[Congressional Record Volume 167, Number 87 (Wednesday, May 19, 2021)]
[House]
[Pages H2560-H2563]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              {time}  1230
                  FAIRNESS IN ORPHAN DRUG EXCLUSIVITY

  Mr. PALLONE. Madam Speaker, pursuant to House Resolution 403, I call 
up

[[Page H2561]]

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, and ask for its immediate 
consideration in the House.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore (Ms. Jackson Lee). Pursuant to House 
Resolution 403, the bill is considered read.
  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 (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. The bill shall be debatable for 1 hour 
equally divided and controlled by the chair and ranking minority member 
of the Committee on Energy and Commerce.
  The gentleman from New Jersey (Mr. Pallone) and the gentlewoman from 
Washington (Mrs. Rodgers) each will control 30 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 within which to revise and extend their 
remarks and add extraneous material on H.R. 1629, the Fairness in 
Orphan Drug Exclusivity Act.
  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 Drugs 
Exclusivity Act, a bill that will help make some prescription drugs 
more affordable for the American people.
  This Democratic Congress is committed to lowering the costs of 
prescription drugs so that families are no longer forced to choose 
between paying for a lifesaving drug or food and rent. This legislation 
today, H.R. 1629, closes the loophole that has blocked patients from 
accessing cheaper generic drugs.
  Last Congress, this legislation passed the Energy and Commerce 
Committee and the House by voice vote. Last week, it garnered support 
from a large majority in the House but not the two-thirds necessary to 
pass under suspension of the rules. And so, we are here again today to 
debate and pass H.R. 1629 that will help us address two national 
crises: first, the soaring costs of prescription drugs; and second, the 
ongoing opioid epidemic.
  Madam Speaker, this legislation does that by closing a very narrow 
but real loophole in a program known as the orphan drug program. This 
program was created through the Orphan Drug Act, which has been 
successful in basically doing more research and discovery of new 
therapies to treat and even cure rare diseases. The law incentivizes 
the development of these lifesaving therapies by awarding 7 years of 
market exclusivity to manufacturers who receive orphan drug status.
  There are two ways that manufacturers can receive these incentives. 
The first is when manufacturers develop drugs approved to treat 
diseases with patient populations of 200,000 or fewer. And the second 
way is if the manufacturer believes that the research and development 
costs are not expected to be recouped by sales of the underlying drug. 
This is known as the cost recovery pathway. It is rarely used, but 
unfortunately, it has led to manufacturers sometimes inappropriately 
receiving additional exclusivity and, therefore, delaying lower cost 
generics from coming to the market.
  For example, under certain circumstances, if a manufacturer receives 
orphan drug status for one drug, that status and its incentives can be 
passed on to future drugs if those drugs treat the same condition and 
have the same active ingredient. The status and incentives would be 
available even if those future drugs do not meet the orphan drug 
qualifications.
  What this means, Madam Speaker, is that future drugs can benefit from 
the 7 years of market monopoly without having to demonstrate that the 
drug will treat a population of 200,000 or fewer or that they may not 
be able to recoup the costs of producing the drug.
  As a result of this loophole, some manufacturers are marketing widely 
used drugs to large populations while also blocking generic competition 
from coming to market.
  Now, if I can give an egregious example of this, it comes from one of 
our most effective drugs to combat opioid use disorder. In 1994, an 
oral formulation of buprenorphine was granted orphan drug status. At 
the time, it was not expected that the drug would be prescribed 
frequently, and as a result, it was unlikely the manufacturer would 
recoup its development costs. More than 20 years later, however, in 
2017, the same manufacturer developed a new injectable formulation of 
the same drug with the same active ingredient to treat the same 
condition. As a result, the manufacturer was able to prevent cheaper 
generics from coming to market.
  But by 2017, the opioid epidemic worsened. Our response to the crisis

[[Page H2562]]

evolved, and millions were eventually prescribed buprenorphine for 
treatment, generating billions of dollars in sales.
  We know that buprenorphine was not an orphan drug as the law 
envisions. Nevertheless, the new injectable drug was automatically 
granted orphan drug status and exclusivity based on the original oral 
drug's orphan drug designation. This delayed the cheaper generic 
treatments for opioid use disorder from coming to market, and it kept 
the price of the drug high and limited access for those in need of 
treatment.
  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 be on the market today.
  The bottom line is, Madam Speaker, we need every tool available to 
combat the opioid epidemic, including low-cost, affordable medication 
treatments, and loopholes like this have to be closed.
  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 Orphan Drug Act 
cost recovery pathway would be unable to recoup development costs at 
the time of approval. This would include all drugs that seek the orphan 
drug designation under the cost recovery pathway, including the 
injectable buprenorphine example I just described. The bill would also 
ensure that these rules apply to drugs already on the market, so no 
drug manufacturers can claim orphan drug status without first meeting 
this requirement.
  Now, I want to explain, because I know this is complicated, this bill 
is narrowly tailored to fix a narrow but very real loophole in the law. 
We cannot allow these manufacturers to game the system any longer, and 
that is why we have to close this loophole today.

  I thank Congresswoman Dean, who is the sponsor of the bill. The 
merits of this bill are obvious, and I know she is going to talk about 
it more, but that is why it has received strong bipartisan support. I 
am confident that it will once again get bipartisan support today, make 
its way through the Senate, and the President will sign it.
  I regret that we were not able to pass this legislation last week 
under suspension, but I believe that we will come together today to 
close this loophole. I thank our ranking member of the full committee, 
Mrs. Rodgers, for all of her help with this.
  Madam Speaker, I reserve the balance of my time.
  Mrs. RODGERS of Washington. Madam Speaker, I yield myself such time 
as I may consume.
  Madam Speaker, I rise today in support of H.R. 1629, the Fairness in 
Orphan Drug Exclusivity Act.
  The Orphan Drug Act was enacted to incentivize the development of 
drugs that treat rare diseases. Products designated as orphan drugs may 
be entitled to 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.
  However, we have seen in recent years that some drug manufacturers, 
in an effort to block competition from the market, have tried to take 
advantage of a loophole in existing law. H.R. 1629 will close this 
loophole and prevent potential abuse of this program in the future.
  We must preserve incentives to innovate, especially for drugs that 
treat rare diseases, while preventing bad actors from attempting to 
exploit those incentives to benefit from a national crisis, as was done 
during the opioid epidemic.
  This legislation strikes that careful balance. This bill garnered 
both Republican and Democrat support last Congress. I hope we can 
continue to work together to move H.R. 1629 forward in the future on a 
bipartisan basis.
  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 sponsor of this bill.
  I commend her for all the work she has done on this bill. This has 
been several Congresses now, and we are hoping this will be the final 
one where we get this bill passed.
  Ms. DEAN. Madam Speaker, I thank Ranking Member Rodgers and Chairman 
Pallone for their leadership on this bill.
  I, once again, rise in support of H.R. 1629, the Fairness in Orphan 
Drug Exclusivity Act.
  This crucial legislation would close a current loophole that is 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 
condition that affects fewer than 200,000 people in the United States 
or a drug 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 R&D costs.
  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, as the chairman described, happened when a 
manufacturer of a buprenorphine product tweaked an older product that 
had 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, as it is today, and was by no means a rare 
disease. And the drug was by no means a market loser. It was a 
moneymaker.
  Closing this loophole would ensure that products do not receive an 
unfair market advantage and will get more affordable drugs to patients. 
It ensures consistency with the spirit and intent of the Orphan Drug 
Act.
  Know that we want to encourage and support the development of rare 
disease treatments and therapeutics. It is critically important. But we 
cannot allow this important incentive to be co-opted to allow for 
unfair market competition for drugs that are not a commercial loss.
  This bill was supported unanimously last Congress and has broad 
support among patient advocates. This bill is about ensuring market 
competition, reducing barriers to the development of new treatments, 
and, ultimately, supporting patients.
  Madam Speaker, I include in the Record a letter from 16 patient 
advocacy organizations in support of this legislation.
                                                    March 9, 2021.
     Re H.R. 1629--The Fairness in Orphan Drug Exclusivity Act.

     Hon. Madeleine Dean,
     Washington, DC.
     Hon. Marc Veasey,
     Washington, DC.
       Dear Representatives Dean and Veasey:
       Thank you for your leadership on the reintroduction of H.R. 
     1629, The Fairness in Orphan Drug Exclusivity Act. Our nation 
     is in crisis. Each day, 130 Americans die from an opioid 
     overdose, and according to recent provisional data from the 
     Centers for Disease Control and Prevention, between June 2019 
     and May 2020, the number of people who died of an opioid 
     overdose increased by 38.4%.
       We have a responsibility to ensure that all treatment 
     options are made available to those living with opioid use 
     disorder {OUD). Last year, this important legislation was 
     approved by the House of Representatives unanimously. 
     Unfortunately, the Senate was unable to also act on the 
     measure before the 116th Congress adjourned. The new Congress 
     now has an opportunity to pass this legislation swiftly and 
     improve access to life-saving medication assisted treatments 
     and prevent more lives from being lost. We, the undersigned 
     organizations, support H.R. 1629 and urge quick passage of 
     this important bill that will help ensure the availability of 
     vital treatment options for OUD that can save American lives.
       The Orphan Drug Act, enacted in 1983, allows the Food and 
     Drug Administration (FDA) to grant manufacturers Orphan Drug 
     Designation (ODD) and Orphan Drug Exclusivity (ODE) to a 
     product developed to treat rare diseases and conditions 
     affecting less than 200,000 patients. In addition, a 
     manufacturer also can qualify for ODD and ODE if more than 
     200,000 patients are affected, but there is ``no reasonable 
     expectation'' of recovering development costs. Few know about

[[Page H2563]]

     this option, and as a result it is exceedingly rare with only 
     three uses to date.
       In such cases, if a newly approved product has the same 
     active ingredient as a previous product that received orphan 
     designation and exclusivity because the FDA determined the 
     original drug could not recoup its development costs, the 
     newly approved product does not have to demonstrate the 
     inability to recoup its development costs. It does not matter 
     how much time has passed, or how much money the newly 
     approved drug is predicted to make. This loophole creates the 
     potential for abuses within the system, and it is not 
     consistent with intent of the Orphan Drug Act.
       Enacting H.R. 1629 will: fix this loophole in a narrow and 
     targeted manner to prevent this abuse of the Orphan Drug Act; 
     preserve incentives for development of products treating rare 
     diseases and conditions; and ensure new treatment options 
     come to market to treat OUD.
       During this public health emergency, we need all the tools 
     we can muster to fight this crisis. We should not tie one 
     hand behind our back as the exploitation of this loophole 
     would do.
       More than 2.1 million Americans live with OUD, making this 
     disease far from rare. This disease is a national public 
     health emergency, and we need to close this loophole to 
     ensure that all safe and effective treatments are available 
     to fight this disease. Thank you again for your leadership on 
     this issue, and we look forward to working with you to help 
     pass H.R. 1629.
           Sincerely,
         Advocates for Opioid Recovery, AIDS United, Aimed 
           Alliance, Daniel's story, Center for U.S. Policy, 
           Cover2 Resources, FORCE, Healthy Women, Maryland Heroin 
           Awareness, Mother's Addiction Journey, No More OD's, 
           Inc., NOPE Task Force, Prevention Action Alliance, 
           Shatterproof, Tyler's Light, Young People in Recovery.

  Ms. DEAN. Madam Speaker, I include in the Record the Statement of 
Administration Policy issued by the Office of Management and Budget on 
May 17 of this year in support of this bill.

                   Statement of Administration Policy


   H.R. 1629--Fairness in Orphan Drug Exclusivity Act--Rep. Dean, D-
                    Pennsylvania, and two cosponsors

       The Administration supports House passage of H.R. 1629, the 
     Fairness in Orphan Drug Exclusivity Act. Orphan drug status 
     is intended to encourage companies to develop promising drugs 
     for rare diseases. Current law provides market exclusivity 
     for drugs that treat any disease or condition which (A) 
     affects fewer than 200,000 persons in the United States, or 
     (B) affects more than 200,000 in the United States and for 
     which 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 that 
     drug's sales in the United States. H.R. 1629 affects only 
     drugs that qualify under the latter provision. Current law 
     allows market exclusivity to be extended for a new version of 
     the same drug without the drug developer having to show a 
     lack of profitability for that new version as well. This 
     legislation would close that loophole, requiring all drugs 
     that obtain seven years of market exclusivity for conditions 
     affecting 200,000 or more people to illustrate that they have 
     no reasonable expectation of recovering R&D costs through 
     U.S. sales.
       The Administration applauds these steps to ensure Americans 
     have access to high quality, affordable treatments.
  Ms. DEAN. Madam Speaker, I thank Chairman Pallone for his support on 
this bill, and I urge all members to support its passage.
  Mrs. RODGERS of Washington. Madam Speaker, I yield back the balance 
of my time.
  Mr. PALLONE. Madam Speaker, I would ask for support for this bill 
from both sides of the aisle. As I have mentioned in the past, it has 
passed the House previously.
  Madam Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. All time for debate has expired.
  Pursuant to House Resolution 403, the previous question is ordered on 
the bill.
  The question is on the engrossment and third reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.
  The SPEAKER pro tempore. The question is on passage of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mrs. GREENE of Georgia. 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 question 
are postponed.

                          ____________________