Not everything can be important, or nothing is. It’s the time of year when white boards and Post-It easels come out and prioritization for 2025 gets reviewed. From a consultant perspective, I love these exercises. It allows for a look at what needs direct action, coalition or monitoring. And the $ has to go to the right projects or the annual scoreboard won’t align with corporate priorities. Or often your bonus.

I am starting a series I’m calling “On the Horizon” – education on what’s out there that may, or may not, be a priority for your organization. And if you need help creating the prioritization list and your action plan for 2025, reach out an I can run a workshop to get you set up for success.

On the list for many companies is addressing consequences of the Inflation Reduction Act (IRA) – particularly the way it looks at orphan drugs. The IRA says that CMS must exclude from price controls a drug …for only one rare disease or condition and for which the only approved indication (or indications) is for such disease or condition” (Section 1191(e)(3)(A)).

Orphan drugs with a single indication are excluded from negotiation but if they add an indication, they get back on the list with the original approval date. This will create perverse incentives for innovation and delay treatment for patients. Pharmaceutical companies are constantly doing research and development on new and existing products. Once a product is approved by the Food and Drug Administration (FDA) and on the market, companies will typically do a lot more research to discover additional therapeutic uses to the product. As written in JAMA, of the 282 orphan drugs approved between 2003 and 2022, 152 had follow-on indications (92 orphan, 62 non-orphan.)

But now if you have an unapproved drug you are researching for an orphan indication and believe that you have (or will have) a broad patient population indication in the future, you’d be better off holding off starting the negotiation clock until FDA approval of the broad population indication. Why have an orphan indication and small revenues for 5 years while you do additional research and then only 2 years on the new broader population/more volume/more revenue indication before it is up for negotiation? It is likely better to wait 5 years and launch with a broad population and then (maybe) go forward with the orphan indication. And that means that patients on these rare disease products are going to lose out on timely innovation or maybe innovation at all. It is already happening.

Getting the rare disease space to where we are now has not been easy. Over the years there have been a lot of policies enacted to make orphan drug development an attractive option for investors. The Orphan Drug Act was designed to encourage manufacturers to invest in new therapies for rare diseases and the FDA’s Orphan Drug Designation (ODD) program is provided for drugs or biologics that are for a disease effecting fewer than 200,000 individuals in the United States. Those that qualify may get tax credits, a waiver of the Prescription Drug User Fee Act application fee, and the potential to receive 7 years of marketing exclusivity upon product approval. There is recognition that orphan drugs are critical to meeting the needs of patients with rare diseases.

The Centers for Medicare & Medicaid Services (CMS) issued guidance on its approach to determining eligibility for orphan drug exclusion as final without accepting comments, although it did say it “is considering whether there are additional actions CMS can take in its implementation of the Negotiation Program to best support orphan drug development.”  If this issue is important to your organization, there are coalitions to join and legislation to support but there is more work that could be supported, depending on how critical