FD&C Amendments at Work in the Pharmaceutical Industry - Are They Working for Your Company?

For Pharmaceuticals and Biotechnology

The FD&C (Food, Drug and Cosmetic) Act, initially passed in 1938, has greatly influenced, and continues to influence, the ebb and flow of the pharmaceutical industry. The FDA also plays a big part in that influence since it is common for the FDA to interpret the Act for executive purposes.

Many of these amendments directly influence the pharmaceutical industry on a daily basis.

The Amendments
From 1938 to the present day additional legislation has been amended to the FD&C Act, creating new ripples within the pharmaceutical sector. Many of these amendments directly influence the pharmaceutical industry on a daily (or perhaps on a more intermittent) basis.

  • What are these amendments?
  • Why were the amendments initially proposed?
  • What has been accomplished thus far as these amendments have been enforced?

This article attempts to answer these three questions as they relate to five of the FD&A amendments: the Orphan Drug Act of 1983; the Drug Price Competition and Patent Term Restoration Act of 1984; the Prescription Drug Marketing Act of 1987; the Prescription Drug Amendments of 1992; and the Best Pharmaceuticals for Children Act of 2002.

The Orphan Drug Act (1983)
The Orphan Drug Act of 1983, as many pharmaceutical professionals are aware, was initially proposed as a means to ensure that those persons afflicted by unique diseases (i.e., diseases that burden fewer than 200,000 persons within the United States) would have access to medications (as well as blood products and vaccines)1 that would otherwise remain unproduced because of lack of financial incentive on the part of would-be developers/manufacturers of potentially helpful pharmaceutical and medical device products.

Before the Orphan Drug Act was passed, legislators could see that for small populations with unique diseases it was almost impossible to find helpful treatments and medications. According to the FDA's website, for instance, "there [were] many diseases and conditions, such as Huntington's disease, myoclonus, ALS (Lou Gehrig's disease), Tourette syndrome, and muscular dystrophy which affect[ed] etc. such small numbers of individuals residing in the United States that the diseases and conditions are considered rare in the United States," and that "adequate drugs for many of such diseases and conditions have not been developed," and that "there is reason to believe that some promising orphan drugs will not be developed unless changes are made in the applicable federal laws to reduce the costs of developing such drugs and to provide financial incentives to develop such drugs."2

Has the Amendment Worked?
It appears that in many ways the amendment has achieved its intended purpose(s). According to the FDA3, the Orphan Drug Act of 1983 (including subsequent amendments) has been helpful in a variety of ways. For example, the amendment has:

  • Allowed the government to issue grants for clinical testing, which in turn allows scientists to gain the means to research and discover those compounds best suited to those persons who might otherwise have remained completely devoid of medication or treatment that would alleviate their pain or prevent death;
  • Allowed the government to provide tax credits for clinical research;
  • Provided assistance for clinical research study design;
  • Provided production companies with the exclusive ability to market the drug/vaccine for seven years;
  • Allowed filing fees associated with the Prescription Drug User Fee Act to be waived, which over time saves orphan drug producer millions of dollars.

The Drug Price Competition and Patent Term Restoration Act (1984)
Most patents, by law, will last 20 years after a patent has been filed. However, for a pharmaceutical company, a 20-year drug patent duration seems painfully short when one considers the time required (usually anywhere from 8-13 years) to develop, manufacture and approve a product before it can be marketed. Many pharmaceutical companies are left with a slim 6-8 years for marketing. For many companies that can represent a loss of millions--perhaps billions--of revenue dollars.

For this reason Congress enacted the Drug Price Competition and Patent Term Restoration Act of 1984 which allows pharmaceutical companies (when certain regulations are met) to extend the duration of their drug patents (up to 5 years) for extended protection during the marketing stage.

The FDA's 21 CFR Part 60 regulations determine whether or not a company can extend their patent.4

The amendment also allows generic drug manufacturers to file ANDAs (Abbreviated New Drug Applications) and provides several months of exclusivity to the developer/manufacturer if they are the first company to file the ANDA against a patent holder.5

Has the Amendment Worked?
Whether or not this amendment has succeeded is certainly debatable but there have been results that for many groups have been positive. Take for instance:

"The Drug Price Competition and Patent Term Restoration Act of 1984 (DPC-PTR Act), also known as the Hatch-Waxman Act, achieved many of its goals. Generic drugs became a major force in the pharmaceutical industry, quickly penetrating into the marketplace. Shortly after the enactment of the Act, a generic drug could capture thirty percent of the market in a single year after the expiration of a branded product's patent. One startling example of this was Naprosene. Three months after the patent on Naprosene, seventy-five percent of its market share was lost to the generic product."6

And for companies focused on research vs. generic production?

"Research companies, in losing their exclusive markets for off-patent drugs, were pushed into increased research and development to search for new and more profitable drugs. "For research-intensive companies, the incentive of longer patent protection. . . has led to a large increase in the commitment to research in pharmaceuticals."7

The Prescription Drug Marketing Act of 1987
One of the amplest problems for the FDA when striving to keep many pharmaceutical companies in check was--and still is--the amount of deception that is utilized in pharmaceutical marketing practices. Today, for instance, the FDA might be focused on labeling or advertising, but in 1987, one of the main issues that led to the Prescription Drug Marketing Act of 1987 was reimportation, i.e., the importation of drugs previously shipped abroad.

According to the FDA website, one of the main reasons for the Prescription Drug Marketing Act of 1987 is to " ban the reimportation of drugs produced in the United States."

Why the ban?
The FDA described the dilemma: "Large amounts of drugs are being reimported to the United States as American goods returned. These imports are a health and safety risk to American consumers because they may have become subpotent or adulterated during foreign handling and shipping."8

These deceptions or misunderstandings also led to a "cover for the importation of foreign counterfeit drugs,"9 leaving the FDA with too little time to track the guilty culprits. The distribution of drugs could simply not be tracked as effectively as it otherwise could have been. Enter, therefore, the Prescription Drug Marketing Act of 1987.

Has the Amendment Worked?
The amendment in many ways may have achieved its purposes but it has also served to frustrate many professionals within the industry. Take for example an article published on marketwatch.com which states that:

"Under an amendment of the 20-year-old statute -- recently blocked from enactment by a temporary court injunction -- wholesalers would be required to provide a painstaking itinerary, or "pedigree," that lists who handles all drugs from factory to consumer.
"But it also exempts a drugmaker's "authorized distributor" from having to provide this document, a standing that Cardinal, McKesson and Amerisource hold in virtually all situations. Along with that, many drugmakers deal almost exclusively with these three companies, forcing smaller wholesalers to get product through them."10

In other words, the amendment may have resulted in a sort of monopoly of authorized distributors that limits the options of drug makers.

The Best Pharmaceuticals for Children Act (2002)
The Best Pharmaceuticals for Children Act, also known as the BPCA, was passed to encourage clinical testing for medicines specified to child populations. According to an online academic paper:

"Congress passed the BPCA in response to the modest success of its earlier effort to promote pediatric clinical testing, the pediatric exclusivity provision of the Food and Drug Administration Modernization Act of 1997 ("FDAMA").
"With both the 1997 and 2002 efforts, Congress has attempted to address the dearth of information about the safety and effectiveness of drugs that children commonly use."11

Has the Amendment Worked?
According to the paper quoted above:

"While the BPCA is a strong step forward for children's health, it comes at a significant price. The six-month patent extensions cost consumers hundreds of millions of dollars because of the delay in cheaper, generic drugs reaching the market. In addition to the patent extensions, taxpayers will fund the drug studies that manufacturers refuse to conduct, which average about $3.87 million per drug. For fiscal year 2002, Congress appropriated $200 million to that end."12

According to William Howard Taft, "The world is not going to be saved by legislation," but it is obvious nevertheless that legislation certainly has a powerful affect (whether for good or for bad) on the pharmaceutical industry behemoth.

Pharmaceutical companies must therefore constantly evolve to meet the pressures of additional and/or changing regulations and guidances. This may require new process management strategies and new technology enablers that function within large-scale enterprises.


1. http://www.fda.gov/consumer/updates/oda020808.html#orphan, http://www.fda.gov/orphan/oda.htm2. http://www.fda.gov/orphan/oda.htm3. http://www.fda.gov/consumer/updates/oda020808.html#oda4. http://www.fda.gov/CDER/about/smallbiz/patent_term.htm5. http://en.wikipedia.org/wiki/Drug_Price_Competition_and_Patent_Term_Restoration_Act6-7. http://leda.law.harvard.edu/leda/data/509/LeeD.pdf8-9. http://www.fda.gov/opacom/laws/pdma.html10-12. http://www.law.harvard.edu/students/orgs/jol/vol40_1/hammer-breslow.pdf

Marci Crane is a marketing communication specialist at MasterControl Inc., a global provider of GxP process and document management software solutions for life science companies (www.mastercontrol.com).

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