
[Federal Register Volume 76, Number 202 (Wednesday, October 19, 2011)]
[Proposed Rules]
[Pages 64868-64879]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[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: 301-827-6870.
     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, 301-796-8660.

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

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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

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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.

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    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

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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

[[Page 64873]]

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

[[Page 64874]]

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.

[[Page 64875]]



                                 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: 202-395-6974, 
or e-mailed to oira_submission@omb.eop.gov. 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

[[Page 64876]]

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

[[Page 64877]]

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

[[Page 64878]]

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

[[Page 64879]]

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


