Orphan diseases in the pharmaceutical world are diseases affecting less than 200,000 Americans. Such rare diseases were considered to be “orphans” since pharmaceutical companies tended not to develop drugs for these afflictions based on the small market size, limited potential revenue, and resulting inability to recoup sunk research and development costs.
To motivate companies to develop “orphan” drugs, the FDA offers manufacturers a seven year period of market exclusivity commencing upon approval of the drug.Given the limited competition in the orphan drug space, the FDA’s market exclusivity, and the costs of patent prosecution, some manufacturers question the need to obtain additional patent protection on their orphan drugs.
Obtaining patents to protect their investment in orphan drugs, however, is something that pharmaceutical manufactures should not overlook. Indeed, such protection is broader than that provided by the FDA’s orphan drug exclusivity and will likely become increasingly important as the attention of the pharmaceutical industry seems to be refocusing on the orphan drug space. First, competition is increasing in the orphan drug space, with a record number 260 orphan drug designations being granted in the United States in 2013.  Sales for orphan drugs are expected to reach $176 billion by 2020. Second, market exclusivity alone will not sufficiently protect a manufacturer’s interest in this potential revenue on account of the fact that much of this revenue results from off-label uses of the drugs. Due to the lengthy FDA approval process, drugs are often approved for one use, but later prescribed for off-label uses. Take for instance the drug Trisenox, originally approved by the FDA as an orphan drug for the treatment of relapsed or refractory acute promyelocytic leukemia, a condition affecting approximately 400 patients a year. Within five years of FDA approval, the drug had generated nearly $80 million dollars in sales- mainly for off-label use for treating blood cell related cancers.
It is important to realize that the FDA’s grant of market exclusivity for orphan drugs does not protect the off-label use of orphan drugs, allowing competitors to enter the market. Well-drafted patents, however, can offer such protection. Therefore, to best way for manufacturers to protect their investments in orphan drugs is obtain patent protection to prevent others from cashing in on potential off-label uses.