Abstract
In 1983, Congress adopted the Orphan Drug Act (the "Act") pursuant to its power to regulate interstate and foreign commerce to stimulate research and development of drugs useful in treating relatively rare diseases. The cost of drug research and complying with the complex requirements for securing governmental approval to market drugs left many illnesses "orphans." "Rationally maximizing" drug manufacturers did not care about the illness from a research and marketing viewpoint because of the lack of sufficient economic incentives to engage in research and undertake the governmental approval process for marketing safe and effective drugs to treat "orphaned" diseases. Between ten and twenty million Americans suffer from one of approximately 5,000 rare diseases and could benefit from research, development, and marketing of drugs useful in treating rare diseases. Congress chose to remedy the twin problems of inducing research into drugs having a relatively thin market potential and overcoming the costs of securing Food and Drug Administration (FDA) approval for marketing the drug through the Orphan Drug Act by providing drug researchers and manufacturers a series of incentives, including: (1) federal funding of grants and contracts for clinical testing of Orphan treatments;' (2) a tax credit of 50% of the costs of clinical testing; (3) the creation of the Orphan Product Board to coordinate and facilitate the development of orphan drugs; and (4) the grant of an exclusive right to market an orphan drug for seven years to the first applicant receiving FDA marketing approval of the drug for the designated orphan disease.
Recommended Citation
Flynn, John J.
(1992)
"The Orphan Drug Act: An Unconstitutional
Exercise of the Patent Power,"
Utah Law Review: Vol. 1992:
No.
2, Article 1.
Available at:
https://dc.law.utah.edu/ulr/vol1992/iss2/1