In June 1989 Amgen, a small biotechnology company in Thousand Oaks, Calif., gained U.S. Food and Drug Administration approval to market its first product, epoetin alfa (Epogen), to treat the anemia that accompanies end-stage kidney failure. Because the number of patients with this condition was not large--only around 78,000 at the time--it seemed unlikely that Amgen could make a profit or even recover the development costs of the drug. But it sought FDA approval for the agent anyway, in part because of incentives it was deemed eligible to receive under a law called the Orphan Drug Act. The act, which encompasses a set of laws that went into effect in 1983, provides benefits to encourage private industry to develop treatments for rare diseases. Treatments with such modest markets would otherwise remain "orphans," with no one to sponsor them through FDA scrutiny.

Once on the market, Epogen proved useful for other, more common purposes: restoring red blood cells in people suffering from bone marrow suppression as a result of taking AIDS drugs or cancer chemotherapy, and reducing the need for transfusions in surgery patients. It wasn't long before the company started to earn tremendous profits on the drug. Outraged legislators and consumer groups cried foul, accusing Amgen and a few other companies of parlaying government largesse into private fortunes. By 2001, Epogen and Procrit, the latter a version of epoetin alfa made by Ortho Biotech in Raritan, N.J., were the sixth and seventh best-selling drugs in America, respectively, together generating more than $5 billion in revenues a year. Based on the drugs' success, people began to ask: Had the Orphan Drug Act been co-opted as a Biotechnology Promotion Act? And if so, shouldn't something be done to curb potential abuses in the future?

This article was originally published with the title The Orphan Drug Backlash.

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