Orphan drug

From Free net encyclopedia

Current revision

The granting of the orphan drug status is designed to encourage the development of drugs which are necessary but would be prohibitively expensive/un-profitable to develop under normal circumstances.

In the United States, an orphan drug is any drug developed under the Orphan Drug Act of 1983, a federal law concerning rare diseases ("orphan diseases"), defined as diseases affecting fewer than 200,000 people in the United States or low prevalence is taken as prevalence of less than 5 per 10,000 in the community . This has been adopted as a subclause of the Food and Drug Administration (FDA) regulations. Because medical research and development of drugs to treat such diseases is financially disadvantageous, companies that do so are rewarded with tax reductions and a monopoly on that drug for a limited time (seven years). Under the act many drugs have been developed, including drugs to treat HIV/AIDS, cystic fibrosis, and snake venom.

A similar status exists in the European Union, administered by the Committee on Orphan Medicinal Products of the European Medicines Agency.

Development of orphan drugs

Since few markets would naturally exist to create these goods, as the costs of developing, researching and producing this drug would likely exceed any revenues, government intervention is required, usually to establish such a market or to produce the goods itself. This need for government intervention is often called a market failure in free market economic systems.

The intervention by government can take a variety of forms:

• Tax benefits to companies who produce or research these drugs
• Granting of additional rights above and beyond those granted by the regular patent laws.
• Subsidizing and funding clinical research by universities and industry sponsors to develop medical products (including drugs, biological products, devices, and medical foods) for rare diseases.
• Creating a government-run company to research and produce drugs (see Crown corporation for an example of this type of solution).

External link

• USA Food and Drug Administration: The Orphan Drug Act (as amended)

Template:Treatment-stubde:Orphan-Arzneimittel fr:Médicament orphelin he:תרופה יתומה