organization, Orphanet,4 has been working more system- 4 On its website, Orphanet describes its mission as follows: “Orphanet is a database of information on rare diseases and orphan drugs for all publics. Its aim is to contribute to the improvement of the diagnosis, care and treatment of patients with rare diseases. Orphanet includes a Professional Encyclopaedia, which is expert-authored and peer-reviewed, a Patient Encyclopaedia and a Directory of Expert Services. This Directory includes information on relevant clinics, clinical laboratories, research activities and patient organisations” (Orphanet, undateda).

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 RARE DISEASES AND ORPHAN PRODUCTS atically to identify and classify rare conditions along several dimensions. These include prevalence, age at onset, pattern of inheritance, prevalence, clinical category (e.g., neurological), and identifier in the Online Mendelian Inheritance in Man (OMIM) database. Although the committee concluded that the Orphanet database was not yet sufficiently developed to use for a comprehensive quantitative cat- egorization of rare diseases, it proved a useful resource (see Chapter 2). The OMIM database, which is not limited to rare conditions, likewise was a useful resource that the committee consulted for its relatively extensive summaries of information on a great many rare diseases.5 The committee also consulted the NORD Guide to Rare Disorders (NORD, 2003), which summarizes information (e.g., differential diagnosis, signs and symptoms, etiology/epidemiology, and treatment) on 800 conditions. The emphasis in the guide is on conditions that are not adequately described in medical texts or are frequently misdiagnosed.6 The NIH and the Orphanet lists of rare diseases are similar but not entirely consistent. For example, the latter includes familial breast cancer, whereas the NIH list does not. Conversely, only the NIH list includes in- flammatory breast cancer and childhood breast cancer. The discussion at the Orphanet website observes that “whether a single pattern is considered unique depends on the state of our knowledge, on the accuracy of clinical and investigative analysis and on the way we choose to classify diseases in general” (Orphanet, undatedb). Factors that are likely to contribute to inconsistencies in the two lists include differences in • prevalence thresholds for labeling a condition as rare in the United States compared to the European Union (see Table 1.3 above); • actual frequency of certain conditions in the United States com- pared to Europe; • decisions about listing subsets of common conditions that are de- fined by clinical features such as age, magnitude of an anatomical defect, or injury or failures to respond to conventional treatment; 5 OMIM is a catalog of human genes and genetic disorders that emphasizes inherited condi- tions. For a particular genetic disorder, it will summarize and cite literature about the clinical features of a genetic disorder, its diagnosis, and its pattern of inheritance, molecular genetics, prevalence data, and other features. 6 NORD also has an online index of more than 1,100 conditions on which it has reports for sale. Some of the conditions, for example, sleep apnea and tinnitus, are not rare.

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 INTRODUCTION • names used for the same condition;7 and • criteria and procedures for tracking and evaluating newly identified conditions or other information and for reviewing and updating lists. When newly reported syndromes or genetic anomalies should be cat- egorized as a rare disease is, to some degree, a matter of judgment as is the determination that certain genetic or other variations within a common condition warrant designation as a rare disease. Reports of new diseases 7 One useful feature of the OMIM and Orphanet listings is that they include alternative names for conditions—although they may differ in the alternatives offered. For example, for familial Mediterranean fever, the OMIM entry lists “polyserositis, recurrent” and “poly- serositis, familial paroxysmal” whereas the alternative in the Orphanet entry is “periodic disease.” BOX 1-4 Examples of Ongoing Reporting of New Rare Syndromes in Orphanet Newsletter Combined immunodeficiency, facial dysmorphism, optic nerve atrophy, skeletal anomalies and developmental delay: Combined immunodeficiency can be iso- lated or associated with abnormalities affecting other organs, mainly the skeletal and neurological systems The authors report a new syndrome in sisters born to consanguineous parents, presenting with combined immunodeficiency, facial dys- morphism, developmental delay, optic atrophy, myoclonic seizures, and skeletal anomalies. Spinocerebellar ataxia type 31: a new disease form associated with inserted penta-nucleotide repeats containing (TGGAA)n. The authors describe a new spi- nocerebellar ataxia disease entity. Spinocerebellar ataxia type 31 is an adult-onset autosomal-dominant neurodegenerative disorder showing progressive cerebellar ataxia mainly affecting Purkinje cells and caused by the insertion of a microsatel- lite sequence (TGGAA)n between the genes TK2 and BEAN. Confetti-like macular atrophy: a new entity. The authors describe two female pa- tients with diffuse, hypopigmented, atrophic, shiny macules on the upper limbs and upper trunk. Histopathological examination revealed an atrophic epidermis with disorganised, hyalinised and coarse collagen bundles in the middle and lower der- mis. Elastic fiber loss and fragmentation were detected. Histopathological findings in these cases showed features of both atrophoderma and anetoderma. These two cases are interesting because they may represent a clinicopathological entity which has not been described before. SOURCE: Orphanet November 2009 newsletter.

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 RARE DISEASES AND ORPHAN PRODUCTS BOX 1-5 Rare by Genotype or Rare by Phenotype: The Example of Hemochromatosis Hemochromatosis is a disorder of iron metabolism. In 2001, analysts estimated that 718,000 individuals in the United States were homozygous for the C282Y mutation, which is associated with an estimated 50 percent to 100 percent of he- reditary hemochromatosis in the U.S. population of European descent (Steinberg et al., 2001 based on sample data from 1992-1994). According to a Centers for Disease Control and Prevention (CDC) review (2007b), estimates of the percent- age of homozygous individuals who have clinically defined disease range from less than 1 percent to 50 percent. Depending on how this range of estimates is evaluated and whether genotype or phenotype is stressed, people in this group might or might not be counted as having a rare disease. For example, if about 27 percent or less of the homozygous group, in fact, has clinically evident disease, then the number of people affected using this categorization would fall under the 200,000 person threshold specified in Orphan Drug Act. and syndromes are frequent. In 2009, the monthly Orphanet newsletters announced 48 newly reported syndromes, most of which involved very small numbers of individuals (see Box 1-4 for examples). Another complexity in categorizing a condition as rare involves condi- tions that are common when defined by genotype (the number of people who have a genetic mutation) but not common if defined by phenotype (the number of people who have clinically evident disease as determined by symptoms and tests). Box 1-5 summarizes the issue as presented by he- mochromatosis, a disorder of iron metabolism. Classic hemochromatosis is not listed among rare diseases by ORDR. Orphanet lists the condition but describes the major form as not rare based on genotype alone. Medical Products, Drugs, Biologics, Medical Devices, Orphan Products This report uses the term medical product to cover drugs, biologic products, and medical devices. The legal definition of drugs includes prod- ucts “intended for use in the diagnosis, cure, mitigation, treatment, or pre- vention of disease” and (except for foods) “intended to affect the structure or any function of the body of man or other animals” (21 USC 321(g)(1)). FDA includes biological products in this definition, although drugs are chemically based and biologics are derived from natural sources such as human cells or microorganisms (see Chapter 3 and Appendix D for fuller definitions). A medical device is a product that is intended for diagnostic, preventive, or therapeutic use that does not achieve its primary effect

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 INTRODUCTION through chemical action on the body or through metabolic processes (see the more detailed legal definition in Chapter 7 and Appendix D). As defined by statute, orphan drugs are, in general, medicines (including biological products) intended for people with rare diseases, that is, diseases affecting fewer than 200,000 people in the United States. If, however, the drug is a vaccine, diagnostic drug, or preventive drug, then orphan designa- tion is possible if the drug would be administered in the United States to fewer than 200,000 per year. Moreover, if it is to treat a disease that affects a larger number of people, then a drug may be still designated as an orphan in certain situations in which there is no reasonable expectation that costs of research and development of the drug for a particular medical indication can be recovered by sales in the United States. No law creates a category of orphan medical devices, but policymakers have created some incentives to encourage the development of devices for small populations with unmet needs. For example, clinical studies involving medical devices are eligible for the research grants program created by the Orphan Drug Act. Devices targeted by these incentives may be included under the general label of orphan medical products or orphan products. Drugs, including orphan drugs, are designated and approved for spe- cific indications. An indication describes a particular use of a drug or de- vice. That use may involve a disease generally. The approved indication may also be limited to a medically plausible subset of people with a disease or condition, for example, those with advanced disease that is not responsive to commonly used treatments. As a case in point, FDA recently approved collagenase clostridium histolyticum (Xiaflex) for treatment of advanced Dupuytren contracture, a condition that can severely limit hand functioning (Rosebraugh, 2010). Physicians may legally use drugs off-label for unap- proved indications, but companies may not promote such uses. Neglected Diseases As noted above, the committee did not examine research and drug de- velopment for diseases that are rare in the United States and other wealthy countries but common in many developing nations. The term neglected disease is applied, in particular, to certain tropical infections that are over- whelmingly concentrated in the world’s poorest countries and that still lack adequate incentives for drug development or mechanisms to make existing treatments available. Examples include • leishmaniases, a parasitic disease that has several forms (most com- monly affecting the skin or the internal organs). It is estimated to infect an estimated 12 million people worldwide (WHO, 2009b) but is reported

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 RARE DISEASES AND ORPHAN PRODUCTS only occasionally in the United States in people who are thought to have acquired the disease outside the country (CDC, 2008a); • dengue fever, which is caused by one of four viruses transmitted by mosquitoes, is rare in the continental United States (and generally is acquired during travel elsewhere). It has emerged as a significant health concern in the past half century and now affects an estimated 50 to 100 million people each year worldwide (CDC, 2009a); and • schistosomiasis, a multi-organ disease caused by parasitic worms that infects approximately 200 million people worldwide but is not present in the United States (CDC, 2008c). For some diseases such as tuberculosis and malaria, cost and other factors have limited the use of existing treatments and preventive strategies in poor countries.8 Beyond humanitarian considerations, the increase in drug-resistant strains of infectious diseases that are now rare in developed countries has added to interest in the development of innovative preventive and therapeutic approaches to such diseases. Research and Product Development Broadly defined, basic research in medicine involves systematic study intended to build fundamental knowledge and understanding of the biologi- cal mechanisms and processes that underlie illness and health. Its practical applications are often unanticipated, although studies such as those to identify the genes that cause disease and the ways in which they do so are generally undertaken with the hope that success will provide the founda- tion for further research to develop means of preventing, diagnosing, or treating the disease. Translational research has been variously defined (see, e.g., Woolf, 2008). This report generally follows the description developed by the IOM Clinical Research Roundtable, which distinguished two arenas of trans- lational research (Sung et al., 2003). The first, which is the focus of this report, involves “the transfer of new understandings of disease mechanisms gained in the laboratory into the development of new methods for diagnosis, therapy, and prevention and their first testing in humans” (p. 1279). Such research aims to traverse what is sometimes called the “valley of death,” an 8 The United States saw approximately 12,900 new cases of tuberculosis reported in 2008 (CDC, 2009b), but more than 9.25 million new active cases were estimated worldwide in 2007 (WHO, 2009a). Approximately 1,500 new cases of malaria were reported in the United States in 2002 with a worldwide estimate of 350 million to 500 million new and previously diagnosed cases (CDC, 2007b). Tuberculosis and malaria are the subjects of substantial inter- national research and development investments to improve treatments, and related initiatives seek to make treatments affordable for poor countries and individuals.

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 INTRODUCTION allusion to the shortfall in the applied research and support activities (e.g., establishing collaborations with industry, attending to intellectual property issues, and planning for FDA requirements) that is necessary to achieve this movement. The second area of translational research involves “the translation of results from clinical studies into everyday clinical practice and health decision making” (p. 1279), which is essential if patients, families, and society are to benefit. Clinical research involves studies with humans. Chapter 5 discusses the stages of clinical research from the earliest human studies of safety and drug dosing through the usually complex investigations of safety and efficacy that are used to support FDA approval of a product. Four stages or phases of clinical research are typically distinguished (Box 1-6). The focus initially is on establishing safety and then extends to include effectiveness (see, e.g., CDER, 1998). As discussed in Chapters 3 and 5, studies involving products to treat rare diseases often differ from BOX 1-6 Types of Clinical Trials Phase I trials initiate the study of candidate drugs in humans. Such trials typically assess the safety and tolerability of a drug, routes of administration and safe dose ranges, and the way the body processes the drug (e.g., how it is absorbed, distrib- uted, metabolized, and excreted). They usually involve less than 100 individuals, often healthy volunteers. Phase II trials continue the assessment of a drug’s safety and dosing but also begin to test efficacy in people with the target disease. These studies may include a range of controls on potential bias, including use of a control group that receives standard treatment or a placebo, the random assignment of research participants to the experimental and control groups, and the concealment (blinding) from par- ticipants and researchers of a participant’s assignment. Phase III trials are expanded investigations of safety and efficacy that are in- tended to allow a fuller assessment of a drug’s benefits and harms and to pro- vide information sufficient to prepare labeling or instructions for the use of the drug. These studies may involve thousands of research participants and multiple sites. Phase IV studies occur after a product is approved for marketing and are highly variable in their design. They are sometimes required by FDA but may be volun- tarily undertaken by manufacturers. They are typically intended to provide further information about outcomes in clinical practice, e.g., in broader populations or over longer periods than studied in the trials used to support FDA approval.

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0 RARE DISEASES AND ORPHAN PRODUCTS studies that are typical for common diseases (e.g., by involving many fewer research participants). The biomedical research enterprise overlaps with many aspects of medi- cal product development. However, the latter typically is viewed as building on the discoveries of basic research and focusing on the preclinical and clinical studies necessary to demonstrate safety and efficacy as required for FDA to authorize the marketing of drugs and certain medical devices. The phrase research and development is commonly used for this spectrum of activity, which is usually undertaken by commercial firms. Efficacy and Effectiveness The achievement of desired results in controlled clinical studies (effi- cacy) is not the same as the achievement of desired results in actual clinical practice (effectiveness). After a product enters clinical use, problems may emerge that were not evident in clinical testing. Although FDA statutes and regulations use the term effectiveness to describe positive results reported in clinical trials, FDA review documents often employ the term efficacy rather than effectiveness in discussing clinical data used in approving a new drug. When it approves a drug or medical device for marketing, FDA may re- quire the sponsor to undertake postmarketing studies to provide additional evidence of safety or effectiveness or both. This report focuses on research to demonstrate safety and efficacy through the stage of clinical testing prior to FDA approval of a product.