[Congressional Record Volume 167, Number 81 (Tuesday, May 11, 2021)]
[House]
[Pages H2181-H2183]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                FAIRNESS IN ORPHAN DRUG EXCLUSIVITY ACT

  Mr. PALLONE. Madam Speaker, I move to suspend the rules and pass the 
bill (H.R. 1629) to amend the Federal Food, Drug, and Cosmetic Act with 
respect to limitations on exclusive approval or licensure of orphan 
drugs, and for other purposes.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 1629

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Fairness in Orphan Drug 
     Exclusivity Act''.

     SEC. 2. LIMITATIONS ON EXCLUSIVE APPROVAL OR LICENSURE OF 
                   ORPHAN DRUGS.

       (a) In General.--Section 527 of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 360cc) is amended--
       (1) in subsection (a), by striking ``Except as provided in 
     subsection (b)'' and inserting ``Except as provided in 
     subsection (b) or (f)''; and
       (2) by adding at the end the following:
       ``(f) Limitations on Exclusive Approval, Certification, or 
     License.--
       ``(1) In general.--For a drug designated under section 526 
     for a rare disease or condition pursuant to the criteria set 
     forth in subsection (a)(2)(B) of such section, the Secretary 
     shall not grant, recognize, or apply exclusive approval or 
     licensure under subsection (a), and, if such exclusive 
     approval or licensure has been granted, recognized, or 
     applied, shall revoke such exclusive approval or licensure, 
     unless the sponsor of the application for such drug 
     demonstrates--
       ``(A) with respect to an application approved or a license 
     issued after the date of enactment of this subsection, upon 
     such approval or issuance, that there is no reasonable 
     expectation at the time of such approval or issuance that the 
     cost of developing and making available in the United States 
     such drug for such disease or condition will be recovered 
     from sales in the United States of such drug, taking into 
     account all sales made or reasonably expected to be made 
     within 12 years of first marketing the drug; or
       ``(B) with respect to an application approved or a license 
     issued on or prior to the date of enactment of this 
     subsection, not later than 60 days after such date of 
     enactment, that there was no reasonable expectation at the 
     time of such approval or issuance that the cost of developing 
     and making available in the United States such drug for such 
     disease or condition would be recovered from sales in the 
     United States of such drug, taking into account all sales 
     made or reasonably expected to be made within 12 years of 
     first marketing the drug.
       ``(2) Considerations.--For purposes of subparagraphs (A) 
     and (B) of paragraph (1), the Secretary and the sponsor of 
     the application for the drug designated for a rare disease or 
     condition described in such paragraph shall consider sales 
     from all drugs that--
       ``(A) are developed or marketed by the same sponsor or 
     manufacturer of the drug

[[Page H2182]]

     (or a licensor, predecessor in interest, or other related 
     entity to the sponsor or manufacturer); and
       ``(B) are covered by the same designation under section 
     526.
       ``(3) Criteria.--No drug designated under section 526 for a 
     rare disease or condition pursuant to the criteria set forth 
     in subsection (a)(2)(B) of such section shall be eligible for 
     exclusive approval or licensure under this section unless it 
     met such criteria under such subsection on the date on which 
     the drug was approved or licensed.''.
       (b) Rule of Construction.--The amendments made in 
     subsection (a) shall apply to any drug that has been or is 
     hereafter designated under section 526 of the Federal Food, 
     Drug, and Cosmetic Act (21 U.S.C. 360bb) for a rare disease 
     or condition pursuant to the criteria under subsection 
     (a)(2)(B) of such section regardless of--
       (1) the date on which such drug is designated or becomes 
     the subject of a designation request under such section;
       (2) the date on which such drug is approved under section 
     505 of such Act (21 U.S.C. 355) or licensed under section 351 
     of the Public Health Service Act (42 U.S.C. 262) or becomes 
     the subject of an application for such approval or licensure; 
     and
       (3) the date on which such drug is granted exclusive 
     approval or licensure under section 527 of the Federal Food, 
     Drug, and Cosmetic Act (21 U.S.C. 360cc) or becomes the 
     subject of a request for such exclusive approval or 
     licensure.

     SEC. 3. DETERMINATION OF BUDGETARY EFFECTS.

       The budgetary effects of this Act, for the purpose of 
     complying with the Statutory Pay-As-You-Go Act of 2010, shall 
     be determined by reference to the latest statement titled 
     ``Budgetary Effects of PAYGO Legislation'' for this Act, 
     submitted for printing in the Congressional Record by the 
     Chairman of the House Budget Committee, provided that such 
     statement has been submitted prior to the vote on passage.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New 
Jersey (Mr. Pallone) and the gentleman from Kentucky (Mr. Guthrie) each 
will control 20 minutes.
  The Chair recognizes the gentleman from New Jersey.


                             General Leave

  Mr. PALLONE. Madam Speaker, I ask unanimous consent that all Members 
may have 5 legislative days in which to revise and extend their remarks 
and include extraneous material on H.R. 1629.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New Jersey?
  There was no objection.
  Mr. PALLONE. Madam Speaker, I yield myself such time as I may 
consume.
  I rise in support of H.R. 1629, the Fairness in Orphan Drug 
Exclusivity Act. The legislation will close a loophole in the orphan 
drug program to ensure generic drugs can come to market and are not 
unfairly blocked by their brand competitors.
  This bill, which passed the House by a voice vote last Congress, 
takes steps to address two crises: one, the soaring cost of 
prescription drugs; and, two, the ongoing opioid crisis. It deserves 
our bipartisan support once again today.
  The Orphan Drug Act has been successful in driving research and 
discovery of new therapies to treat and even cure rare diseases. The 
law incentivizes the development of these therapies, including by 
awarding 7 years of market exclusivity and two pathways for 
manufacturers to receive these incentives.
  Under the first pathway, orphan drug status may be awarded when 
manufacturers develop drugs approved to treat diseases with patient 
populations of 200,000 or fewer. Under the second pathway, through the 
rarely used cost recovery pathway, they may receive orphan drug status 
if drug research and development costs are not expected to be recouped 
by sales of the underlying drug.
  Now, under certain circumstances, a manufacturer may also get 
additional rounds of exclusivity for additional drugs in their 
portfolio if they treat the same condition and have the same active 
ingredient, even if the second drug does not meet the orphan drug 
qualifications. This provision has allowed some manufacturers to 
circumvent the original intent of the Orphan Drug Act, which was to 
incentivize the creation of novel drugs for small populations.
  Because of this loophole, some manufacturers have been able to market 
widely used drugs to large populations, all while retaining exclusivity 
and blocking generic competition from coming to market.
  An example of this recently occurred when a formulation of bupe, a 
drug to treat opioid use disorder, was approved in 2017 and was allowed 
to carry the orphan drug designation granted to its manufacturer's 
original bupe drug more than 20 years earlier in 1994.
  When the original 1994 orphan drug designation was granted, it was 
expected that this drug would not be prescribed frequently. However, as 
the opioid crisis worsened, and our response to the crisis evolved, 
millions were eventually prescribed the treatment, generating billions 
in sales.
  Clearly, we knew in 2017 that bupe was not an orphan drug. 
Nevertheless, the drug was granted orphan drug status and exclusivity, 
and that delayed additional forms of generic competition.
  While the FDA eventually recognized this issue with this particular 
drug and revoked its orphan drug designation, its exclusivity delayed 
generic competition that otherwise would have been on the market.
  We need, Madam Speaker, every tool available to us to combat the 
opioid epidemic, including low-cost, affordable medication treatments, 
and loopholes like this one should not be allowed to limit access to 
low-cost drugs.
  H.R. 1629 would stop this from happening again in the future. It 
requires drug manufacturers to demonstrate in their application to the 
FDA that each drug application considered under the cost recovery 
pathway would fail to recoup development costs. The legislation would 
also ensure that these rules apply to drugs already on the market.
  This bill is a narrowly tailored fix for a narrow but very real 
loophole in the law. I thank Representative Dean from Pennsylvania for 
introducing this bill. It passed the House on a bipartisan basis, by 
voice vote, and without opposition last Congress. I look forward to it 
passing with bipartisan support again today and getting it through the 
Senate and to President Biden's desk so it can become law. I urge all 
of my colleagues to support the bill.
  Madam Speaker, I reserve the balance of my time.
  Mr. GUTHRIE. Madam Speaker, I yield myself such time as I may 
consume.
  Madam Speaker, I rise today in support of the Fairness in Orphan Drug 
Exclusivity Act.
  The Orphan Drug Act was enacted to incentivize the development of 
drugs for rare diseases by giving products that receive an orphan drug 
designation 7 years of market exclusivity, meaning a drug produced by 
another manufacturer that contains the same active ingredient to treat 
the same condition is barred from entering the market during this time.
  One way a drug can receive an orphan designation and, subsequently, 
market exclusivity is by the manufacturer's demonstration that there is 
no reasonable expectation that the cost of developing the drug will be 
recovered. However, we have seen in recent years that some drug 
manufacturers, in an effort to block competitors from the market, have 
tried to take advantage of a loophole in the law. Existing law allows 
an orphan drug designation and market exclusivity to carry forward to 
future versions of the same drug without requiring the manufacturer to 
demonstrate that the drug has not been, and remains unlikely to be, 
profitable.
  This legislation will close that loophole, requiring manufacturers to 
show there is no reasonable expectation that the cost of research and 
development will be covered for each successor drug, while still 
preserving incentives for orphan drug development.
  We must preserve incentives to innovate while preventing bad actors 
from exploiting those incentives to benefit from a national crisis, as 
we saw during the opioid epidemic.

  While no drug currently benefits from market exclusivity awarded 
through this mechanism, I remain concerned about including language 
that allows for the retroactive revocation of an incentive through 
legislation.
  Legislation that sets a precedent of revoking a benefit awarded prior 
to enactment creates a slippery slope and could chill innovation if 
adopted elsewhere in statute. While this bill itself is narrowly 
tailored, we do not want uncertainty caused by Congress retroactively 
legislating to discourage truly innovative drugs from coming to the

[[Page H2183]]

market, especially for the rare disease community.
  However, I will support this bill as it moves forward today as I 
believe it is important to prevent the abuse of this program in the 
future. I look forward to continuing discussions to come to a 
resolution on this outstanding concern as we work with the Senate to 
get this bill to the President's desk.
  Madam Speaker, I reserve the balance of my time.
  Mr. PALLONE. Madam Speaker, I yield such time as she may consume to 
the gentlewoman from Pennsylvania (Ms. Dean), the author of this 
legislation, which is important because whenever we can encourage 
generics and make drugs more affordable, it is certainly to the benefit 
of the American people.

                              {time}  1615

  Ms. DEAN. Madam Speaker, I thank Representative Guthrie and Chairman 
Pallone for their support of this critical legislation.
  Madam Speaker, I rise in support of H.R. 1629, the Fairness in Orphan 
Drug Exclusivity Act.
  This crucial legislation would close a loophole in the current law 
that can be used to block competition in the pharmaceutical 
marketplace.
  The Orphan Drug Act of 1983 provided incentives for prescription drug 
manufacturers to develop products to treat rare diseases. This includes 
an exclusive 7-year marketing right for therapies that receive an 
orphan drug designation.
  For a drug to qualify, it must either be a treatment for a disease or 
a condition that affects fewer than 200,000 people in the United 
States, or is a drug intended for diseases that there is no reasonable 
expectation to recoup research and development costs.
  This legislation focuses on the drugs intended for diseases that 
there is no reasonable expectation to recoup research and development 
costs. It would require all drug manufacturers who obtain orphan drug 
status to prove that they have no reasonable expectation that they will 
recover their research and development costs and efforts.
  This legislation works to prevent companies from continuing to use 
orphan drug exclusivity status for a newly approved drug, with an 
identical ingredient to the former version, without having to prove the 
inability to recoup costs.
  This exact circumstance happened when a manufacturer of a 
buprenorphine product updated an older product that received orphan 
drug status and subsequently was given a renewed orphan drug 
exclusivity. Buprenorphine is used as a treatment for opioid use 
disorder to help those recovering from addiction. Unfortunately, at the 
time, the opioid epidemic was raging. It was, by no means, a rare 
disease, and the drug was not a market loser.
  Closing this loophole will ensure that products do not receive an 
unfair market advantage and, therefore, remains consistent with the 
spirit and intent of the Orphan Drug Act. We must work to ensure people 
can gain access to newer therapies and medically assisted treatments 
that are potentially blocked due to orphan designation.
  Madam Speaker, I thank Representative Marc Veasey for introducing 
this legislation along with me. I thank my colleagues in the House for 
passing this bill without objection on a voice vote just 6 months ago 
in the 116th Congress.
  Again, I thank Chairman Pallone for bringing this bill forward and 
for his leadership on substance use disorder and behavioral health 
issues more broadly.
  Madam Speaker, I urge Members to support this bill.
  Mr. GUTHRIE. Madam Speaker, I yield myself such time as I may consume 
for the purpose of closing.
  Madam Speaker, it is so important that we have the Orphan Drug Act. 
We have so many people who have rare diseases come to our offices and 
visit us on Capitol Hill, as they should. Hopefully we will be able to 
do that again soon. It just touches your heart. Many of these diseases 
have so few people affected by it; but if it is you or your child or 
somebody in your family, it is devastating.
  We have all seen the power of the private marketplace to come in and 
produce these pharmaceuticals that make a difference. So we have to 
have provisions to allow these drugs to come into the marketplace and 
incentivize that private innovation moving forward.
  But when people use that in order to move forward, this loophole has 
to be closed. I am glad that it is here, and it is these things that we 
need to work on. It is really not specifically here; it is just maybe a 
slippery slope in other places as we move forward.
  I thank my friend from Pennsylvania for bringing this forward, and 
the Energy and Commerce Committee for addressing this, because we have 
to preserve orphan drug status for those afflicted by the rarest and 
the most devastating diseases. We also need to bring lower drug prices 
to Americans, and we can do that working together.
  Madam Speaker, I appreciate this being brought forward. I urge my 
colleagues to support this piece of legislation, and I yield back the 
balance of my time.
  Mr. PALLONE. Madam Speaker, I yield myself such time as I may consume 
for the purpose of closing.
  Madam Speaker, I thank Representative Guthrie for his remarks about 
trying to work together to lower the cost of prescription drugs. I 
thank Congresswoman Dean because this is a part of that effort.
  As you will note, today, we had a whole package dealing with mental 
health, behavioral health, and other drug activities. It is very 
important that we move this whole package and try to get it passed in 
the Senate as quickly as possible.
  Madam Speaker, I urge support for this legislation on a bipartisan 
basis, and I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from New Jersey (Mr. Pallone) that the House suspend the 
rules and pass the bill, H.R. 1629.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. GUTHRIE. Madam Speaker, on that I demand the yeas and nays.
  The SPEAKER pro tempore. Pursuant to section 3(s) of House Resolution 
8, the yeas and nays are ordered.
  Pursuant to clause 8 of rule XX, further proceedings on this motion 
are postponed.

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