The Orphan Drug Act and Catalyst Pharmaceuticals, Inc., v. Becerra

August 17, 2023 R47653

The Orphan Drug Act and Catalyst
August 17, 2023
Pharmaceuticals, Inc., v. Becerra
Hannah-Alise Rogers
Orphan drugs are used to treat rare diseases and conditions, but they can be costly to produce and
Legislative Attorney
are generally used to treat fewer than 200,000 people in the United States. In 1983, Congress

enacted the Orphan Drug Act (ODA) as a way to incentivize the development and marketing of
orphan drugs. Since that time, more than 500 orphan drugs have been developed in the United

States. The Food and Drug Administration (FDA) oversees the designation and approval of
orphan drugs.
The ODA incentivizes the production of orphan drugs through two main components: (1) orphan-drug designation and (2)
orphan-drug exclusivity. A sponsor may apply for an orphan-drug designation at any time during the drug development
process by filing an application with the FDA. Doing so entitles the sponsor to certain benefits, including tax credits, grant
funding, and a waiver of the FDA User Fee. If the FDA approves an orphan drug for marketing, the sponsor is then entitled to
a seven-year exclusivity period, during which time the FDA cannot approve the same drug for the same disease or condition
for marketing.
The scope of the ODA’s orphan-drug exclusivity periods has been extensively litigated over the last 40 years. The U.S. Court
of Appeals for the Eleventh Circuit recently interpreted the meaning of the ODA provision “same drug for the same disease
or condition” in Catalyst Pharmaceuticals, Inc. v. Becerra. The FDA argued that the ODA’s phrasing of “same drug for the
same disease or condition” was ambiguous and thus that the court should give deference to its regulations, which limit
exclusivity to the “same drug” for the “same use or indication.” Siding with a manufacturer, the court held that the FDA’s
interpretation of the ODA was not intitled to Chevron deference because the ODA’s exclusivity provision was not
ambiguous. The court held that the FDA should not have granted the marketing application for an orphan drug during the
seven-year exclusivity period of the same orphan drug that is used to treat the same disease but is indicated for a different
patient population.
The FDA complied with the 11th Circuit’s order in Catalyst, but it issued a Federal Register notice in January 2023
announcing that it would continue to apply its existing regulations when reviewing marketing applications for orphan drugs.
The decision created some uncertainty for orphan drug manufacturers. Several Members of Congress have similarly indicated
their disagreement with the 11th Circuit ruling and support legislation to codify the FDA’s existing regulation.

Congressional Research Service

The Orphan Drug Act and Catalyst Pharmaceuticals, Inc., v. Becerra

The Orphan Drug Act and FDA Regulations:
Setting the Stage for Ensuing Litigation
The cost and availability of prescription drugs have been of congressional interest, and
expenditures related to the research and development of new drugs are a significant driver of drug
costs.1 A 2016 report by the Tufts Center for Drug Development estimated the pretax and
preapproval cost of developing a Food and Drug Administration (FDA)-approved prescription
drug was $2.6 billion, while a 2016 Department of Health and Human Services (HHS) report
estimated a range from $1.2 billion to $2.6 billion.2 Given the extraordinary cost associated with
development and marketing of a new drug, manufacturers aim to recover much of their research
and development costs through drug sales.
Historically, drugs designed to treat rare diseases and conditions received little attention from
U.S. drug manufacturers, given the high cost of development and lack of widespread use.3 These
drugs became known as “orphan drugs.”4 In the 1970s, there was growing concern about the need
for drugs to treat rare diseases; at that time, FDA established two committees to study the
“inadequate motivation, and resources, for the development and distribution of drugs for rare
diseases.”5
Congress began investigating and holding hearings on the development of drugs for rare diseases
in June 1980.6 As part of this effort, the House Subcommittee on Health and the Environment
surveyed a number of federal agencies, universities, and pharmaceutical companies to gather
information about various drug products used to treat rare diseases in the United States.7 The
results of the survey, published in 1982, showed that so-called orphan drugs were generally not
profitable, many were not patentable, and it was difficult for drug sponsors to conduct clinical
trials to demonstrate their safety and effectiveness—in part because of the small patient
populations they were developed to treat.8
Given the high cost of drug development and approval in the United States, Congress found that
“it is not financially feasible, except as a public service, for a pharmaceutical manufacturer to
expend research and development funds” on orphan drugs, which are typically used only to treat
small subsets of the population.9 So in 1983, Congress enacted the Orphan Drug Act (ODA) as a
way to “facilitate the development of drugs for rare diseases or conditions,”10 primarily by

1 See generally, CRS Report R44832, Frequently Asked Questions About Prescription Drug Pricing and Policy, by
Suzanne M. Kirchhoff et al. (2021), at 3-6, and Appendix.
2 Id. at 29. As discussed in the report, it is difficult to estimate an exact figure of the average research and development
costs because detailed information about the cost of developing specific drugs is generally not available. As a
contextual description for the litigation analyzed, this report describes different studies that estimate the average
research and development costs, along with their varying methodologies.
3 See James T. O’Reilly and Katherine A. Van Tassel, Orphan Drug Act & Competition Among Drug Makers, 13 FOOD
AND DRUG ADMIN. 104, Fourth Ed. (Dec. 2022).
4 Id.
5 H.R. REP. 97-840, at 6, 1982 U.C.C.A.N. at 3579.
6 Id.
7 Id. at 7, 1982 U.C.C.A.N. at 3579.
8 Id.
9 H.R. REP. 97-840, at *6.
10 H.R. REP. NO. 97-840 (1982) at 5 (1982), as reprinted in 1982 U.S.C.C.A.N. 3577, 35577; Pub. L. No. 97-414, 96
Stat. 2049 (1983) (codified as amended at 21 U.S.C. §§ 360aa-360ee). The ODA amended the Food, Drug and
Cosmetic Act (FDCA).
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establishing financial incentives—including tax credits, grant funding, and market exclusivity—
to encourage pharmaceutical companies to develop and market orphan drugs in the United
States.11
The FDA, a division of HHS, administers the ODA. The statute does not explicitly define
“orphan drug,” but FDA has issued regulations to define the term as a drug “intended for use in a
rare disease or condition,” which is consistent with the statute’s phrasing.12 The ODA contains
two main components: (1) orphan-drug designation, as described in Section 360bb, and (2)
orphan-drug market exclusivity, as described in Section 360cc.13 Drug manufacturers may apply
to obtain an orphan-drug designation for drugs in development. If granted, orphan-drug
designation enables a drug manufacturer to access financial assistance for drug research and
development, including tax credits for clinical testing of the drug, grant funding to cover research
costs, and a waiver of FDA’s Prescription Drug User Fee if it ultimately submits an application
for FDA approval of the drug.14 If a drug manufacturer receives FDA approval to market a drug
designated as an orphan drug, the manufacturer is generally entitled to a seven-year exclusivity
period. During the seven-year orphan-drug exclusivity period, the FDA cannot approve an
application from a different drug manufacturer for approval15 to market the same drug for the
same disease or condition.16 These statutory mechanisms of designation, approval, and
exclusivity are intended to work together to promote the research and development of orphan
drugs.17
Orphan Drug Designation
Orphan-drug designation allows drug manufacturers18 and sponsors19 to access financial benefits
and incentives early in the drug development process, and it also assures orphan-drug exclusivity
for a successfully marketed drug, which aids in the recoupment of the sizable upfront investment

11 Id. For more information, see Shashank Upadhye, GENERIC PHARMACEUTICAL PATENT AND FDA LAW,
§ 23:15 (2022 ed.). See also H.R. Rep. 97-840, at 8, 1982 U.C.C.A.N. at 3580–81 (explaining that Congress developed
the orphan-drug designation process to “assure that the financial incentives and other regulatory provisions of the
[FDCA] apply to drugs for rare diseases and conditions.”).
12 21 C.F.R. § 316.3(b)(10) (2023). Unless otherwise noted, this report uses “drugs” to include both “small-molecule”
drugs products as well as biological products. For more information on the differences between small-molecule drugs
and biological products, see CRS Report R45666, Drug Pricing and Intellectual Property Law: A Legal Overview for
the 116th Congress, coordinated by Kevin J. Hickey (2019).
13 21 U.S.C. §§ 360bb (orphan-drug designation), 360cc (orphan-drug exclusivity).
14 21 U.S.C. §360bb(a)(1); see also U.S. FOOD AND DRUG ADMIN., Rare Diseases at FDA,
https://www.fda.gov/patients/rare-diseases-fda (last updated Dec. 13, 2022).
Congress first passed the Prescription Drug User Fee Act (PDUFA) in 1992, Pub. L. No. 102-571, which has since
been reauthorized several times. PDUFA gives FDA authority to collect fees from the pharmaceutical industry and use
the revenue to support “the process for the review of human drug applications.” For more information about the
Prescription Drug User Fee Act, see CRS Report R44750, FDA Human Medical Product User Fee Programs, by Agata
Bodie and Amanda K. Sarata (2021); see also FOOD AND DRUG ADMIN., Financial Report to Congress: Prescription
Drug User Fee Act of 1992, FY 2022, at 7, https://www.fda.gov/media/165427/download.
15 For purposes of this report, the term “approval” will be used to apply to both drugs and biologics.
16 21 U.S.C. §§ 360cc(a); 21 C.F.R. § 316.31(a); see also Rare Diseases at FDA, supra note 14.
17 See CRS Report RS20971, Orphan Drug Act: Background and Proposed Legislation in the 107th Congress, by M.
Angeles Villarreal (2001) (available to congressional clients upon request).
18 The FDA defines a drug manufacturer as a person or agency that manufactures a drug or biologic that is “subject to
investigation and approval.” 21 C.F.R. § 316.3(b)(8).
19 The FDA defines a sponsor as “the entity that assumes responsibility for a clinical or nonclinical investigation of a
drug,” and may be a person, corporation, government agency, or other entity. 21 C.F.R. § 316.3(b)(15).
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in drug development.20 A manufacturer or sponsor may apply for an orphan-drug designation at
any time during the drug development process, so long as the request is submitted before
submitting the application for FDA approval of the drug.21 FDA regulations spell out the specific
requirements for the content and format of orphan-drug designation requests,22 discuss how the
FDA verifies orphan-drug status23 and alerts drug sponsors of deficiencies,24 and stipulate the
conditions under which the FDA may refuse to grant25 or revoke a designation request.26
Manufacturers and sponsors may seek an orphan-drug designation if the drug is currently being
investigated or will be investigated for a rare disease or condition and the approval or licensing of
the drug would be for the “use for such disease or condition.”27 For purposes of orphan-drug
designation, a “rare disease or condition” is one that either (1) affects fewer than 200,000 people
in the United States; or (2) affects more than 200,000 people in the United States but for which a
manufacturer does not have a “reasonable expectation” of recovering its development costs from
sales.28 A manufacturer may seek orphan-drug designation for either a previously unapproved
drug, or for a new use of a drug that is already FDA-approved.29 Additionally, if the FDA has
already designated and approved an orphan drug for a particular rare disease or condition, a
sponsor may receive a subsequent designation for the same drug for the same disease or condition
if it can present a “plausible hypothesis” that the second drug is clinically superior to the
original.30
FDA’s Orphan-Drug Designation Process
After a manufacturer files a designation request, the FDA determines whether the drug meets the
definition of an orphan drug.31 To enable the FDA to make this determination, sponsors must
submit documentation showing either that (1) the prevalence of the rare disease or condition is
fewer than 200,000 people, or (2) the sponsor does not reasonably anticipate recouping the costs
of research and development of the drug through domestic sales.32 For the first path, the sponsor
must provide evidence of the estimated disease prevalence, and the FDA may request additional
documentation, including the estimated prevalence of any other disease or condition for which the
drug is being developed or was already approved.33 The sponsor must also estimate the number of
people who would receive the drug on a yearly basis.34
For the second path—demonstrating that developing the drug would not be cost effective—the
sponsor must submit data on all costs incurred and expected to be incurred in the research and

20 Shashank Upadhye, GENERIC PHARMACEUTICAL PATENT AND FDA LAW, § 23:15 (2022 ed.).
21 21 U.S.C. § 360bb(a)(1); 21 C.F.R. § 316.23(a)–(b).
22 21 C.F.R. § 316.20.
23 Id. § 316.21.
24 Id. § 316.24.
25 Id. § 316.25.
26 Id. § 316.29.
27 21 U.S.C. § 360bb(a)(1)(A)–(B).
28 Id. § 360bb(a)(2)(A)–(B).
29 21 C.F.R. § 316.20(a).
30 Id. § 316.20(a).
31 Id. § 316.21(a).
32 21 U.S.C. § 360bb(a)(2).
33 21 C.F.R. § 316.21(b)(1)–(2).
34 Id. § 316.21(b)(3).
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development of the drug, as well as a justification of the reasonableness of the cost data.35 If a
drug has already been approved and marketed for a different indication, or if the drug is being
investigated for another indication, the sponsor must apportion the development cost data for each
indication.36 Sponsors are also required to estimate and justify the expected costs of marketing
and production and the expected revenues from sales of the drug through seven years after
marketing the drug.37 Sponsors must also submit information about any other countries where the
drug has already been approved and an independent accountant’s certification of the request’s
data estimates and justifications.38 (There are additional legal requirements for drugs developed
either wholly or partially outside the United States.39)
If the FDA determines that a designation request is inaccurate or incomplete, it sends the sponsor
a deficiency letter; the sponsor then has one year to either respond to the letter or withdraw the
designation request.40 The FDA denies a designation request if there is insufficient evidence that
the drug will be used to treat fewer than 200,000 people or if a sponsor fails to demonstrate that
there is no reasonable expectation that its costs could be recouped through domestic sales.41 The
FDA may also deny a designation request if the sponsor does not demonstrate a “medically
plausible” theory showing that the drug will be effective in diagnosing, treating, or preventing a
rare disease or condition.42 Additionally, if the drug is the same as one that has already been
approved and the sponsor has not demonstrated a “medically plausible hypothesis” of clinical
superiority, or if the designation contains a false statement of material fact, the FDA may refuse to
grant the designation.43 The FDA grants a designation request when none of the reasons for
refusing it apply.44 The FDA updates a publicly available list of orphan designations every
month.45
FDA may revoke an orphan-drug designation after it is granted if the agency determines that the
designation request contained “an untrue statement of material fact,” omitted required material
information, or was not actually eligible for designation at the time of the request.46
Post-Designation Manufacturer Requirements
Certain requirements apply to manufacturers that receive orphan drug designation. During
preclinical investigations before the drug is approved, the manufacturer must notify the FDA if it
decides to discontinue its pursuit of FDA approval.47 The FDA also requires manufacturers with
an orphan drug designation to submit yearly progress reports to the FDA detailing the progress of
drug development, including any clinical or preclinical studies, a yearly plan for investigation and
any anticipated hurdles, and any changes that could affect the status of the product, including

35 Id. § 316.21(c)(1).
36 Id. § 316.21(c)(3)–(4).
37 Id. § 316.21(c)(5) – (6).
38 Id. § 316.21(c)(7)–(8).
39 Id. § 316.21(c)(2).
40 Id. § 316.24(a).
41 Id. § 316.25(a)(1).
42 Id. § 316.25(a)(2).
43 Id. § 316.25(a)(3), (b).
44 Id. § 316.24(b).
45 FOOD & DRUG. ADMIN., Search Orphan Drug Designations and Approvals, U.S. FOOD & DRUG ADMIN.,
https://www.accessdata.fda.gov/scripts/opdlisting/oopd/ (last visited July 14, 2023).
46 21 C.F.R. § 316.29.
47 Id. § 360bb(b)(2).
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differences in market indications and designation indications.48 If an orphan drug becomes FDA-
approved, a manufacturer must notify the FDA if it chooses to halt production of the drug.49
Orphan-Drug Exclusivity
Before the sponsor of a designated orphan drug may market the drug, the sponsor must seek FDA
approval by applying under Section 505 of the Federal Food, Drug, and Cosmetic Act (FDCA)50
for drugs or Section 351 of the Public Health Service Act (PHSA)51 (42 U.S.C. § 262) for
biologics.52 If the FDA approves a drug designated as an orphan drug, the drug sponsor is entitled
to market exclusivity.53 The ODA’s exclusivity provision prohibits the FDA from approving
another drug or licensing another biologic “for the same drug for the same disease or condition ...
until the expiration of seven years from the date” of the original approval (or licensure, in the case
of biologics).54 This seven-year period is known as the “orphan-drug exclusivity” period.
In its implementing regulations, the FDA has interpreted the seven-year exclusivity period in a
way that may limit its applicability. The regulations state that exclusivity “protects only the
approved indication or use of a designated drug.”55 Accordingly, if an orphan drug is approved for
certain indications or uses for the rare disease or conditions, the regulations allow the FDA to
“later approve the drug for additional indication(s) or use(s) within the rare disease or condition
not protected by the exclusive approval.”56
In other words, the FDA treats orphan-drug exclusivity as specific to the designated use or
indications for the drug rather than extending to any and all uses or indications for the rare
disease or condition.57 Thus, the FDA could designate an orphan drug for a particular indication,
and then later designate the same drug for the same disease or condition but with a different
indication.58 Given the high cost of developing orphan drugs and the value of orphan-drug

48 21 C.F.R. § 316.30.
49 21 U.S.C. § 360bb(b)(1).
50 21 U.S.C. § 355.
51 42 U.S.C. § 262.
52 For more information about the FDA drug approval process for new drugs and generic drugs, see CRS Report
R41983, How FDA Approves Drugs and Regulates Their Safety and Effectiveness, by Agata Bodie and Susan Thaul
(2018).
53 21 U.S.C. § 360cc.
54 Id. § 360cc(a).
55 21 C.F.R. § 316.31(b).
56 Id. For example, in the case of Catalyst Pharmaceuticals Inc. v. Becerra, the FDA approved the same drug
(amifampridine) which is used to treat the same disease (Lamberton-Eaton Myasthenic Syndrome), but which was
indicated for use in different populations (i.e., adults vs. children). 14 F.4th 1299, 1304 (2021) (emphasis added).
57 The FDA’s regulations regarding labeling requirements for drugs distinguish a product’s intended use and its
indications for use. A product’s “intended uses . . . refer to the objective intent of the persons legally responsible for the
labeling of an article . . . . The intent may be shown by such persons’ expressions, the design or composition of the
article, or by the circumstances surrounding the distribution of the article.” 21 C.F.R. § 201.128. A product’s
“indications for use” are the conditions under which the product is used, including the population(s) for whom the drug
is developed. U.S. Food & Drug Admin., Indications and Usage Section of Labeling for Human Prescription Drug and
biological Products – Content and Format: Guidance for Industry (July 2018),
https://www.fda.gov/files/drugs/published/Indications-and-Usage-Section-of-Labeling-for-Human-Prescription-Drug-
and-Biological-Products-%E2%80%94-Content-and-Format-Guidance-for-Industry.pdf. In accordance with federal
regulations, “all indications listed … must be supported by substantial evidence of effectiveness based on adequate and
well controlled studies.” 21 C.F.R §201.57(v)(2)(iv).
58 Id. § 316.31(b).
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exclusivity, the FDA’s interpretation has generated controversy and litigation. As discussed below,
a manufacturer recently challenged this interpretation, and questions remain about its validity.59
The statute provides two exceptions to the seven-year exclusivity period for orphan drugs, which
allow the FDA to approve a competing orphan drug during the seven-year exclusivity period.60
First, the FDA may approve another marketing application for “the same drug for the same
disease or condition” if the FDA finds that the manufacturer of the original orphan drug cannot
provide sufficient quantities of the drug to meet the demand for persons with the disease or
condition.61 Second, the FDA may override orphan-drug exclusivity with written consent of the
holder of the approval or licensure.62 The regulations provide two additional situations when the
FDA may approve a sponsor’s marketing application despite another manufacturer having
received orphan-drug exclusivity: (1) if the FDA revokes the orphan-drug designation or the
drug’s approval; and (2) when the orphan drug’s marketing application is withdrawn for any
reason.63
Following uncertainty about the scope of the exclusivity for a subsequent sponsor of the same
orphan drug for the same disease or condition, Congress created an additional requirement for
orphan-designated drugs that enter the market when the same drug has already been approved for
the same disease or condition.64 In the FDA Reauthorization Act of 2017, Congress amended the
exclusivity requirements of the ODA to create a “[c]ondition of clinical superiority” for sponsors
that request orphan-drug exclusivity for a drug that the FDA has already approved to treat the
same rare disease or condition.65 The amendments clarify that a sponsor may obtain market
exclusivity for an already approved orphan drug, but to do so, it must demonstrate that its drug is
“clinically superior” to the previously approved drug.66
The statute defines a drug as being clinically superior when it “provides a significant therapeutic
advantage over and above an already approved drug in terms of greater efficacy, greater safety, or

59 See infra at 7, “Interpreting “Same Disease or Condition”: Catalyst Pharmaceuticals, Inc. v. Becerra.”
60 21 U.S.C. § 360aa(b)(1)–(2).
61 42 U.S.C. § 300aa(b)(1).
62 Id. § 300aa(b)(2).
63 21 C.F.R. 316.31(a)(1)–(4).
64 The question of whether subsequent sponsors of the same orphan drug for the same disease or condition as an already
marketed orphan drug are still entitled to receive orphan drug exclusivity for their drug, if approved, was first addressed
in Depomed, Inc. v. U.S. Dept of Health & Human Servs., 66 F. Supp. 3d. 217 (D.D.C. 2014). In Depomed, the U.S.
District Court for the District of Columbia found that the scope of the seven-year orphan drug exclusivity was not
limited to only the first manufacturer of an orphan drug for the treatment of a certain disease or condition. Id. at 230.
The court observed that
although it is convenient to characterize orphan-drug marketing exclusivity as something in the nature of a
benefit that the FDA confers or withholds . . . the text of section 360cc makes clear that the incentive Congress
intended to create in the orphan drug context is not a thing to be ‘conveyed’ to drug manufacturers at all; rather,
it is a restriction on the FDA’s ability to approve the marketing of other such drugs for the same rare disease
or condition . . . when a drug that has been designated as an orphan drug is approved for marketing.
Id. After Depomed was decided, the FDA issued a notice in the Federal Register “to clarify its policy regarding certain
aspects of orphan-drug exclusivity.” 79 Fed. Reg. 76,888 (Dec. 23, 2014). The FDA noted the “uncertainty” created by
Depomed and characterized its holding as “limited.” Id. The agency stated that it “interprets section 527 of the [FDCA]
and its regulations . . . to require the sponsor of a designated drug that is the ‘same’ as a previously approved drug to
demonstrate that its drug is ‘clinically superior’ to that drug upon approval in order for the subsequently approved drug
to be eligible for orphan-drug exclusivity.” Id. The agency also noted its intention to “continue to apply its existing
regulations in part 316 to orphan-drug exclusivity matters.” Id.
65 FDA Reauthorization Act of 2017, Pub. L. No. 115-52, § 607, 131 Stat. 1051 (amending 42 U.S.C. § 360cc); 21
U.S.C. § 360cc(c).
66 Id. § 360cc(c)(1).
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by providing a major contribution to patient care.”67 To aid in the process of demonstrating
clinical superiority, the FDA is required to notify sponsors of the basis for the orphan-drug
designation, including “any plausible hypothesis” on which the FDA relies to find the drug
clinically superior.68 The FDA must also publish a summary of its clinical superiority findings
after granting an application for exclusive approval or licensure of an orphan drug on the basis of
clinical superiority.69
Interpreting “Same Disease or Condition”: Catalyst
Pharmaceuticals, Inc. v. Becerra
Since the ODA was enacted, courts have heard a number of cases addressing the scope of orphan-
drug exclusivity.70 A recent case, Catalyst Pharmaceuticals, Inc. v. Becerra, interpreted the
meaning of the words “same disease or condition” with respect to the orphan-drug exclusivity.71
Catalyst arose after two different orphan-drug manufacturers received FDA approval to market
amifampridine, which is used to treat Lambert-Eaton Myasthenic Syndrome (LEMS).72 The FDA
designated Catalyst’s drug Firdapse (a brand name for amifampridine) as an orphan drug for the
treatment of LEMS in 2005; the FDA approved Firdapse for the treatment of LEMS in adults on
November 28, 2018.73
A competing manufacturer, Jacubus, received an orphan-drug designation for Ruzurgi (the brand
name for its version of amifampridine) in 1990.74 The FDA approved Ruzurgi for the treatment of
LEMS in pediatric patients on May 6, 2019.75 Catalyst challenged the FDA’s approval of
Ruzurgi, alleging that the approval of Ruzurgi violated Catalyst’s orphan-drug exclusivity for
Firdapse.76 The central issue in the case was whether the FDA could interpret the statutory phrase
“same drug for the same disease or condition” so as to allow it to approve the same drug for the
same disease but for a different indication (e.g., treating adults versus treating children).77

67 42 U.S.C. § 360cc(c)(2).
68 21 U.S.C. § 360cc(e)(1).
69 Id. § 360cc(e)(2).
70 See, e.g., Sigma-Tau Pharms., Inc. v. Schwetz, 288 F.3d 141 (11th Cir. 2002); Spectrum Pharms., Inc., v. Burwell,
824 F.3d 1062 (D.C. Cir. 2016); Eagle Pharms., Inc. v. Azar, 952 F.3d 323 (11th Cir. 2020).
71 Catalyst Pharms., Inc. v. U.S. Food and Drug Admin., 2020 WL 5792595 (S.D. Fla. Sept. 29, 2020), rev’d, Catalyst
Pharms., Inc., v. Becerra, 14 F.4th 1299 (11th Cir. 2021), cert dismissed sub nom. Jacobus Pharm. Co. v. Catalyst
Pharms., 142 S. Ct. 2904 (2022); see also 42 U.S.C. § 360cc(a).
72 Catalyst Pharms., Inc. v. Azar, No. 19-cv-22425, 2020 WL 5514187, at *1 (S.D. Fla. July 30, 2020), report and
recommendation adopted sub nom. Catalyst Pharms. v. U.S. Food & Drug Admin., No. 19-cv-22425, 2020 WL
5792595 (S.D. Fla. Sept. 29, 2020), rev’d and remanded sub nom. Catalyst Pharms. v. Becerra, 14 F.4th 1299 (11th
Cir. 2021).
73 Id. at *2.
74 Id. at *3.
75 Catalyst Pharms., 14 F.4th at 1305.
76 2020 WL 5514187, at *3.
77 2020 WL 5792595, at *5.
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District Court Decision
On September 29, 2020, the U.S. District Court for the Southern District of Florida held that FDA
had not violated the ODA or the Administrative Procedure Act (APA) in approving Ruzurgi.78
Catalyst had argued that the FDA’s approval of Ruzurgi infringed upon Catalyst’s regulatory
exclusivity for Firdapse.79 Catalyst argued that the FDA’s approval of Ruzurgi violated the plain
language of the ODA, which prohibits the FDA from approving “the same drug for the same
disease or condition” during Catalyst’s exclusivity period.80 In response, the FDA argued that the
ODA’s language was ambiguous and that therefore, under what is known as the Chevron doctrine,
the court should defer to its interpretation of the ODA.81 That interpretation, as discussed earlier,
is embodied in the FDA regulation interpreting the phrase “same disease or condition” to refer to
the drug’s use as stated in the NDA, rather than the orphan-drug designation.82
When Congress gives an agency like the FDA regulatory authority, that authority is constrained
by the statutes that authorize the FDA to carry out the delegated tasks.83 The Chevron doctrine is a
two-step framework of review used by federal courts that generally applies when Congress gives
an agency the authority to make rules that have the force of law.84 If a court determines that
Chevron applies, at step one, the court will use traditional tools of statutory construction to
determine whether Congress directly addressed the precise issue before the court.85 If the statute
is clear on its face, then the Court must implement Congress’s stated intent.86 If the court
concludes that the statute is silent or ambiguous, it will proceed to Chevron’s second step.87
Under step two, a court must defer to an agency’s reasonable interpretation of the statute.88
Using a Chevron analysis, the district court first found the phrase “same disease or condition”
ambiguous, stating “it is not clear whether the language ‘disease or condition’ in section 360cc
refers to the approved disease or condition for which the sponsor applies in its [New Drug
Application], or the disease or condition that was initially designated under section 360bb.”89
In Chevron’s second step, the court found that the FDA’s interpretation of the ambiguous statutory
provision was reasonable, pointing to both the text of the statute as well as the greater statutory

78 2020 WL 5792595. In its decision, the district court adopted the recommendations of an earlier magistrate judge’s
review of the parties’ cross motions for summary judgment. See 2020 WL 5514187 (S.D. Fla. July 30, 2020). The
district court refers to the magistrate judge’s findings at various places throughout its opinion, and thus this report cites
to both the magistrate judge’s recommendation and the district court’s opinion.
79 2020 WL 5514187 at *3. A second legal issue presented to the district court was whether Ruzurgi’s label was false or
misleading. See 2020 WL 5792595, at *5. This report focuses only on the first issue regarding the orphan-drug
exclusivity.
80 2020 WL 5514187 at *4; see also 21 U.S.C. § 360cc(a).
81 2020 WL 5514187 at *4.
82 2020 WL 5514187 at *5. The FDA’s reading narrows the scope of the orphan drug’s market exclusivity because the
NDA may be limited to specific to subgroups or subpopulations whereas an orphan-drug designation is generally
broader. Id.
83 See 5 U.S.C. § 706(2)(A).
84 Chevron U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984). For more information about the Chevron
doctrine, see CRS Report R44954, Chevron Deference: A Primer, by Benjamin M. Barczewski (2023). For more
information about how Chevron has been applied specifically by federal appeals courts, see CRS Legal Sidebar
LSB10976, Chevron Deference in the Courts of Appeals, by Benjamin M. Barczewski (2023).
85 Id. at 842.
86 Id. at 842-43.
87 Id. at 843.
88 Id.
89 2020 WL 5792595, at *6.
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scheme.90 The court reasoned that because Section 360cc referred back to Section 355 of the
FDCA (which concerns drug approvals), more than one interpretation was reasonable.91 The court
observed that “Congress could have, but did not, omit reference to section 355, or make clear that
the term ‘same disease or condition’ refers only to the disease or condition as designated in
section 360bb.”92 In other words, because the relevant provision of the statute refers to the NDA
process in Section 355, and an NDA is specific to certain uses or indications for a drug, it was
reasonable for the FDA to approve two orphan-drug applications for the same drug when those
two drugs were approved for different indications. The court conceded that Catalyst’s
interpretation of the statute “was not necessarily wrong, but it is not the only reasonable way to
interpret the plain language of the statute.”93
Eleventh Circuit Reversal
Catalyst appealed the district court’s ruling to the U.S. Court of Appeals for the Eleventh Circuit
(the 11th Circuit).94 On September 30, 2021, the 11th Circuit reversed the district court, holding
that the ODA’s use of “same disease or condition” was not ambiguous, and thus that the FDA
violated Catalyst’s seven-year orphan-drug exclusivity when it approved Ruzurgi.95
The 11th Circuit began with the statutory text. After reviewing various definitions of the term
“same,” the court concluded that “[t]he ordinary and plain meaning of ‘same disease or condition’
read in the context of [the statute] yields only one result—the term unambiguously refers to the
‘rare disease or condition’ designated under § 360bb.”96 The 11th Circuit disagreed with the
district court’s conclusion that the statute’s earlier reference to Section 355 (the NDA provisions)
made the phrase “same disease or condition” ambiguous, finding it unsupported by the statutory
text.97 The court observed that Section 355 contains “more limited language” than the “broader”
language used in Section 360cc, and thus inferred that Congress must have meant to exclude
these more specific terms.98 The court stated that “if Congress wanted to make the ‘use or
indication’ inquiry relevant to a holder’s market exclusivity for an orphan drug, it could have
done so by including such language in § 360cc(a). The fact that Congress did not include that
language counsels against an interpretation that finds an ambiguity in § 360cc(a)’s language.”99

90 2020 WL 5792595, at *8.
91 Id. at *8. Section 355 concerns the submission and approval process for NDAs. See 21 U.S.C. § 355.
92 2020 WL 5792595, at *8.
93 Id. at *9 (emphasis in original). As for Catalyst’s argument that Ruzurgi’s labeling was false or misleading for
implying an unapproved indication for the treatment of LEMS in children, the court was not persuaded. Id. The FDA-
approved label for Ruzurgi stated that the drug was indicated for the treatment of LEMS “in patients 6 to less than 17
years of age,” but drug trials were only performed in adults. Id. The court agreed with the magistrate’s recommendation
to defer to the FDA’s review of the drug label; the magistrate pointed to several places in the record where the “FDA
applied its judgment and expertise to the data in the new drug application and made determinations about what to
include and what to exclude.” Id. at *10; 2020 WL 5514187 at *8.
94 Notice of Appeal, Catalyst Pharms., Inc. v. Becerra, No. 20-13922 (11th Cir. Oct. 19, 2020), ECF No. 1.
95 Catalyst Pharms., Inc. v. Becerra, 14 F.4th 1299 (11th Cir. 2021), cert dismissed sub nom. Jacobus Pharm Co. v.
Catalyst Pharms., 142 S. Ct. 2904 (2022).
96 Id. at 1307.
97 Id. at 1308.
98 Id. at 1309. The court also observed that, in addition to § 355’s NDA provision, § 360cc(a) also referenced § 262 of
the Public Health Service Act, which concerns the licensing of biological products. Id. These references were
significant, the court said, only insofar as they refer to “what must occur to trigger market exclusivity . . . and what the
FDA is prohibited from doing once both the designation and approval conditions are met.” Id. In other words, the 11th
Circuit did not find the ODA’s references to either § 355 or 42 U.S.C. § 262 made the ODA provision ambiguous. Id.
99 14 F.4th at 1309.
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The court also pointed to other cases interpreting the ODA’s market exclusivity provision with
respect to a drug’s use or indication. The court found that reading these cases as supportive of the
FDA’s position was to take their holdings out of context.100 One such case was Sigma-Tau
Pharmaceuticals, Inc. v. Schwetz, in which the Fourth Circuit interpreted the ODA market
exclusivity provisions in the context of generic drug production.101 In Sigma-Tau, a manufacturer
received a seven-year orphan drug exclusivity for a drug known as levocarnitine, which was used
to treat carnitine deficiency in patients with certain metabolic disorders.102 Shortly after the
exclusivity period ended, the manufacturer obtained another orphan-drug exclusivity for the same
drug to treat carnitine deficiency in patients with end-stage renal disease (ESRD).103 During the
second exclusivity period for levocarnitine, the FDA approved a generic form of the drug for
patients with metabolic disorders, and Sigma-Tau sued, arguing that the FDA’s approval of the
generic violated its market exclusivity because the generic could be prescribed off-label to treat
carnitine deficiency for ESRD patients, the condition for which it still held exclusivity.104 The
Fourth Circuit disagreed, finding the plain language of the ODA105 unambiguous; the court stated
that “Congress made clear its intention that § 360cc(a) was to be disease-specific, not drug-
specific. In other words, the statute as written protects uses, not drugs for any and all uses.”106
Accordingly, FDA could approve a generic version of the same drug for a different disease than
the one entitled to exclusivity.
In Catalyst, the 11th Circuit distinguished Sigma Tau on the basis that it concerned orphan-drug
exclusivity for two different diseases. It declined to extend the Fourth Circuit’s ruling to a
situation in which the same drug was being used to treat the same condition but with two different
indications.107 Because the court found that the ODA’s phrase “same disease or condition” was
unambiguous, it concluded that the FDA’s interpretation was not entitled to Chevron deference.108
The court held that “the FDA’s interpretation of [the ODA] is contrary to the clear statutory
language enacted by Congress.”109 The court set aside the FDA’s approval of Ruzurgi and

100 Id. 1311.
101 Id. at 1311; Sigma-Tau Pharms., Inc. v. Schwetz, 288 F.3d 141 (4th Cir. 2002). The 11th Circuit also distinguished
the D.C. Circuit’s ruling in Spectrum Pharms., Inc. v. Burwell, 824 F.3d 1062 (D.C. Cir. 2016), which addressed off-
label use in the context of the exclusivity provisions in § 360cc(a). In that case, the D.C. Circuit affirmed a grant of
summary judgment against Spectrum, finding that a competing manufacturer could market a generic drug that could be
used off-label to treat a different condition for which Spectrum held market exclusivity. 824 F.3d at 1064. Citing the
Fourth Circuit’s ruling in Sigma-Tau, the D.C. Circuit agreed that Congress’s intention was to make § 360cc “disease
specific, not drug specific,” noting that “the rest of the statutory language [in § 360cc] focuses on protecting approved
indications, not intended off-label uses.” Id. at 1067. Catalyst declined to extend this holding to situations in which the
exclusivity covered different indications for the same disease or condition. 14 F.4th at 1311.
102 288 F.3d at 143.
103 Id.
104 Id. at 143.
105 It should be noted that Sigma-Tau was decided in 2002, prior to the 2017 ODA amendments, in which Congress
changed the prohibition language in § 360cc(a) from “such drug for such disease or condition,” to the language used
now (i.e., “same drug for the same disease or condition”). See FDA Reauthorization Act of 2017, Pub. L. No. 115-52,
§ 607, 131 Stat. 1051, § 607 (amending 42 U.S.C. § 360cc).
106 288 F.3d at 145.
107 14 F.4th at 1311. In other words, Catalyst concerns orphan-drug exclusivity for a drug used to treat the same disease
but with two different indications, but Sigma-Tau addressed orphan-drug exclusivity for a different disease.
108 Id. at 1312.
109 Id.
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remanded the case to the district court, which granted Catalyst’s motion for summary
judgment.110 The FDA’s motion for rehearing en banc was denied.111
FDA Non-Acquiescence in the Context of the ODA
Non-Acquiescence to Catalyst
Within the field of administrative law, the practice of agency non-acquiescence is defined as
“[t]he selective refusal of administrative agencies to conduct their internal proceedings
consistently with adverse rulings of the courts of appeals.”112 Federal agencies, including the
FDA, occasionally engage in this practice, which has “persisted without either legitimation or
interdiction by Congress or the Supreme Court” since at least the 1940s.113 While some courts and
scholars have questioned the constitutionality of the practice of agency non-acquiescence, others
have insisted that it remains an essential component of administrative law.114 As discussed in this
report, within the context of orphan-drug exclusivities, the FDA has non-acquiesced to federal
court rulings on a few occasions.115
In the months after Catalyst was decided, stakeholders debated its impact on orphan drug
development. Some went so far as to claim that the decision “undoubtedly increases the value of
orphan-drug exclusivity to include the entire disease or condition,” while others were less certain,
saying only that the decision created “uncertainty,” and that orphan-drug sponsors would need to
monitor the FDA’s reaction to the ruling “to evaluate the potential impact for their rare disease
products.”116 On January 24, 2023, the FDA issued a Federal Register Notice (FRN) announcing
that, although it had complied with the 11th Circuit’s order in Catalyst and rescinded Jacobus’s
approval for Ruzurgi, the “FDA intends to continue to apply its regulations tying the scope of
orphan-drug exclusivity to the uses or indications for which a drug is approved.”117
To explain its reasoning, the FDA referenced its regulatory definition of “orphan-drug exclusive
approval,” which states that it will not extend exclusivity to a subsequent sponsor that requests

110 Id. at 1313. Order Upon Remand, Catalyst Pharms, Inc. v. U.S. Food and Drug Admin, No. 19-22425 (S.D.Fl., Jan.
31, 2022). The Eleventh Circuit’s order did not overturn the FDA regulation at 21 C.F.R. § 316.31(b).
111 Order Denying Petition for Rehearing en Banc, Catalyst Pharms., Inc. v. Becerra, No. 20-13922 (11th Cir., Jan. 7,
2022).
112 Samuel Estreicher & Richard L. Revesz, Nonacquiescence by Federal Administrative Agencies, 88 YALE LAW J.
679-772 (Feb., 1989).
113 Id. at 681.
114 Id. at 718 (citing Lopez v. Heckler, 713 F. 2d 1432, 1431 (9th Cir. 1983); Allegheny Gen. Hosp. v. NLRB, 608 F.2d
965, 967 (3rd Cir. 1979); Stieberger v. Heckler, 615 F. Supp. 1315, 1365-66 (S.D. N.Y. 1985) (vacated by Stieberger v.
Bowen, 801 F.2d 29 (2nd Cir. 1986)).
115 See, e.g., Clarification of Orphan-Drug Exclusivity Following Catalyst Pharms., Inc. v. Becerra, 88 Fed. Reg. 4068
(Jan. 24, 2023).
116 Sara W. Koblitz, Catalyst Pharms, Inc. v. Becerra: Why It Made the List, FOOD AND DRUG LAW INST.,
https://www.fdli.org/2022/06/catalyst-pharmaceuticals-inc-v-becerra/ (last visited July 14, 2023); George A. O’Brien,
Catalyst Pharms v. Becerra: Did the Eleventh Circuit Broaden the Scope of Orphan Exclusivity, MAYER BROWN (Aug.
18, 2022), https://www.mayerbrown.com/en/perspectives-events/publications/2022/08/catalyst-pharms-v-becerra-did-
the-eleventh-circuit-broaden-the-scope-of-orphan-exclusivity.
117 Clarification of Orphan-Drug Exclusivity Following Catalyst Pharms., Inc. v. Becerra, 88 Fed. Reg. 4068 (Jan. 24,
2023). The FDA did not specifically state whether it intends to continue applying its interpretation of 21 C.F.R.
§ 316.31(b) in the 11th Circuit.
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approval for the same drug for the same use or indication.118 The FDA also pointed to its
regulations on the scope of orphan-drug exclusivity, stating that “orphan-drug exclusive approval
protects only the approved indication or use of a designated drug.”119
The FDA provided several reasons for continuing to tie exclusivity to an orphan drug’s use or
indication. First, contrary to the 11th Circuit’s holding in Catalyst, the FDA reasserted its position
that the statutory text in Section 360cc(a) is ambiguous.120 Second, the FDA asserted that its
interpretation of the statute “best advances the [ODA]’s purposes, appropriately balancing the
need to incentivize the development of drugs for rare diseases . . . with the need to provide patient
access to orphan drugs.”121 The FDA pointed out that limiting the scope of exclusivity to the
drug’s use or indication leaves room for other sponsors to continue to innovate. In addition, other
sponsors may be incentivized by the continued availability of exclusivity to pursue other
indications for the same drug and same disease or condition that are not covered by the approved
drug’s exclusivity.122 In this way, the regulations “incentivize sponsors to continue to develop a
drug for use in all persons affected by a rare disease or condition.”123 For these reasons, the
agency has decided to “continue to apply its longstanding regulations” regarding the scope of
orphan-drug exclusivity.124
FDA Non-Acquiescence Regarding Clinical Superiority and Congressional
Response
The FDA’s January 2023 FRN is not the first time that the agency has chosen not to adopt a
court’s reasoning for future approvals regarding the scope of exclusivity in the ODA. In the 2014
case Depomed, Inc. v. U.S. Department of Health & Human Services, the D.C. District Court
ruled against the FDA’s requirement that a subsequent sponsor of the same orphan drug for the
same disease or condition demonstrate clinical superiority to receive marketing exclusivity. The
court concluded that the plain language of the ODA required that any sponsor of a designated
orphan drug receive seven years of exclusivity following approval, regardless of whether the
same drug had already been approved for the same disease or condition.125 The FDA initially
appealed the ruling to the D.C. Circuit but later withdrew its appeal, instead opting to publish an
FRN stating its non-acquiescence to the decision.126 The FRN summarized the FDA’s policy of
requiring subsequent manufacturers of the same orphan drug for the same disease or condition to

118 Id. at 4068 (emphasis added) (“[N]o approval will be given to a subsequent sponsor of the same drug for the same
use or indication for 7 years, except as otherwise provided by law or in this part. A designated drug will receive
orphan-drug exclusive approval only if the same drug has not already been approved for the same use or indication.”
(quoting 21 C.F.R. § 316.3(b)(12)).
119 88 Fed. Reg. at 4086 (emphasis added) (citing 21 C.F.R. § 316.31(b)). The regulations go on to state that if “such
approval is limited to only particular indication(s) or uses(s) [sic] within the rare disease or condition for which the
drug was designated, FDA may later approve the drug for additional indication(s) or uses(s) within the rare disease or
condition not protected by the exclusive approval.” 21 C.F.R. § 316.31(b).
120 88 Fed. Reg. at 4087.
121 Id.
122 Id.
123 Id.
124 Id. Were a similar issue to come up again in the 11th Circuit, a district court would be bound to follow the 11th
Circuit’s ruling in Catalyst. If a future case were to be appealed to the 11th Circuit, the court would be bound to apply
Catalyst’s reasoning unless the full 11th Circuit revisits the decision in a rehearing en banc.
125 Depomed, Inc. v. U.S. Dept. of Health & Human Servs., 66 F. Supp. 3d 217, 220 (D.D.C. 2014). At the time that
Depomed was decided, Congress had not yet added § 360cc(c) to the ODA, which codified the FDA’s clinical
superiority requirements. Congress added this section in 2017 via the FDA Reauthorization Act. See supra note 53.
126 Policy on Orphan-Drug Exclusivity; Clarification, 79 Fed. Reg. 76,888 (Dec. 23, 2014).
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demonstrate clinical superiority in order for the drug to receive seven years of market
exclusivity.127 Similar to the aftermath of Catalyst, the FDA stated its intention to “continue to
apply its existing regulations . . . to orphan-drug exclusivity matters,” and that it interpreted the
ODA “to require the sponsor of a designated drug that is the same as a previously approved drug
to demonstrate that its drug is clinically superior to that drug upon approval” to receive market
exclusivity.128
Less than four years later, Eagle Pharmaceuticals, Inc. v. Azar presented the same legal question
of whether the ODA permitted the FDA to require subsequent manufacturers of the same orphan
drug to demonstrate clinical superiority prior to receiving exclusivity.129 While Eagle was being
litigated, Congress passed the FDA Reauthorization Act of 2017, amending Section 360cc of the
ODA to codify the FDA’s clinical superiority requirement for market exclusivity, thus
superseding Depomed.130 Because Congress did not retroactively apply these changes to the
ODA, however, the district court applied the earlier text of the ODA to hold that the FDA lacked
the authority to apply the clinical superiority requirements when granting orphan-drug approvals
prior to the statutory change.131 The D.C. Circuit affirmed the district court’s decision on appeal,
unpersuaded by the FDA’s arguments that the absence of a clinical superiority requirement would
create “serial exclusivity.”132
Considerations for Congress
A 2020 HHS drug pricing report to Congress showed that drug spending is increasing across
federal health care programs, and Congress is consistently concerned about rising prescription
drug costs.133 The ODA attempts to balance the competing needs and interests of pharmaceutical
companies and patients with rare diseases by incentivizing the development and marketing of

127 Id.; see also 78 Fed. Reg. 35,117 (final rule explaining FDA’s policy of clinical superiority for orphan-drug
exclusivity and amending existing regulation in 21 C.F.R. part 316).
128 79 Fed. Reg. at 76,888 (internal punctuation omitted).
129 Eagle Pharm., Inc. v. Azar, No. 16-790, 2018 WL 3838265 (D.D.C. June 8, 2018).
130 FDA Reauthorization Act of 2017, Pub. L. No. 115-52, § 607, 131 Stat. 1051, § 607 (amending 42 U.S.C. § 360cc).
131 2018 WL 3838265, at *6 (“The Court thus agrees with the conclusion in Depomed that this language [in the pre-
amendment ODA] leaves no room for the FDA’s imposition of its clinical-superiority requirement after an orphan drug
has been designated and approved.”)
132 Eagle Pharms., Inc. v. Azar, 952 F.3d 323 (D.C. Cir. 2020). The majority found that both the text and structure of
the ODA failed to support the FDA’s argument market exclusivity was not automatic and that the statute left enough
room for FDA’s clinical superiority requirement. Id. at 331. The majority was similarly unpersuaded by the FDA’s
argument that the statute’s structure and purpose supported such a requirement, finding that although “Congress’s goal
in enacting the ODA was to reduce the cost of and incentivize orphan drug development . . . the fact that following the
text of a statute may conflict with the statute’s larger purpose alone does not warrant departing from the text.” Id. at
355.
One judge dissented, arguing that the majority’s interpretation of the statute could result in “endless exclusivity,” and
finding that “FDA’s decision to condition exclusivity on a showing of clinical superiority over already-approved drugs
using the same active moiety flows from the Act’s plain language and basic structure.” Id. at 344–45 (Williams, J.,
dissenting). According to the dissent, “[t]he most likely explanation . . . for why Congress did not specify in § 360cc(a)
whether a drug’s exclusivity period would or would not be repeatable . . . is that such a notion would have been so far
afield from what Congress was contemplating at the time that it would not have occurred to any member of Congress as
something in need of clarification.” Id. at 347.
133 Stephanie Armour & Liz Essley Whyte, Something Congress Might Agree on: Tackling Drug Costs, WALL STREET
J. (May 8, 2023), https://www.wsj.com/articles/something-congress-might-agree-on-tackling-drug-costs-39f6574d.
U.S. DEPT. OF HEALTH & HUMAN SERVS., OFFICE OF THE ASST. SEC. FOR PLANNING & EVAL., Report to Congress:
Prescription Drug Pricing (May 20, 2020), https://aspe.hhs.gov/sites/default/files/migrated_legacy_files//194881/2020-
drug-pricing-report-congress-final.pdf.
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orphan drugs.134 Between the act’s passage in 1983 and 2018, the FDA has approved more than
500 orphan drugs,135 and more recently, between 2017 and 2021, orphan drugs made up about
half of the FDA’s drug approvals.136 At the same time, the median treatment cost for an orphan
drug upon market entry was more than $218,000, compared to the median cost of a non-orphan
drug at $12,798.137
Since its creation, the ODA has been criticized by some stakeholders for giving drug companies
too much power to monopolize and profit from lifesaving medications.138 Others argue that the
law is outdated and does not take into account more recent advances in science, whose increased
focus on genetic research tied to specific patient subpopulations makes it more likely that new
therapies will qualify as orphan drugs.139 Some critics of the law highlight that the ODA’s seven-
year exclusivity has often been abused, in their view, and that the exclusivity makes it more
difficult for patients to afford their medications.140 Others have praised the law for encouraging
manufacturers to invest in research and development for otherwise unprofitable drugs,
highlighting that without it, many lifesaving therapies would likely be unavailable.141
Stakeholders have also disagreed about whether the ODA should take into account drug-pricing
practices, as the ODA does not give the FDA authority to directly regulate drug prices or to
consider the impact of orphan-drug status on pricing.142

134 See, e.g., Orphan Drug Regulations, 56 Fed. Reg. 3338 (Jan. 29, 1991) (proposed ODA regulations). FDA states,
“The main purpose of the Orphan Drug Act is to stimulate innovation in developing treatments for patients with rare
diseases and conditions and to foster the prompt availability of therapeutically superior drugs. These proposed
regulations attempt to ensure that improved therapies will always be marketable, and that orphan drug exclusive
approval does not preclude significant improvements in treating rare diseases.” See also Orphan Drug Regulations, 57
Fed. Reg. 62,076, 62,077 (“Some comments argued that the proposed regulations go too far in protecting exclusive
marketing rights, while other[s] . . . argued that they do not go far enough . . . FDA believes the final rule achieves the
best balance possible between protecting exclusive marketing rights and fostering competition.”).
135 Shailin Thomas and Arthur Caplan, The Orphan Drug Act Revisited, 321 JAMA 833-34 (2019).
136 Hana Althobaiti, et al., Disentangling the Cost of Orphan Drugs Marketed in the United States, 11 HEALTHCARE 4
(Feb. 13, 2023), https://www.mdpi.com/2227-9032/11/4/558.
137 Id.
138 For example, in 2011 the FDA approved KV Pharmaceuticals’ drug Makena as an orphan drug to prevent preterm
labor, resulting in a large price increase for the drug, which had previously been available at compound pharmacies at
low cost. The price increase generated concern from Congress, with several members asking the Federal Trade
Commission to investigate potential pricing abuses. See, e.g., Press Release, Sen. Sherrod Brown Statement on Makena
Repricing, https://www.brown.senate.gov/newsroom/press/release/brown-statement-on-makena-repricing (April 1,
2011). The FDA later released a statement that it would not take enforcement action against pharmacies that compound
the generic version of the drug. See Andrew Zajac, Drug Maker Lowers Price of Makena Pregnancy Drug to $690 per
Dose, L.A. TIMES (April 1, 2011), https://www.latimes.com/health/la-xpm-2011-apr-01-la-pn-makena-price-cut-fda-
20110401-story.html.
139 Thomas and Caplan, supra note 118.
140 Jake Stump, WVU Research Shows How Much Pharmaceutical Companies are Capitalizing on Rare Drug
Incentives, WVUTODAY (June 12, 2023), https://wvutoday.wvu.edu/stories/2023/06/12/wvu-research-shows-how-
much-pharmaceutical-companies-are-capitalizing-on-rare-drug-incentives; see also, Orphan Drug Regulations, FOOD &
DRUG ADMIN., 57 Fed. Reg. 62076, 62077, where FDA addressed comments on the proposed ODA Regulations. FDA
noted, “Some comments argued that the proposed regulations go too far in protecting exclusive marketing rights, while
other[s] . . . argued that they do not go far enough . . . FDA believes the final rule achieves the best balance possible
between protecting exclusive marketing rights and fostering competition.”).
141 Abbey S. Meyers, Orphan Drug Tax Credits Save Lives, ABBEYSMEYERS.COM (December 10, 2017),
https://www.abbeysmeyers.com/memories/45-orphan-drug-tax-credits-save-lives; Gary A. Pulsinelli, The Orphan Drug
Act: What’s Right with It, 15 SANTA CLARA COMP. & HIGH TECH. L. J. 299 (1999).
142 57 Fed. Reg. at 62079 (“Although FDA understandings that costs can indeed have a major impact on access to a
drug, FDA has no authority over drug pricing or any authority to consider it in drug approval.”)
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The Government Accountability Office (GAO) evaluated the FDA’s orphan-drug processes,
including how the FDA has addressed the increase in demand for orphan-drug designations and
how FDA has addressed orphan-drug development challenges.143 The study was conducted by
analyzing FDA data, templates for orphan-drug designation applications, and interviews with
patient advocates, manufacturers, industry experts, and others.144 In its report, the GAO
highlighted competing views regarding the profitability of orphan drugs and the need for further
incentives for manufacturers to develop orphan-drug therapies.145 The report similarly
commented that much of the recent action FDA has taken to increase efficiency in its review of
orphan-drug designation applications does not address the wider disagreements about the unmet
need for rare disease treatments, the need for orphan-drug incentives, and the high cost of orphan
drugs, including the effects of these costs on patients.146
To address these and other concerns, Members of the 118th Congress have proposed various
amendments to the ODA, including changes to address the potential for uncertainty caused by the
11th Circuit’s decision in Catalyst.147 The Retaining Access and Restoring Exclusivity (RARE)
Act, proposed in both the 117th and 118th Congresses, would amend the ODA to mirror the
FDA’s interpretation of the scope of the exclusivity provision for approved or licensed orphan
drugs.148 Specifically, the RARE Act would codify the FDA’s interpretation of the “same drug for
the same disease or condition” language to read, “the same drug for the same approved use or
indication within such rare disease or condition.”149 Such a change would codify the FDA’s
regulations regarding the scope of orphan-drug approvals.150 More than 80 stakeholder groups,
including the National Organization for Rare Disorders and various foundations and associations
dedicated to the study of rare diseases, sent a letter to the leadership of the Senate Committee on
Health, Education, Labor and Pensions, urging the 117th Congress to enact the legislation.151

143 GOV’T ACCT. OFFICE, Orphan Drugs: FDA Could Improve Designation Review Consistency; Rare Disease Drug
Development Challenges Continue, Nov. 2018, https://www.gao.gov/assets/gao-19-83.pdf, at 1.
144 Id.
145 Id. at 1, 30.
146 Id. at 39-40.
147 Other proposals, such as the Fairness in Orphan Drug Exclusivity Act (FODEA), would limit market exclusivity for
drugs that receive an orphan-drug designation on the basis that the sponsor has no reasonable expectation of recovering
the costs of developing and distributing the drug. H.R. 456, 118th Cong. (2023). As part of a request to designate an
orphan drug, a sponsor must demonstrate an inability to recover research and development costs if the drug will be used
for a disease affecting more than 200,000 people. 21 U.S.C. § 360bb(a)(2)(B). FODEA would extend the requirement
of demonstrating cost-prohibitive status to the drug approval process as well, such that in order to be entitled to the
seven-year exclusivity, a manufacturer would have to demonstrate an inability to recover costs of the drug as of the
date the drug is approved. See H.R. 456, § 2(f)(1). A press release from Rep. Carter, the sponsor of the bill, states that
the proposal is intended to “close a loophole that allows drug manufacturers to block new treatment[] options for rare
diseases from coming to the market.” Press Release, Carter Introduces Bill to Close Loophole Blocking Rare Disease
Treatments from Market, Jan. 24, 2023, available at
https://buddycarter.house.gov/news/documentsingle.aspx?DocumentID=10861.
Another proposal, introduced as Cameron’s Law, proposes an amendment to the Internal Revenue Code to increase the
amount of the orphan drug tax credit from 25% to 50%. H.R. 1350, Cameron’s Law, March 3, 2023 (118th Cong., 1st
Session).
148 S. 4185, 117th Cong. (2022); S. 1214, 118th Cong. (2023). The two bills contain the same text.
149 Id. § 2(a)(1)–(2) (emphasis added).
150 21 C.F.R. § 316.31(b).
151 Letter from National Organization for Rare Disorders to Sen. Patty Murray and Sen. Richard Burr, Senate HELP
Committee (June 3, 2022), available at https://rarediseases.org/wp-content/uploads/2022/08/NORD-2022-ODE-Letter-
to-HELP.pdf.
Congressional Research Service

15

The Orphan Drug Act and Catalyst Pharmaceuticals, Inc., v. Becerra

Alternatively, Congress could also enact legislation codifying the 11th Circuit’s broader
definition, or choose to take no action.

Author Information

Hannah-Alise Rogers

Legislative Attorney

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