Health Affairs Web First: US Six-Month Drug Market Exclusivity Extensions Could Yield Nearly $100 Million

For the past few years, US lawmakers have considered legislation that would grant six additional months of market exclusivity for previously approved drugs that have been successfully tested and subsequently approved by the Food and Drug Administration (FDA) for treating rare diseases. This proposal is intended to incentivize pharmaceutical manufacturers to invest in rare disease research.

A new study, released by Health Affairs as a Web First, analyzed the thirteen supplemental applications approved by the FDA that earned rare disease status from 2005 through 2010 to estimate the costs of the clinical trials and potential economic gain arising from a six-month exclusivity extension. According to the authors, Aaron S. Kesselheim, Ben Rome, Ameet Sarpatwari, and Jerry Avorn, the median discounted financial gain for each drug would have been $94.6 million, with blockbuster drugs predictably enjoying the highest returns. The authors' analysis also suggests that these manufacturers had spent a median of $29.8 million on trials that gained supplemental approval for rare disease indications.

"These results confirm that market exclusivity extensions can generate substantial returns to the manufacturers that are eligible for the incentive — sums that are generally much greater than the cost of performing the requisite clinical trials," the authors conclude. As a result, "this solution could prove costly to the health care system." They add, "Any proposal to extend market exclusivity protections in the US prescription drug market should undergo rigorous analysis that weighs the benefits of predicted investment in research against the costs of the incentives to governmental and private-sector payers."

The authors are all affiliated with the Program on Regulation, Therapeutics, and Law (PORTAL) at the Division of Pharmacoepidemiology and Pharmacoeconomics at Brigham and Women's Hospital and Harvard Medical School.

This study, which was supported by the Laura and John Arnold Foundation, will also appear in Health Affairs' February issue.

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