Tat C asked in Business & FinanceInvesting · 1 decade ago

What are the benefits of "Orphan Drug and Fast Track designation from the U.S. Food and Drug Administration?"

2 Answers

  • 1 decade ago
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    "Orphan Drug" status and "Fast Track" designations generally mean the drug will be moved to the open market faster.

    "Fast tracking" is allowed by the FDA when drugs in their experimental trial phase vastly exceed expectations and/or the drug works so much better than placebo in the drug's experimental trials that those getting placebo are clearly worse off (that it would be inhumane to give them placebo when the alternative works so much better).

    The FDA's drug approval process usually takes many years, and "fast tracking" shortens that time considerably.

    So the advantages to fast tracking are:

    1. to the drug manufacturer because they have longer patent time to sell the drug without competition

    2. to the patients in the general public (who are not in the experimental phase of the drug already) who may potentially need these drugs because they can get their hands on them sooner

    3. investors in such drug companies as news like this often causes their stock prices to jump

    The major disadvantage is that researchers and the FDA are more likely to overlook rare side effects or other adverse drug events (think Vioxx) that have been rare enough that only time will expose them.

    "Orphan drug" status I don't think is as desirable. Orphan drugs are technically drugs that are required but its use will be relatively infrequent (so it's not gonna be a big money-maker). To make this easier to understand, let us say that company XYZ comes up with a drug that treats condition/disease ABC. However, condition ABC only affects, say 50,000 people. It is a legitimate disease, but it is unlikely company XYZ will profit from making the drug to treat this condition ABC. Most companies are truly in business only to make money, so company XYZ really has no reason to produce this drug because it won't make them any money. But what about the 50,000 people who have this disease? Will they be forced to suffer, even though a cure exists? So what the FDA does to remedy this problem is grant company XYZ's drug "orphan drug" status so that it has exclusive patent rights to this drug, AND probably pays the company some kind of grant money or something so that it will offset the losses that XYZ would incur by producing this non-moneymaking drug.

    Source(s): I am a pharmacist and this stuff was taught in pharmacy school.
  • 1 decade ago

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