Washington Editor

WASHINGTON – Creating arbitrary subsets of patients to game the orphan drug process is one of the loopholes the FDA intends to close with a proposed amendment meant to clarify its orphan drug regulations.

As written, the current regulations allow sponsors to get orphan status for a drug to treat a subset of patients with a nonrare disease so long as they provide "a demonstration that the subset is medically plausible." However, the term "medically plausible" has not been defined, resulting in some drugmakers attempting to create artificial subsets of fewer than 200,000 U.S. patients to take advantage of orphan drug incentives such as tax credits and seven-year market exclusivity, the FDA said in the proposed rule.

"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," according to the agency.

To clarify the use of subsets, the FDA proposes eliminating the term "medically plausible." Instead, sponsors would be required to demonstrate that a proposed subset rests on a nonarbitrary foundation. One way to do that would be to show there is a reasonable scientific or medical rationale for limiting the investigation and potential use of the drug to the subset.

Another clarification in the proposed rule, which was scheduled for publication in the Federal Register Wednesday, would set a one-year deadline for responding to the FDA on a deficiency letter.

The current regulations give no time frame for sponsors to respond to the letters. As a result, the FDA said some sponsors have taken years to respond to the agency. During that time, many issues could change, including the prevalence of the disease.

In proposing a one-year deadline, the FDA would allow for some extensions – provided the sponsor requests one within a year of receiving the deficiency letter. However, if sponsors miss the deadline, the agency would consider the orphan drug request voluntarily withdrawn.

While the proposed rule is open for comment through Jan. 17, 2012, the FDA is specifically seeking feedback on how to make its publication of orphan drug designations more meaningful. The agency posts a monthly list of designated drugs, but the listing of a drug doesn't necessarily mean the sponsor is still actively developing it for the orphan disease or indication, the FDA said.

In the past, some sponsors have failed to submit annual reports as required for designated orphan drugs, and others have terminated their orphan-drug development program without notifying the FDA.

The agency is considering ways to make the development status of an orphan drug publically available, including the publication of whether a sponsor has submitted the required annual reports.

Other proposed revisions include:

clarifying the eligibility for orphan drug designation of a drug that was previously approved for that orphan indication;

expanding the provisions for the eligibility for multiple orphan drug exclusive approvals;

revising provisions dealing with the demonstration of clinical superiority;

allowing a chemical name or a meaningful descriptive name to be used in a request for orphan designation if no generic or trade name is available for a drug;

specifying the information needed to conduct a review of a request for orphan drug designation;

removing the requirement to submit a statement as to whether the sponsor submitting the orphan request is the real party in interest;

clarifying that a sponsor may request orphan-drug designation at any time in its drug development process prior to submitting a marketing application for the drug for the rare disease or condition.

The proposed revisions are based on issues that have arisen since the orphan drug regulations were published in 1992, the FDA said. Since that time, the agency has received more than 3,350 requests for orphan drug designation.

FDA Chemist Pleads Guilty to Insider Trading

A former FDA chemist pleaded guilty Tuesday to one count of securities fraud and one count of making false statements, related to a $3.7 million insider trading scheme spanning nearly five years.

Cheng Yi Liang, of Gaithersburg, Md., who worked as a chemist at the FDA's Office of New Drug Quality Assessment, admitted that from July 2006 through March 2011, he used nonpublic information he obtained from the agency's internal tracking system for new drug applications and other sources to trade in the securities of drug companies. Using the accounts of relatives and acquaintances to execute the trades, he realized total profits and losses avoided of more than $3.7 million, according to a Department of Justice news release. (See BioWorld Today, April 11, 2011.)

Liang also failed to disclose the controlled accounts or trading income on the financial disclosure forms he was required to complete annually as an FDA employee to show investment assets valued at more than $1 ,000 and sources of income greater than $200.

He faces a maximum of 20 years in prison and a $5 million fine on the securities fraud and a five-year sentence and $250,000 fine for the false statement count. Sentencing is scheduled for Jan. 9, 2012. As part of a plea agreement, Liang will forfeit nearly $3.8 million, including a home, condominium and funds held in 10 bank or investment accounts. The SEC is pursuing civil charges against Liang and several accounts he controlled. (See BioWorld Today, June 6, 2011.)