[Federal Register Volume 76, Number 202 (Wednesday, October 19, 2011)]
[Proposed Rules]
[Pages 64868-64879]
[FR Doc No: 2011-27037]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

21 CFR Part 316

[Docket No. FDA-2011-N-0583]
RIN 0910-AG72

Orphan Drug Regulations

AGENCY: Food and Drug Administration, HHS.

ACTION: Proposed rule.

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SUMMARY: The Food and Drug Administration (FDA) is proposing to amend
the 1992 Orphan Drug Regulations issued to implement the Orphan Drug
Act. These amendments are intended to clarify regulatory provisions and
make minor improvements to address issues that have arisen since those
regulations were issued.

DATES: Submit either electronic or written comments on the proposed
rule by January 17, 2012. Submit comments on information collection
issues under the Paperwork Reduction Act of 1995 by November 18, 2011
(see the ``Paperwork Reduction Act of 1995'' section of this document).

ADDRESSES: You may submit comments, identified by Docket No. FDA-2011-
N-0583 and/or RIN number 0910-AG72, by any of the following methods,
except that comments on information collection issues under the
Paperwork Reduction Act of 1995 must be submitted to the Office of
Regulatory Affairs, Office of Management and Budget (OMB) (see the
``Paperwork Reduction Act of 1995'' section of this document).

Electronic Submissions

    Submit electronic comments in the following way:
     Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.

Written Submissions

    Submit written submissions in the following ways:
     Fax:<PHONE_NUMBER>.
     Mail/Hand delivery/Courier (for paper, disk, or CD-ROM
submissions): Division of Dockets Management (HFA-305), Food and Drug
Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852.
    Instructions: All submissions received must include the Agency name
and Docket No. FDA-2011-N-0583 and Regulatory Information Number (RIN)
0910-AG72 for this rulemaking. All comments received may be posted
without change to http://www.regulations.gov, including any personal
information provided. For additional information on submitting
comments, see the ``Comments'' heading of the SUPPLEMENTARY INFORMATION
section of this document.
    Docket: For access to the docket to read background documents or
comments received, go to http://www.regulations.gov and insert the
docket number, found in brackets in the heading of this document, into
the ``Search'' box and follow the prompts and/or go to the Division of
Dockets Management, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852.

FOR FURTHER INFORMATION CONTACT: Erica K. McNeilly, Office of Orphan
Products Development, Food and Drug Administration, 10903 New Hampshire
Ave., Bldg. 32, rm. 5271, Silver Spring, MD 20993,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
II. Description of the Proposed Changes
    A. Demonstration of an ``Orphan Subset'' of a Disease or
Condition
    B. Eligibility for Orphan-Drug Designation of a Drug That Was
Previously Approved for the Orphan Indication
    C. Eligibility for Multiple Orphan-Drug Exclusive Approvals
    D. Demonstration of Clinical Superiority
    E. Name of the Drug
    F. Required Drug Description and Scientific Rationale in a
Request for Orphan-Drug Designation
    G. Removal of Requirement To Submit Statement as to Whether
Sponsor Submitting the Request Is the Real Party in Interest
    H. Timing of Request for Orphan-Drug Designation
    I. Responding to a Deficiency Letter From FDA on an Orphan-Drug
Designation Request
    J. Publication of Orphan-Drug Designations
    K. FDA Recognition of Orphan-Drug Exclusive Approval
    L. Miscellaneous Terminology Changes
    M. Address Change
III. Environmental Impact
IV. Legal Authority
V. Proposed Implementation Plan
VI. Executive Order 13132: Federalism
VII. Paperwork Reduction Act of 1995
VIII. Analysis of Impacts
    A. Background
    B. Benefits and Costs of the Proposed Rule
    C. Small Business Analysis
IX. Request for Comments

I. Background

    Since the publication of the Orphan Drug Regulations in the Federal
Register of December 29, 1992 (57 FR 62076), FDA has reviewed over
3,350 requests for orphan-drug designation of drugs for rare diseases
and conditions. Based on these experiences, FDA believes it is useful
to clarify certain regulatory language in the current orphan drug
regulations and to propose areas of minor improvement. These amendments
are intended to assist sponsors who are seeking and who have obtained
orphan-drug designation of their drugs, as well as FDA in administering
the orphan drug program. These amendments are consistent with the
Orphan Drug Act (Pub. L. 97-414) and continue to provide incentives for
the development of potentially promising orphan drugs that otherwise
would not be developed for rare diseases and conditions.
    The specific issues addressed in this proposal include: (1)
Demonstration of an appropriate ``orphan subset'' of persons with a
particular disease or condition that otherwise affects 200,000 or more
persons in the United States, for the purpose of designating a drug for
use in that subset; (2) eligibility for

orphan-drug designation of a drug that is otherwise the same drug for
the same orphan indication as a previously approved drug; (3)
eligibility for multiple orphan-drug exclusive approvals when a
designated orphan drug is separately approved for use in different
subsets of the rare disease or condition; (4) requirement for
demonstrating clinical superiority for the purpose of orphan-drug
exclusive approval; (5) requirement for submitting the name of the drug
in an orphan-drug designation request; (6) required drug description
and scientific rationale in a designation request; (7) required
information in a designation request relating to the sponsor's interest
in the drug; (8) timing of a request for orphan-drug designation; (9)
responding to a deficiency letter from FDA on an orphan-drug
designation request; (10) FDA publication of information regarding
designated orphan drugs; (11) FDA recognition of orphan-drug exclusive
approval; (12) miscellaneous terminology changes; and (13) an address
change.

II. Description of the Proposed Changes

A. Demonstration of an ``Orphan Subset'' of a Disease or Condition

    As set forth in part 316 (21 CFR part 316), a sponsor may request
orphan-drug designation of a drug for use in persons with a rare
disease or condition or, in some special circumstances, a subset of
persons with a disease or condition that may not otherwise be rare
(hereinafter, a ``non-rare'' disease or condition). With respect to the
latter, Sec.  316.20(b)(6) stipulates that when a drug is to be
developed for only a subset of persons with a particular disease or
condition, the sponsor must provide ``a demonstration that the subset
is medically plausible.'' This concept has been the subject of some
confusion, and FDA has received requests for further clarification.
    The term ``medically plausible'' subset used in Sec.  316.20(b)(6)
refers to a regulatory concept specific to the orphan drug regulations.
The applicability of this regulatory concept is explained in section
II.B of the preamble to the notice of proposed rule making (NPRM)
entitled ``Orphan Drug Regulations'' published in the Federal Register
of January 29, 1991 (56 FR 3338 at 3339). Because the term ``medically
plausible'' has not been further clarified through regulations or
guidance, it has been misinterpreted to mean any medically recognizable
or any clinically distinguishable subset of persons with a particular
disease or condition. Inappropriate application of the concept of a
``medically plausible'' subset could result in the creation of subsets
of non-rare diseases or conditions that are artificially narrow. This
result would be inconsistent with the purpose of the Orphan Drug Act.
    For example, some requests for orphan-drug designation have been
for use of a drug in a subset of persons with a particular
pathohistologic grade or clinical stage of a specific malignancy, but
without a plausible argument why the drug could not be used to safely
treat all persons with the malignancy, regardless of disease grade or
stage. Another example of misinterpretation of the term ``medically
plausible'' has been its application to a select group of persons with
a disease or condition who are eligible to enroll in a clinical trial
to support a specific indication for use of a drug when there is no
scientific reason to preclude investigational use of the drug in other
persons with the disease or condition. Patients who meet inclusion and
exclusion criteria for a trial do not automatically qualify as a
``medically plausible'' subset because it could be medically
appropriate to evaluate the same drug for use in the remaining persons
with the same disease or condition. Similarly, a sponsor's intention to
use or study a drug in a certain limited group of persons with a non-
rare disease or condition does not necessarily qualify that group as a
``medically plausible'' subset.
    Any of the interpretations described in the previous paragraphs
would permit a non-rare disease or condition to be artificially
subdivided into smaller groups for the purpose of establishing subsets
that are under the prevalence limit for orphan-drug designation. FDA
does not believe that such an approach serves the intent of the Orphan
Drug Act, because it would permit the creation of artificial ``orphan''
populations. Designation of drugs for use in such artificial ``orphan''
populations could encourage sponsors to study and seek approval for the
use of a drug in the narrowest patient group possible, in order to
avail themselves of the orphan-drug incentives, including tax benefits
and orphan-drug exclusive approval. In addition, use of such artificial
orphan populations to obtain orphan designation and its related
benefits could divert resources away from research and development of
drugs for true orphan diseases and conditions.
    To limit the confusion arising from the use of the term ``medically
plausible,'' FDA proposes to remove the term ``medically plausible'' in
Sec.  316.20(b)(6) and instead provide a description of how an
appropriate subset may be identified for the purpose of orphan-drug
designation (``orphan subset''). The process for identifying an orphan
subset remains the same as has been used by FDA for identifying a
medically plausible subset under the regulations currently in effect.
    For a subset of persons with a non-rare disease or condition to be
considered an orphan subset for the purpose of orphan-drug designation,
the subset cannot be arbitrarily chosen simply to reduce the prevalence
numbers to qualify a drug to treat that population as an orphan drug.
One way for a sponsor to demonstrate that the proposed subset rests on
a non-arbitrary foundation is to show that there is a reasonable
scientific or medical rationale for limiting the investigation and
potential use of the drug to only the subset of interest. When a
sponsor has established that the selected population constitutes a non-
arbitrary subset, e.g., by describing the scientific or medical basis
for limiting the potential use of the drug to that population and
demonstrating that such scientific or medical basis is reasonable, the
target population is an acceptable orphan subset of persons with the
particular disease or condition for the drug of interest.
    For example, it might not be appropriate to treat all persons with
a non-rare disease or condition with a drug that is highly toxic;
however, those patients who are refractory to, or intolerant of, other
less toxic drugs might be reasonable candidates for treatment with the
drug. Therefore, those patients who are refractory to, or intolerant
of, other less toxic drugs may be considered an appropriate orphan
subset for purposes of orphan-drug designation of the highly toxic
drug. In addition, other inherent properties of a drug, such as its
pharmacologic or biopharmaceutical characteristics, may provide a
reasonable basis upon which to identify a subset of patients to whom it
would be appropriate to limit treatment and who thus would qualify as
an orphan subset of a non-rare disease or condition. Likewise,
characteristics of the drug that have been demonstrated through
previous clinical experiences may be used to identify an appropriate
orphan subset. Examples of such characteristics include:
     Pharmacological Property: The mechanism of action is a
common principle for limiting the investigation and use of a drug to a
subset of patients. For example, it is reasonable to expect that use of
a monoclonal antibody directed against a specific surface antigen would
be restricted to treatment

of subtypes of tumors that possess that specific antigen, and not
subtypes of tumors that lack the antigen.
     Previous Clinical Experience: Information on the drug's
activity available from completed trials or published in clinical
literature may be used to establish an orphan subset. If, for example,
relevant data show that the drug has no significant activity in the
remaining subset of patients with high-grade tumors, then patients with
low-grade tumors may constitute an orphan subset.
    FDA recommends that the following practical questions be asked when
assessing whether a subset of a non-rare disease or condition is an
appropriate orphan subset:
     Is the intended subset artificially restricted in any way
with respect to the use of the drug to treat the disease or condition?
     Given that the drug may potentially benefit this
particular subset of persons, is there a reasonable scientific or
medical basis for believing that the drug would also potentially
benefit the remaining population with the non-rare disease or condition
or a larger subset of that population? If not, why not?
    These questions serve to test whether a subset of patients with a
disease or condition that otherwise affects 200,000 or more persons in
the United States can be considered an appropriate orphan subset for
the purpose of orphan-drug designation.\1\
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    \1\ In this proposed rule, FDA is not proposing to change the
current regulatory provisions allowing sponsors to obtain orphan-
drug designation for a drug intended for a disease or condition
affecting 200,000 or more people, or for a vaccine, diagnostic drug,
or preventive drug to be administered to 200,000 or more people per
year, if there is no reasonable expectation that research and drug
development costs can be recovered by sales of the drug in the
United States (Sec. Sec.  316.20(b)(8)(ii) and 316.21(c)).
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B. Eligibility for Orphan-Drug Designation of a Drug That Was
Previously Approved for the Orphan Indication

    According to Sec. Sec.  316.20(a) and 316.25(a)(3), a sponsor of a
subsequent drug that is otherwise the same drug as an already approved
orphan drug may seek and obtain orphan-drug designation of its drug for
the same rare disease or condition, provided that it can present a
plausible hypothesis that the subsequent drug may be clinically
superior to the approved orphan drug. In the absence of a clinical
superiority hypothesis, the Agency does not interpret the orphan-drug
regulations to permit orphan designation of a drug that is otherwise
the same as a drug that is already approved for the orphan use, either
where the approved drug received orphan-drug exclusive approval (even
after such drug's exclusivity period has run out) or where the approved
drug was not previously designated as an orphan drug and thus did not
receive orphan exclusive approval. If the same drug has already been
approved for the orphan disease or condition, with or without orphan
exclusivity, designation would be inappropriate because it would be
inconsistent with the primary purpose of the Orphan Drug Act, which is
to provide incentives to develop promising drugs for rare diseases or
conditions that would not otherwise be developed and approved.
Furthermore, permitting orphan-drug designation of a drug that is
already approved for the orphan indication could permit inappropriate
``evergreening'' of exclusive approval periods. For example, a sponsor
might obtain approval and 5-year new chemical entity exclusivity as
described in Sec.  314.108 (21 CFR 314.108) for a drug product and
then, once that 5-year exclusivity period is expiring, seek orphan-drug
designation and exclusive approval for a drug that is the same as the
drug (e.g., in a new dosage form) for the same indication that was
previously approved. This outcome would be inconsistent with the
provisions of the Orphan Drug Act, which provide that exclusive
approval for a drug for an orphan disease or condition runs for 7 years
from the date of approval of the application for the drug (21 U.S.C.
360cc(a)).
    Accordingly, FDA proposes to delete the word ``orphan'' in the
phrase ``approved orphan drug'' in Sec. Sec.  316.3(b)(3), 316.20(a),
and 316.20(b)(5), to clarify that these provisions would be applicable
to a drug that is otherwise the same drug as any previously approved
drug for the same orphan disease or condition, regardless of whether
such drug was designated as an orphan drug. FDA proposes that the text
of Sec.  316.25(a)(3) be revised. FDA is not changing its position
that, as described in the NPRM preamble (56 FR 3338), section II.E,
paragraph 8, ``even a drug considered the `same' drug structurally
could become a `different' drug * * * by showing clinical
superiority.'' In section II.I, comment 77, of the preamble to the
final rule, ``Orphan Drug Regulations'' (57 FR 62076 at 62084), FDA
reiterated that it would ``designate a structurally identical
subsequent drug as an orphan drug, even in the face of a holder's
exclusive marketing rights, if the subsequent sponsor advances a
plausible basis on which to conclude that its product may be proven
`clinically superior.' '' FDA believes that permitting a sponsor to
receive orphan-drug designation of a potentially clinically superior
drug that is otherwise the same drug as an already approved drug
promotes development of potentially superior drugs to the benefit of
persons with rare diseases or conditions.

C. Eligibility for Multiple Orphan-Drug Exclusive Approvals

    When FDA designates an orphan drug, it generally designates the
drug for use by all persons with the rare disease or condition and
expects that a sponsor will seek approval of the drug for all persons
with the rare disease or condition designated. The uses for which a
drug will be approved, however, are those for which there is adequate
data and information to support approval, and may be limited to subsets
of patients with the orphan disease or condition. As new data emerge,
FDA may approve the drug for use in additional subsets of the disease
or condition for which the drug was designated.
    The scope of orphan exclusive approval for a designated drug is
limited to the approved indication or use, even if the underlying
orphan designation is broader. If the sponsor who originally obtained
orphan exclusive approval of the drug for only a subset of the orphan
disease or condition for which the drug was designated subsequently
obtains approval of the drug for one or more additional subsets of that
orphan disease or condition, FDA will recognize orphan-drug exclusive
approval, as appropriate, for those additional subsets from the date of
such additional marketing approval(s). Before obtaining such additional
marketing approval(s), the sponsor in this instance would not need to
have obtained additional orphan designation for the additional
subset(s) of the orphan disease or condition.
    If, before approval of the drug for any subset of the disease or
condition for which it was designated, a subsequent sponsor also
obtained designation for the same orphan disease or condition, each
sponsor may be eligible for orphan-drug exclusive approval for the
respective subset(s) for which each first obtains marketing approval.
For example, if the first sponsor receives approval for one subset of
the orphan disease or condition and the subsequent sponsor receives
approval for a different subset, FDA will recognize orphan-drug
exclusive approval for each sponsor's drug, as appropriate, from the
date of each drug's marketing approval.

    After approval of the drug for one or more subsets of the orphan
disease or condition, a subsequent sponsor may, without submitting a
plausible hypothesis of clinical superiority, seek designation of the
drug for the subset(s) of the orphan disease or condition for which the
drug has not yet been approved. FDA may designate the drug for use in
the remaining subset(s) without requiring a postulation of clinical
superiority. To obtain such a designation, however, the sponsor must
demonstrate that, at the time of its designation request, the entire
population with the orphan disease or condition, not just the remaining
subset(s) of the population, is under the prevalence limit, unless the
sponsor can demonstrate that the remaining subset(s) is an orphan
subset in accordance with Sec.  316.20(b)(6).
    This approach would permit multiple orphan-drug exclusive approvals
for multiple subsets of the same underlying orphan disease or
condition. For example, a drug could be designated for the treatment of
T-cell non-Hodgkin's lymphoma (assuming that, at the time of
designation, the drug's sponsor otherwise met all the other statutory
and regulatory requirements for obtaining an orphan designation).
However, the data submitted may only support approval of the treatment
of cutaneous manifestations in patients with cutaneous T-cell lymphoma.
Subsequently, on the basis of additional data, the same drug could be
approved for other subsets of T-cell non-Hodgkin's lymphomas, such as
anaplastic large cell lymphoma or angioimmunoblastic T-cell lymphoma.
If the same sponsor, or a different sponsor with orphan designation,
obtained approval for the use of the drug in one or more of the
remaining subsets of T-cell non-Hodgkin's lymphomas, that sponsor would
be eligible for orphan-drug exclusive approval for the use of the drug
in those subsets from the date of approval of the drug for use in those
subsets. Accordingly, FDA proposes to add provisions to Sec.  316.31.
    FDA believes that this proposal is consistent with the purpose of
the Orphan Drug Act because it provides an important incentive for one
or more sponsors to develop, or to continue to develop, a potentially
promising drug for use in all persons affected by a rare disease or
condition, rather than in just a subset of that orphan population, even
after the drug has been approved for a different subset of the
population with the disease or condition.
    This provision is applicable only in situations where the
underlying disease or condition for which the drug was designated is an
orphan disease or condition at the time designation is requested.

D. Demonstration of Clinical Superiority

    FDA believes that granting orphan-drug designation to a subsequent
drug that is otherwise the same as a previously approved drug for the
same orphan disease or indication on the basis of hypothetical
plausibility of clinical superiority is the best tool for giving effect
to the intent of Congress to provide incentives for sponsors to develop
potentially safer and more effective orphan drugs. It is possible,
however, that a sponsor that has obtained designation of its drug on
the basis of a hypothesis that the drug will be clinically superior
will be unable, upon submission of the marketing application, to
demonstrate that the drug is clinically superior to the previously
approved drug. In that case, if the already approved drug has remaining
exclusive approval, the subsequent drug would not itself be eligible
for approval, because it is the same drug as the drug with exclusive
approval. If the approved drug does not have exclusive approval, the
subsequent drug may be approved, but would not itself be eligible for
orphan-drug exclusive approval.
    As described in Sec.  316.3(b)(3)(i) and (b)(3)(ii), a drug that is
otherwise the same drug as a previously approved drug, and for which a
clear showing of greater effectiveness or greater safety has not been
made, may still be considered clinically superior within the meaning of
Sec.  316.3(b)(3)(iii) if it makes a major contribution to patient
care. FDA believes that such clinical superiority is meaningful only
when the subsequent drug provides safety or effectiveness comparable to
the approved drug. For example, to claim that a drug makes a major
contribution to patient care through a new formulation or a different
route of administration, the sponsor must also address whether the
change renders the drug less safe or less effective than the approved
drug. For these reasons, FDA proposes that Sec.  316.3(b)(3)(iii) be
revised.

E. Name of the Drug

    As provided in Sec.  316.20(b)(2), requests for orphan designation
must include the generic and trade name, if any, of the drug. For some
products, however, neither a generic, nor trade name may be available,
for example, for some large and complicated biological products or for
any molecule for which the sponsor has not yet obtained a trade name.
FDA is proposing to revise Sec.  316.20(b)(2) so that, if neither such
name is available, requests for designation include a chemical name or
a meaningful descriptive name (i.e., one that would be meaningful to
the public if published). By providing such information in the request
for designation, sponsors would help ensure that the name that FDA
ultimately publishes under Sec.  316.28 upon designation of the product
is accurate and meaningful.

F. Required Drug Description and Scientific Rationale in a Request for
Orphan-Drug Designation

    FDA needs adequate information on the drug to conduct the review of
a request for orphan-drug designation. The identity of the active
moiety or principal molecular structural features is of particular
importance because such information is critical in determining whether
various drugs are the same within the meaning of Sec.  316.3(b)(13).
FDA notes that a number of sponsors have omitted such information in
their designation requests. Without such information, FDA cannot
determine whether the drug is the same as one already approved and so
cannot render a decision on the request.
    FDA further notes that some sponsors have included in their
designation requests only theories, unsupported by data, as to why the
drug may be used in a particular disease or condition, which does not
constitute an adequate scientific rationale for the use of the drug for
the rare disease or condition. Other sponsors, by contrast, have
included all available data about a drug, rather than just the data
pertinent to demonstrating a scientific rationale to establish a
medically plausible basis for the use of the drug for the rare disease
or condition. Among the data pertinent to a request that should be
included are in vitro data, preclinical efficacy data of the drug from
studies conducted in a relevant animal model for the human disease or
condition, and clinical data from use of the drug in the rare disease
or condition. Animal toxicology studies are generally not relevant to a
request for orphan-drug designation. To ensure that an adequate drug
description and scientific rationale are provided in a request, along
with the necessary supporting data (whether positive, negative, or
inconclusive), FDA proposes to revise Sec.  316.20(b)(4).

G. Removal of Requirement To Submit Statement as to Whether Sponsor
Submitting the Request Is the Real Party in Interest

    FDA regulations at Sec.  316.20(b)(9) currently require that
requests for

orphan-drug designations include a statement as to whether the sponsor
submitting the request is the real party in interest of the development
and the intended or actual production and sales of the product. FDA is
proposing to remove this requirement because it has proven to be of
marginal if any utility in applications, has caused confusion for
sponsors, and has had the effect of discouraging agents of sponsors
(e.g., a sponsor's lawyer) from submitting requests on the sponsor's
behalf. Accordingly, FDA proposes to remove Sec.  316.20(b)(9).

H. Timing of Request for Orphan-Drug Designation

    FDA regulations at Sec.  316.23(a) state that a sponsor may request
orphan-drug designation at any time in the drug development process
prior to the submission of a marketing application for the drug product
for the orphan indication. FDA is aware that this language has been the
subject of different interpretations by sponsors. To clarify the
requirements regarding the timing of a designation request, FDA
proposes to revise Sec.  316.23(a) to indicate that a sponsor may
request orphan-drug designation at any time in its drug development
process prior to the time that sponsor submits a marketing application
for the drug for the rare disease or condition. This is intended to
clarify that a sponsor may not submit an orphan-drug designation
request after it has submitted a marketing application for the drug for
that use. This revision is also intended to clarify that submission by
a sponsor of a marketing application for the drug for the orphan
indication does not prevent another sponsor from submitting a request
for orphan designation of the same drug for the same orphan use.
Permitting designation of the subsequent drug in this situation, where
there is no certainty that the previous marketing application will be
approved promptly, if at all, would be consistent with the purpose of
the Orphan Drug Act to provide incentives to develop and obtain
approval for promising drugs for rare diseases or conditions. Once any
sponsor's marketing application for the orphan indication has been
approved, with or without orphan exclusive approval, another sponsor
may not obtain orphan-drug designation for the same drug and the same
orphan indication or use for which the approval was granted absent a
plausible hypothesis of clinical superiority.

I. Responding to a Deficiency Letter From FDA on an Orphan-Drug
Designation Request

    FDA regulations are currently silent on when sponsors must respond
to a deficiency letter from FDA on an orphan-drug designation request.
FDA sends such deficiency letters when a request lacks necessary
information or contains inaccurate information, for example, a
miscalculated prevalence estimate. FDA has observed that some sponsors
respond promptly to such deficiency letters, providing the requested
information, whereas other sponsors may take several years or more to
respond without sending any interim communication to FDA. In FDA's
experience, when a period of several years or more elapses between the
sponsor's initial request and the sponsor's deficiency response, the
very basis for the orphan request may no longer hold in some
circumstances. One example is if the initial request lacks an accurate
prevalence estimate and the sponsor takes several years or more to
submit a revised prevalence estimate keyed to the time of submission of
the initial request, several years prior. In some circumstances, the
actual prevalence for the disease or condition in question may have
grown in the intervening years to exceed the prevalence limit of under
200,000. Because orphan designation eligibility in terms of prevalence
is evaluated at the time of the submission of the request (see Sec.
316.21(b)), the drug may be granted orphan-drug designation despite
this prevalence increase, without any justification that there is no
reasonable expectation of cost recovery (see Sec. Sec.
316.20(b)(8)(ii) and 316.21(c)). FDA believes that such designations
may be inconsistent with the purpose of the Orphan Drug Act, to provide
incentives for the development of drugs for ``rare diseases or
conditions'' as defined in section 526 of the Federal Food, Drug, and
Cosmetic Act (FD&C Act) (21 U.S.C. 360bb).
    To address this issue, FDA is proposing to require that sponsors
respond to a deficiency letter within 1 year after issuance of the
letter, unless within that timeframe the sponsor requests in writing an
extension of time to respond. Such a request would specify both the
reason(s) for the requested extension and the length of time of the
requested extension. FDA will grant all reasonable requests for an
extension. In some cases, FDA may grant a repeat request for an
extension if, before expiration of the deadline as originally extended,
the sponsor submits a new extension request, stating both the reason(s)
for the request and the requested length of time of the extension.
    In the event the sponsor fails to respond to the deficiency letter
or to request an extension of time within a year, FDA may consider the
designation request voluntarily withdrawn at the conclusion of the 1-
year period, unless notified sooner by the sponsor that the request is
withdrawn. FDA encourages sponsors to notify the Agency as soon as
possible after receipt of a deficiency letter in the event the sponsor
decides not to pursue the designation request. Should FDA deny a
request for an extension of time, FDA may likewise consider the
designation request voluntarily withdrawn and will so notify the
sponsor in writing.
    In FDA's experience, some deficiencies may be less suitable to
extension requests than others. For example, FDA generally expects that
deficiencies involving an inaccurate or incomplete prevalence estimate
will be readily addressed within 1 year. Other types of deficiencies,
however, may take longer to address. For example, deficiencies
involving the scientific or medical rationale supporting a designation
request for only a subset of persons with a particular disease or
condition may require sponsors to conduct research and develop
additional data, which may take several years or more. For the latter
types of deficiencies, FDA generally anticipates granting extension
requests to allow sponsors to develop necessary supporting data and
information.
    To implement this policy, FDA proposes to add new language to Sec.
316.24(a). FDA proposes to change the title of this section to,
``Deficiency letters and granting orphan-drug designation.'' The
existing paragraphs (a) and (b) would be redesignated (b) and (c),
respectively.

J. Publication of Orphan-Drug Designations

    Section 316.28 requires that FDA publish a monthly updated list of
designated drugs in addition to placing on file at the FDA Division of
Dockets Management an annual cumulative list of all designated drugs.
FDA currently makes available a cumulative list of all designated drugs
to date and a cumulative list of designated drugs in the current year
on its Web site at http://www.fda.gov/orphan/. These lists are updated
monthly.
    To identify a drug in these lists and in the docket, FDA publishes
its generic name and trade name, if any. If neither name is available,
FDA publishes the chemical name or a meaningful

descriptive name of the drug (i.e., a name that would be meaningful to
the public). Internal business codes or other similar identifiers do
not suffice for publication purposes, because they do not provide
meaningful notice to the public of a designation. The Orphan Drug Act
requires that notice respecting designation of a drug be made available
to the public (section 526(c) of the FD&C Act). Ensuring that notice is
meaningful, such that patients, health care providers, sponsors, and
other stakeholders can identify which drug has been designated as an
orphan drug, accords with both the language and the purpose of this
statutory provision.\2\ FDA proposes to revise Sec.  316.28 to reflect
FDA's existing publication practices.
---------------------------------------------------------------------------

    \2\ In enacting and later amending the Orphan Drug Act, Congress
emphasized the importance of effective public dissemination of
orphan designation and the need for certainty about an orphan drug's
potential for exclusivity (see H.R. Rep. No. 97-840, at 9 (1982),
and H.R. Rep. No. 100-473, at 5-6 (1987)).
---------------------------------------------------------------------------

    The presence of a drug on the list of designated drugs does not
necessarily mean the sponsor is actively developing the drug for the
orphan disease or indication. Holders of orphan-drug designations are
required by Sec.  316.30 to submit an annual progress report on their
designated drugs. It has been the Agency's experience that a number of
holders of orphan-drug designations have failed to submit annual
reports as required for the designated drug, and some have terminated
their orphan-drug development program without notifying FDA. The Agency
is considering ways to make available to the public information about
the status of development for designated orphan drugs, including
whether to provide information to the public on whether a sponsor has
submitted the required annual reports. Although the failure of a
sponsor to submit an annual report does not necessarily signal that the
sponsor has ceased development of the orphan drug, this information
could nevertheless prove useful to patients, medical practitioners, and
the drug development community, who may wish to obtain additional
information regarding the status of drug development from the sponsor
of the designated drug.
    Whether FDA will need to consider making additional information
about designated drugs available through, for example, publishing the
status of annual report submissions will depend in part on the effect
of recent and pending changes in the availability of information about
clinical trials of drugs. It is possible that expansion of the public
availability of clinical trial information under section 801 of the
Food and Drug Administration Amendments Act of 2007 (Pub. L. 110-85)
will provide the public additional useful information on whether trials
of a designated drug are being undertaken for the orphan indication.
The information derived from this clinical trials database may be as
useful, or even more useful, to patients and other interested parties
as would information on whether a sponsor had submitted an annual
report as required.
    We are seeking comment on whether it would be useful for the Agency
to make public information about whether the sponsor of a designated
drug has submitted annual reports as required under Sec.  316.30. The
Agency does not contemplate disclosing the contents of the annual
report, only whether such annual report has been submitted.

K. FDA Recognition of Orphan-Drug Exclusive Approval

    Under existing Agency practice, FDA does not recognize orphan-drug
exclusive approval if the drug is otherwise the same drug as one
already approved and the sponsor fails to substantiate, in the
application for marketing approval, the hypothesis of clinical
superiority over the previously approved drug that formed the basis for
designation. To clarify existing practice, FDA proposes to add new
language to Sec.  316.34(c).

L. Miscellaneous Terminology Changes

    FDA proposes to revise the following terms throughout part 316 for
the sake of precision and internal consistency, so that each term is
used consistently throughout this part: ``drug product'' versus
``drug,'' and ``indication'' and ``indicated'' versus ``designation,''
``use,'' ``developed,'' and ``disease or condition.''

M. Address Change

    FDA proposes to update the address in Sec.  316.4 to ``Office of
Orphan Products Development, Food and Drug Administration, 10903 New
Hampshire Ave., Bldg. 32, Rm. 5271, Silver Spring, MD 20993.''

III. Environmental Impact

    FDA has determined under 21 CFR 25.30(h) and 25.31(a) that this
action is of a type that does not individually or cumulatively have a
significant effect on the human environment. Therefore, neither an
environmental assessment nor an environmental impact statement is
required.

IV. Legal Authority

    FDA is proposing this rule under the authority granted it by the
Orphan Drug Act (Pub. L. 97-414). In enacting the Orphan Drug Act,
Congress required FDA to issue regulations for the implementation of
sections 525 and 526 of the FD&C Act (21 U.S.C. 360aa and 360bb),
relating to written FDA recommendations on studies required for
approval of marketing applications of orphan drugs and for the
designation of eligible drugs as orphan drugs. In the Federal Register
of December 29, 1992 (57 FR 62076) (1992 final rule), FDA issued a
final rule for the implementation of these sections as well as for the
implementation of sections 527 and 528 of the FD&C Act (21 U.S.C. 360cc
and 360dd), relating to exclusive marketing for orphan drugs and the
encouragement of sponsors to make orphan drugs available for treatment
on an ``open protocol'' basis before the drug has been approved for
general marketing. Any final rule based on this proposed rule would
clarify regulatory provisions in the 1992 final rule and make minor
improvements to address issues that have arisen since that rule took
effect.
    A final rule based on this proposal would further the main purpose
of the Orphan Drug Act to provide incentives to develop promising drugs
for rare diseases or conditions that would otherwise not be developed
and approved. It would do so in several ways: By enhancing clarity for
sponsors in seeking orphan-drug designations and orphan-drug exclusive
marketing approval; by providing an important incentive for one or more
sponsors to develop, or to continue to develop, a potentially promising
drug for use in all persons affected by a rare disease or condition,
rather than in just a subset of that orphan population, even after the
drug has been approved for a different subset of the population with
the disease or condition; and by helping ensure that the orphan
designation request, at the time it is granted, is consistent with the
purpose of the Orphan Drug Act despite a lapse of time between the date
of submission of the initial request and a sponsor's response to a
deficiency letter from FDA.
    An additional source of authority for this proposed rule is section
701 of the FD&C Act (21 U.S.C. 371). Under this section, FDA is
authorized to issue regulations for the efficient enforcement of the
FD&C Act. Any final rule based on this proposed rule would help the
efficient enforcement of the Orphan Drug Act provisions by enhancing
clarity and certainty in FDA's

administration of the orphan drug program.

V. Proposed Implementation Plan

    FDA proposes that these regulatory changes, where applicable, would
become effective 30 days after the date of publication of the final
rule. The final rule would apply only to original orphan-designation
requests submitted on or after the effective date of the final rule. It
would not apply to the following: (1) Amendments submitted on or after
the effective date regarding previously submitted designation requests,
or (2) responses to deficiency letters submitted on or after the
effective date regarding previously submitted requests. As proposed
here, the final rule would have no effect on the scope of or
eligibility for orphan-drug exclusive approval because it merely
clarifies existing FDA practice.

VI. Executive Order 13132: Federalism

    FDA has analyzed this proposed rule in accordance with the
principles set forth in Executive Order 13132. FDA has determined that
the proposed rule, if finalized, would not contain policies that have
substantial direct effects on the States, on the relationship between
the National Government and the States, or on the distribution of power
and responsibilities among the various levels of government.
Accordingly, the Agency tentatively concludes that the rule does not
contain policies that have federalism implications as defined in the
Executive order and, consequently, a federalism summary impact
statement is not required.

VII. Paperwork Reduction Act of 1995

    This proposed rule contains information collection provisions that
are subject to review by the Office of Management and Budget (OMB)
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). A
description of these provisions is given in the Description section of
this document an estimate of the annual reporting burden. Included in
the estimate is the time for reviewing instructions, searching existing
data sources, gathering and maintaining the data needed, and completing
and reviewing each collection of information.
    FDA invites comments on these topics: (1) Whether the proposed
collection of information is necessary for the proper performance of
FDA's functions, including whether the information will have practical
utility; (2) the accuracy of FDA's estimate of the burden of the
proposed collection of information, including the validity of the
methodology and assumptions used; (3) ways to enhance the quality,
utility, and clarity of the information to be collected; and (4) ways
to minimize the burden of the collection of information on respondents,
including through the use of automated collection techniques and other
forms of information technology, when appropriate.
    Title: Orphan Drug Regulations.
    Description: FDA is proposing to amend its regulations on orphan-
drug designation requests to clarify policy and make minor
improvements. The proposed revisions are intended to assist sponsors
who are seeking and who have obtained orphan-drug designations, as well
as FDA in its administration of the orphan drug program.
    One proposed revision is a requirement that sponsors include in
requests a chemical or meaningful descriptive name of the drug, if
neither a trade name nor a generic name is available. By providing such
information in the request for designation, sponsors would help ensure
that the name that FDA ultimately publishes under Sec.  316.28 upon
designation of the product is accurate and meaningful to the public.
Because sponsors are already required to include a description of the
drug in requests for designation, the proposed requirement to include a
chemical or meaningful descriptive name is not expected to require much
additional time or effort from sponsors.
    Based on historical data concerning the number of designation
requests for which neither a trade name nor a generic name for the drug
is available, FDA expects that about 20 requests per year would be
affected by this requirement. FDA estimates that it will take
approximately 0.2 hours, or 12 minutes, for sponsors to submit this
information. This estimate reflects both the length of time likely
required to submit the chemical name of the drug (less than 0.2 hours)
and the length of time likely required to submit a meaningful
descriptive name if a chemical name is not readily available (more than
0.2 hours).
    Another proposed revision is a requirement that sponsors respond to
deficiency letters from FDA on designation requests within 1 year of
issuance of the deficiency letter, unless within that timeframe the
sponsor requests in writing an extension of time to respond. FDA will
grant all reasonable requests for an extension. In the event the
sponsor fails to respond to the deficiency or request an extension of
time to respond within the 1-year timeframe, FDA may consider the
designation request voluntarily withdrawn.
    FDA believes this proposal is necessary to ensure that designation
requests do not become ``stale'' by the time they are granted, such
that the basis for the initial request may no longer hold. Granting
such designations despite a lapse of years and change in factual
circumstances concerning the disease or condition in question may not
serve the primary purpose of the Orphan Drug Act to provide incentives
for the development of drug products for ``rare diseases or
conditions'' as defined in section 526 of the FD&C Act.
    Based on historical data concerning the number of deficiency
letters that FDA has sent and the number of sponsors who have taken
longer than a year to respond, FDA estimates that it will receive
approximately 10 written requests each year for an extension of time to
respond. This number is likely an overestimate, because it is based on
historical data in the absence of any regulatory deadline for sponsors
to respond; FDA believes that at least some of the sponsors who have
taken longer than a year to respond have been capable of responding
earlier, but did not do so because they did not need to. FDA estimates
that it will take approximately 2 hours to prepare and submit each
extension request, including time to develop and articulate a rationale
for the requested extension and to obtain internal approval of the
request before submission to FDA.
    Description of Respondents: Persons and businesses, including small
businesses and manufacturers.

                                 Table 1--Estimated Annual Reporting Burden \1\
----------------------------------------------------------------------------------------------------------------
                                                     Number of                        Average
         21 CFR Section              Number of     Responses per   Total Annual     Burden per      Total Hours
                                    Respondents     Respondent       Responses       Response
----------------------------------------------------------------------------------------------------------------
316.20(b)(2)....................              20               1              20             0.2               4
                                                                                (12 minutes)
316.24(a).......................              10               1              10               2              20
                                 -------------------------------------------------------------------------------
    Total Burden Hours..........  ..............  ..............  ..............  ..............              24
----------------------------------------------------------------------------------------------------------------
\1\ There are no capital costs or operating and maintenance costs associated with this collection of
  information.

    Except with respect to the proposed revisions addressed in table 1
of this document, the revisions in this proposed rule clarify existing
regulatory language and do not constitute a substantive or material
modification to the approved collections of information in current part
316 (Cf. 5 CFR 1320.5(g)). The collections of information in current
part 316 have been approved by OMB in accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501-3520), under OMB control number
0910-0167.
    To ensure that comments on information collection are received, OMB
recommends that written comments be faxed to the Office of Information
and Regulatory Affairs, OMB, Attn: FDA Desk Officer, FAX:<PHONE_NUMBER>,
or e-mailed to<EMAIL_ADDRESS>All comments should be
identified with the title ``Orphan Drug Regulations.''
    In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C.
3407(d)), the Agency has submitted the information collection
provisions of this proposed rule to OMB for review. These requirements
will not be effective until FDA obtains OMB approval. FDA will publish
a notice concerning OMB approval of these requirements in the Federal
Register.

VIII. Analysis of Impacts

    FDA has examined the impacts of the proposed rule under Executive
Order 12866, Executive Order 13563, the Regulatory Flexibility Act (5
U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L.
104-4). Executive Orders 12866 and 13563 direct Agencies to assess all
costs and benefits of available regulatory alternatives and, when
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety, and other advantages; distributive impacts; and
equity). The Agency believes that this proposed rule is not a
significant regulatory action as defined by Executive Order 12866.
    The Regulatory Flexibility Act requires Agencies to analyze
regulatory options that would minimize any significant impact of a rule
on small entities. Because this proposed rule primarily clarifies
current practice and any costs would be very small, the Agency proposes
to certify that the final rule will not have a significant economic
impact on a substantial number of small entities.
    Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires
that Agencies prepare a written statement, which includes an assessment
of anticipated costs and benefits, before proposing ``any rule that
includes any Federal mandate that may result in the expenditure by
State, local, and Tribal governments, in the aggregate, or by the
private sector, of $100,000,000 or more (adjusted annually for
inflation) in any 1 year.'' The current threshold after adjustment for
inflation is $136 million, using the most current (2010) Implicit Price
Deflator for the Gross Domestic Product. FDA does not expect this
proposed rule to result in any 1-year expenditure that would meet or
exceed this amount.

A. Background

    Our experience with orphan-drug designation requests over many
years has led us to conclude that sponsors are confused by some
portions of the current regulatory language. The Agency receives dozens
of requests for orphan-drug designation each year that are deficient in
some way that would prevent designation. We observe the same types of
deficiencies suggesting some problematic areas in our regulations.
    Of the 324 requests for orphan-drug designation we received in
2010, 124 were denied or placed in abeyance so that the sponsor could
submit additional material to respond to the deficiencies. Of these, 79
were deficient because they did not identify an appropriate ``medically
plausible subset'' of a population with a non-rare disease or
condition. That nearly a quarter of the designation requests were
deficient in the subset analysis, and that problems with population
subsets constituted over half of the deficiencies, highlights the need
to clarify existing regulatory language regarding subsets.
    The confusion about regulatory language is not limited to issues
regarding population subsets. Many designation requests are deficient
because the submitted drug description is not adequate to establish
whether the drug is the same as one that has already been approved.
There are continuing problems with requests for drugs that are in fact
the same as drugs already approved but lack necessary information
regarding clinical superiority. Other requests lack the data to support
the scientific rationale for the use of the drug in a rare disease or
condition. Addressing these deficiencies and resolving sponsor
inquiries consumes sponsor and FDA resources and extends the orphan-
drug designation process. The process would be less costly to sponsors
and FDA if sponsors had an authoritative source of information about
basic program requirements.
    Basic program requirements are part of Federal regulation;
clarifying regulatory language to reduce costly confusion would have to
be done through rulemaking at the Federal level. This proposed rule
would clarify regulatory language to reduce sponsor and FDA costs and
streamline the orphan-drug designation process.

B. Benefits and Costs of the Proposed Rule

    This proposed rule would reduce costs to sponsors who might
otherwise submit deficient orphan-drug designation requests or face
additional costs to determine program requirements. It would benefit
sponsors and promote public health by clarifying requirements for
sponsors who would otherwise be discouraged from submitting designation
requests when their drug is in fact eligible for orphan-drug
designation. The proposed rule would also reduce costs to FDA of
responding to sponsor inquiries and

deficient designation requests. There would be small costs associated
with the requirement that sponsors either respond to deficiency letters
within a year or obtain an extension of time to respond. The proposed
rule has several elements, which we address in the order presented
earlier in this document.
    We propose to clarify what population or disease subsets may be
eligible for orphan-drug designation (Sec.  316.20(b)(6)). This action
merely clarifies longstanding policy but should reduce uncertainty
about the requirements for orphan-drug designation and result in fewer
requests that cannot be designated. With the improved information about
requirements for establishing population subsets, some sponsors may
realize that their drug is not eligible for orphan designation and they
would save the cost they would have otherwise incurred submitting a
request. FDA has recently estimated a burden of 150 hours to complete a
designation request (76 FR 3910 at 3911, January 21, 2011). At a
benefit-adjusted hourly wage of about $46 for a regulatory affairs
official, sponsors who do not submit a request that cannot be granted
would avoid $6,900 in labor costs.\3\ Under this proposed rule, other
sponsors would avoid the cost they would have otherwise incurred
addressing the subset deficiency. We do not have a precise estimate of
the time required to respond to a deficiency letter; using 40 hours as
a rough estimate implies $1,840 in avoided labor costs. We do not
possess a reliable estimate for the number of avoided deficiency
letters, but assuming FDA receives 79 subset-deficient requests each
year and one-half would not occur with the clarified regulatory
language, sponsors would avoid $72,680 in additional labor costs. FDA
would also avoid costs from responding to these requests.
---------------------------------------------------------------------------

    \3\ 2010 National Industry-Specific Occupational Employment and
Wage Estimates, U.S. Department of Labor Statistics, last modified
May 17, 2011 (http://www.bls.gov/oes/current/naics4_325400.htm);
mean compliance officer wage rate of $35.28 for pharmaceutical and
medicine manufacturing (NAICS 325400) plus a 30-percent increase for
benefits.
---------------------------------------------------------------------------

    It is longstanding FDA policy that a designation request for a drug
that is otherwise the same as a drug previously approved for the same
disease or condition must include a plausible hypothesis of clinical
superiority, regardless of whether the already approved drug was
designated as an orphan. FDA continues to receive requests that cannot
be designated because this policy is not explicit in current
regulation. This proposed rule would make this policy explicit,
reducing costs to sponsors and FDA by reducing the number of deficient
orphan-drug designation requests.
    FDA's longstanding practice has been that if a drug is approved for
only a subset of patients with a rare disease or condition, FDA may
grant orphan-drug designation and orphan-drug exclusive approval for
use of the drug in one or more of the remaining subsets of patients
with the rare disease or condition. Current Sec.  316.31 does not
explicitly mention subsets, which could deter confused sponsors from
pursuing designation for use of the drug in remaining subsets for which
the drug has not yet been approved. Clarifying this provision would not
change Agency policy but would benefit sponsors and public health by
reducing the risk of a sponsor failing to pursue designation when it
would otherwise do so.
    We propose to clarify the definition of clinical superiority to
make explicit that a drug shown to be clinically superior to an
approved drug for making a major contribution to patient care would
also have to be demonstrated to provide safety and effectiveness
comparable to the approved drug (Sec.  316.3(b)(3)(iii)). This revision
is consistent with longstanding policy and would impose no new costs.
Benefits from a minor clarification to a requirement that applies only
under unusual circumstances would be too small to reliably estimate.
    We propose to modify and clarify our requirements for the drug
name. Current regulations require the sponsor to submit the generic and
trade name of the drug, but do not specify how to name a drug for which
there is no generic name or trade name. In the past, sponsors have
provided FDA with their internal business codes, which are meaningless
to the general public. We propose to require that a drug that has
neither a generic nor a trade name be identified according to its
chemical name or a meaningful descriptive name (i.e., one that would be
meaningful to the public if published). Descriptive names are readily
accessible to the sponsor and could be included in a designation
request as easily as an internal business code and any costs would be
too small to meaningfully quantify.
    We propose to clarify our requirements for the drug description and
for the data to support a drug's scientific rationale in an orphan-drug
designation request. Some requests for orphan-drug designation cannot
be acted upon because the drug descriptions are not adequate to
determine whether the drug in the submission is the same as a
previously approved drug. This proposed rule would clarify the required
drug description in Sec.  316.20(b)(4), reducing the frequency of
deficient requests. Some requests lack the data to support a scientific
rationale, while others include substantial additional data not needed
to obtain designation. In both situations, sponsors incur costs that
could be avoided with clearer requirements. We do not know the
frequency of these data problems nor do we know the costs associated
with them, but this proposal would reduce sponsor and FDA costs.
    We propose to eliminate Sec.  316.20(b)(9), which requires that the
sponsor submitting the request state whether it is the real party in
interest of the development and the intended or actual production and
sales of the product. This provision merely obtains information from
the sponsor; it does not provide a basis to disqualify any entity from
pursuing orphan-drug designation. There is no known use for the
information and it is our understanding that this provision may be
discouraging sponsors from using agents to submit requests on their
behalf, potentially increasing the cost to obtain orphan-drug
designation. We do not possess a reliable estimate for this cost.
Eliminating this provision would clarify our longstanding policy to
accept submissions from agents, which may reduce sponsor costs. Halting
the collection of information for which there is no known purpose would
not negatively impact public health.
    We propose to clarify the requirement regarding the timing of
orphan-drug designation requests (Sec.  316.23(a)). A sponsor may not
submit an orphan-drug designation request after it has submitted a
marketing application for the drug for that use. It is not clear in the
current regulatory language that one sponsor's marketing application
would not prevent a different sponsor from submitting a request for
orphan designation for the same drug for the same orphan use and that
this subsequent sponsor would not have to submit a plausible hypothesis
of clinical superiority. Clarifying current policy would benefit
sponsors and public health by reducing the likelihood of a confused
sponsor failing to seek orphan-drug designation for an eligible
product.
    We propose a 1-year time limit for sponsors to respond to
deficiency letters or obtain a time extension (Sec.  316.24(a)). Based
on our experience with the time required to address particular
submission deficiencies and the observed variation in time for sponsors
to respond, some submission requests

do not appear to be part of an active effort to obtain orphan-drug
designation. We know of no public health benefit from open inactive
designation requests. We do not know if they exist because sponsors
gain nothing from the cost of formally withdrawing a request or because
there may be a strategic advantage to an inactive request for
designation. Current regulations do not impose time limits on sponsors
replying to FDA deficiency letters and we have no mechanism to
encourage sponsors to continue to actively pursue designation. Sponsors
who would otherwise respond to a deficiency letter within 1 year would
be unaffected by this proposal. Sponsors actively pursuing designation
but needing more than 1 year to respond to a deficiency letter would be
expected to submit a time extension request to FDA. We assume approval
for all extension requests from sponsors actively pursuing orphan-drug
designation and estimate a request would require 2 hours of time from a
regulatory affairs specialist. At a benefit-adjusted hourly wage of
$46, the cost to submit an extension request is $92. Based on our
experience with deficiency letters and the frequency of responses
requiring more than 1 year, we estimate 10 requests for additional time
each year. The estimated annual cost of this provision is $920. We
assume sponsors not actively pursuing designation would not obtain
extensions and their requests would be considered to be withdrawn 1
year after the deficiency letter. We do not possess a reliable estimate
of the number of designation requests that would be withdrawn under
this proposal. Withdrawing inactive designation requests would improve
information about potential future orphan drugs, which would be
beneficial to potential sponsors and to the general public. There is at
least a potential for a cost to some sponsors, as we cannot rule out
the possibility of some small advantage to holding an inactive
designation request. Nevertheless, we estimate the cost of a withdrawal
in this case to be very small and to be extremely small relative to the
benefits of improved public information and the streamlined orphan-drug
designation process.
    According to longstanding policy, FDA does not recognize orphan-
drug exclusive approval when the sponsor of a drug that is otherwise
the same as a drug already approved fails to demonstrate clinical
superiority in its marketing application. We propose to make this
policy explicit by adding proposed Sec.  316.34(c). This clarification
applies to a rare set of circumstances and benefits would be too small
to reliably estimate.
    We do not possess a single bottom line estimate for the total
monetized benefit of this proposed rule. Avoiding half of the
designation requests that are deficient because of problems
establishing population subsets would save sponsors an estimated
$73,000 annually. Subset problems account for more than half of all
deficiencies, so we estimate the other clarifications to reduce
deficient requests would reduce sponsor costs by an additional amount
less than $73,000. The total estimated cost of this proposed rule is an
annual $920, attributable to the submission of requests for additional
time to respond to deficiency letters.

C. Small Business Analysis

    This proposed rule would apply to the sponsors of orphan-drug
designation requests. According to the Table of Small Business Size
Standards, the U.S. Small Business Administration (SBA) considers
pharmaceutical preparation manufacturing entities (NAICS 325412) with
750 or fewer employees and biological product (except diagnostic)
manufacturing entities (NAICS 325414) with 500 or fewer employees to be
small.\4\ According to the 2007 Economic Census, annual shipments for
the 284 establishments in NAICS 325412 with 0 to 4 employees are $240
million, which is $840,000 per establishment. Total annual shipments
for the 250 establishments in NAICS 325414 with 0 to 49 employees (the
smallest group with value of shipment data) are $720 million, which is
$2.9 million per establishment.
---------------------------------------------------------------------------

    \4\ U.S. Small Business Administration, ``Table of Small
Business Size Standards Matched to North American Industry
Classification System Codes,'' November 5, 2010, http://www.sba.gov/sites/default/files/Size_Standards_Table.pdf.
---------------------------------------------------------------------------

    Most of the provisions of this proposed rule would clarify
regulatory language consistent with current practice, imposing no new
costs. The proposal to create a 1-year time limit to respond to FDA
deficiency letters would result in estimated costs of $92 per extension
request. Costs from the withdrawal of inactive submissions would be too
small to reliably quantify. A common threshold for determining a
significant impact is 1 percent of annual shipments. Because the
estimated cost of this proposed rule would be approximately 1/100 of 1
percent of annual shipments for the smallest affected establishments,
we conclude this proposed rule, if finalized, would not constitute a
significant impact on a substantial number of small entities.

IX. Request for Comments

    Interested persons may submit to the Division of Dockets Management
(see ADDRESSES) either electronic or written comments regarding this
document. As noted previously in this document, if you have comments on
specific provisions of the proposed regulation, we request that you
identify these provisions in your comments. In addition, if you have
concerns that would be addressed by alternative text for the
regulation, we request that you provide this alternative text in your
comments. It is only necessary to send one set of comments. It is no
longer necessary to send two copies of mailed comments. Identify
comments with the docket number found in brackets in the heading of
this document. Received comments may be seen in the Division of Dockets
Management between 9 a.m. and 4 p.m., Monday through Friday.

List of Subjects in 21 CFR Part 316

    Administrative practice and procedure, Drugs, Investigations,
Medical research, Orphan drugs, Reporting and recordkeeping
requirements.
    Therefore, under the Federal Food, Drug, and Cosmetic Act and under
authority delegated to the Commissioner of Food and Drugs, 21 CFR part
316 is proposed to be amended as follows:

PART 316--ORPHAN DRUGS

    1. The authority citation for 21 CFR part 316 continues to read as
follows:

    Authority: 21 U.S.C. 360aa, 360bb, 360cc, 360dd, 371.

    2. Section 316.1 is amended by revising paragraphs (a)(1)(iii) and
(a)(2) to read as follows:

Sec.  316.1  Scope of this part.

    (a) * * *
    (1) * * *
    (iii) Requests for gaining exclusive approval for a drug for a rare
disease or condition.
    (2) Allowing a sponsor to provide an investigational drug under a
treatment protocol to patients who need the drug for treatment of a
rare disease or condition.
* * * * *
    3. Section 316.3 is amended by revising paragraphs (b)(3)
introductory text, (b)(3)(i), (b)(3)(iii), and (b)(12) to read as
follows:

Sec.  316.3  Definitions.

* * * * *
    (b) * * *
    (3) Clinically superior means that a drug is shown to provide a
significant therapeutic advantage over and above

that provided by an approved drug (that is otherwise the same drug) in
one or more of the following ways:
    (i) Greater effectiveness than an approved drug (as assessed by
effect on a clinically meaningful endpoint in adequate and well
controlled clinical trials). Generally, this would represent the same
kind of evidence needed to support a comparative effectiveness claim
for two different drugs; in most cases, direct comparative clinical
trials would be necessary; or
* * * * *
    (iii) In unusual cases, where neither greater safety nor greater
effectiveness has been shown, a demonstration that the drug provides
safety and effectiveness comparable to the approved drug and otherwise
makes a major contribution to patient care.
* * * * *
    (12) Orphan-drug exclusive approval or exclusive approval means
that, effective on the date of FDA approval as stated in the approval
letter of a marketing application for a sponsor of a designated orphan
drug, no approval will be given to a subsequent sponsor of the same
drug for the same use for 7 years, except as otherwise provided by law
or in this part.
* * * * *
    4. Section 316.4 is revised to read as follows:

Sec.  316.4  Address for submissions.

    All correspondence and requests for FDA action pursuant to the
provisions of this rule should be addressed as follows: Office of
Orphan Products Development, Food and Drug Administration, 10903 New
Hampshire Ave., Bldg. 32, rm. 5271, Silver Spring, MD 20993.
    5. Section 316.20 is amended by revising paragraphs (a), (b)(2)
through (b)(6), and by removing paragraph (b)(9), to read as follows:

Sec.  316.20  Content and format of a request for orphan-drug
designation.

    (a) A sponsor that submits a request for orphan-drug designation of
a drug for a specified rare disease or condition shall submit each
request in the form and containing the information required in
paragraph (b) of this section. A sponsor may request orphan-drug
designation of a previously unapproved drug, or of a new use for an
already marketed drug. In addition, a sponsor of a drug that is
otherwise the same drug as an already approved drug may seek and obtain
orphan-drug designation for the subsequent drug for the same rare
disease or condition if it can present a plausible hypothesis that its
drug may be clinically superior to the first drug. More than one
sponsor may receive orphan-drug designation of the same drug for the
same rare disease or condition, but each sponsor seeking orphan-drug
designation must file a complete request for designation as provided in
paragraph (b) of this section.
    (b) * * *
    (2) The name and address of the sponsor; the name of the sponsor's
primary contact person and/or resident agent including title, address,
and telephone number; the generic and trade name, if any, of the drug,
or, if neither is available, the chemical name or a meaningful
descriptive name of the drug; and the name and address of the source of
the drug if it is not manufactured by the sponsor.
    (3) A description of the rare disease or condition for which the
drug is being or will be investigated, the proposed use of the drug,
and the reasons why such therapy is needed.
    (4) A description of the drug, to include the identity of the
active moiety if it is a drug composed of small molecules, or of the
principal molecular structural features if it is composed of
macromolecules; its physical and chemical properties, if these
characteristics can be determined; and a discussion of the scientific
rationale to establish a medically plausible basis for the use of the
drug for the rare disease or condition, including all data from in
vitro laboratory studies, preclinical efficacy studies conducted in an
animal model for the human disease or condition, and clinical
investigations of the drug in the rare disease or condition that are
available to the sponsor, whether positive, negative, or inconclusive.
Animal toxicology studies are generally not relevant to a request for
orphan-drug designation. Copies of pertinent unpublished and published
papers are also required.
    (5) Where the sponsor of a drug that is otherwise the same drug as
an already approved drug seeks orphan-drug designation for the
subsequent drug for the same rare disease or condition, an explanation
of why the proposed variation may be clinically superior to the first
drug.
    (6) Where a drug is under development for only a subset of persons
with a particular disease or condition that otherwise affects 200,000
or more people, a demonstration that, due to one or more properties of
the drug, the remaining persons with such disease or condition would
not be appropriate candidates for use of the drug.
* * * * *
    6. Section 316.21 is amended by revising paragraph (a)(1) and the
introductory text of paragraph (b) to read as follows:

Sec.  316.21  Verification of orphan-drug status.

    (a) * * *
    (1) Documentation as described in paragraph (b) of this section
that the number of people affected by the disease or condition for
which the drug is to be developed is fewer than 200,000 persons; or
* * * * *
    (b) For the purpose of documenting that the number of people
affected by the disease or condition for which the drug is to be
developed is less than 200,000 persons, ``prevalence'' is defined as
the number of persons in the United States who have been diagnosed as
having the disease or condition at the time of the submission of the
request for orphan-drug designation. To document the number of persons
in the United States who have the disease or condition for which the
drug is to be developed, the sponsor shall submit to FDA evidence
showing:
* * * * *
    7. Section 316.23 is revised to read as follows:

Sec.  316.23  Timing of requests for orphan-drug designation;
designation of already approved drugs.

    (a) A sponsor may request orphan-drug designation at any time in
its drug development process prior to the time that sponsor submits a
marketing application for the drug for the same rare disease or
condition.
    (b) A sponsor may request orphan-drug designation of an already
approved drug for an unapproved use without regard to whether the prior
marketing approval was for a rare disease or condition.
    8. Section 316.24 is amended by revising the section heading;
redesignating paragraphs (a) and (b) as (b) and (c), respectively; and
adding a new paragraph (a), to read as follows:

Sec.  316.24  Deficiency letters and granting orphan-drug designation.

    (a) FDA will send a deficiency letter to the sponsor if the request
for orphan-drug designation lacks information required under Sec. Sec.
316.20 and 316.21, or contains inaccurate or incomplete information.
FDA may consider a designation request voluntarily withdrawn if the
sponsor fails to respond to the deficiency letter within 1 year of
issuance of the deficiency letter, unless within that same timeframe
the sponsor requests in

writing an extension of time to respond. This request must include the
reason(s) for the requested extension and the length of time of the
requested extension. FDA will grant all reasonable requests for an
extension. In the event FDA denies a request for an extension of time,
FDA may consider the designation request voluntarily withdrawn and, if
so, will notify the sponsor in writing.
* * * * *
    9. Section 316.25 is amended by revising paragraphs (a)(1)(ii) and
(a)(3) to read as follows:

Sec.  316.25  Refusal to grant orphan-drug designation.

    (a) * * *
    (1) * * *
    (ii) Where the drug is intended for prevention, diagnosis, or
treatment of a disease or condition affecting 200,000 or more people in
the United States, the sponsor has failed to demonstrate that there is
no reasonable expectation that development and production costs will be
recovered from sales of the drug for such disease or condition in the
United States. A sponsor's failure to comply with Sec.  316.21 shall
constitute a failure to make the demonstration required in this
paragraph.
* * * * *
    (3) The drug is otherwise the same drug as an already approved drug
for the same rare disease or condition and the sponsor has not
submitted a medically plausible hypothesis for the possible clinical
superiority of the subsequent drug.
* * * * *
    10. Section 316.26 is revised to read as follows:

Sec.  316.26  Amendment to orphan-drug designation.

    (a) At any time prior to approval of a marketing application for a
designated orphan drug, the sponsor holding designation may apply for
an amendment to the designated use if the proposed change is due to new
and unexpected findings in research on the drug, information arising
from FDA recommendations, or unforeseen developments in treatment or
diagnosis of the disease or condition.
    (b) FDA will grant the amendment if it finds that the initial
designation request was made in good faith and that the amendment is
intended to conform the orphan-drug designation to the results of
unanticipated research findings, to unforeseen developments in the
treatment or diagnosis of the disease or condition, or to changes based
on FDA recommendations, and that, as of the date of the submission of
the amendment request, the amendment would not result in exceeding the
prevalence or cost recovery thresholds in Sec.  316.21(a)(1) or (a)(2)
upon which the drug was originally designated.
    11. Section 316.28 is revised to read as follows:

Sec.  316.28  Publication of orphan-drug designations.

    Each month FDA will update a publicly available cumulative list of
all drugs designated as orphan drugs. This list will be made available
on the Agency's Internet site. In addition, a cumulative, annually
updated list of all designated drugs will be placed on file at the FDA
Division of Dockets Management. These lists will contain the following
information:
    (a) The name and address of the sponsor;
    (b) The generic name and trade name, if any, or, if neither is
available, the chemical name or a meaningful descriptive name of the
drug;
    (c) The date of the granting of orphan-drug designation; and
    (d) The designated use in the rare disease or condition.
    12. Section 316.31 is amended by revising paragraph (a)
introductory text, by redesignating paragraph (b) as paragraph (c), and
by adding new paragraph (b) to read as follows:

Sec.  316.31  Scope of orphan-drug exclusive approval.

    (a) After approval of a sponsor's marketing application for a
designated orphan drug for use in the rare disease or condition, or a
subset thereof, concerning which orphan-drug designation was granted,
FDA will not approve another sponsor's marketing application for the
same drug for the same use before the expiration of 7 years from the
date of such approval as stated in the approval letter from FDA, except
that such a marketing application can be approved sooner if, and at
such time as, any of the following occurs:
* * * * *
    (b) Orphan-drug exclusive approval protects only the approved
indication or use of a designated drug. If such approved indication or
use is limited to a particular subset of persons with a rare disease or
condition, FDA may later approve the drug for use in one or more
additional subsets and, if the sponsor who obtains approval in the
additional subset(s) has orphan-drug designation for the drug, FDA will
recognize a new orphan-drug exclusive approval for the use in the new
subset(s) of persons with the rare disease or condition from the date
of approval of the drug for use in the new subset(s).
* * * * *
    13. Section 316.34 is amended by adding paragraph (c) as follows:

Sec.  316.34  FDA recognition of exclusive approval.

* * * * *
    (c) If a drug is otherwise the same drug as a previously approved
drug, FDA will not recognize orphan-drug exclusive approval if the
sponsor fails to substantiate, at the time of marketing approval, the
hypothesis of clinical superiority over the previously approved drug
that formed the basis for designation.

    Dated: October 13, 2011.
Leslie Kux,
Acting Assistant Commissioner for Policy.
[FR Doc. 2011-27037 Filed 10-18-11; 8:45 am]
BILLING CODE 4160-01-P