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Exceptions to the Rule Part 2: Module 5 of 5

Module 5: Exceptions to the Rules Part 2

All drugs are not created equal. We saw illustrations of that statement in Module 4 and we will continue to learn about unusual classes of medications that have motivated the FDA to modify the rules to make it faster and simpler for patients to obtain treatments: Orphan Drug designation, Fast Track approval, and Expanded Access (also known as Compassionate Use). We will consider the revised regulations to which they are subject and some of their drawbacks. Finally, we will take a brief look at a recent scientific development, Pharmacogenomics, that has presented the healthcare industry with unique legal and ethical challenges.

Expedited Approval For Drugs That Treat Serious Illnesses

FDA has developed four mechanisms by which drugs that treat serious illnesses can be made available to consumers more rapidly than treatments that must follow the typical processes of development and review[i]:

·     Priority Review designation: FDA’s goal in these cases is to take action on an application within 6 months after it is filed (vs. the usual target period of 10 months);

·     Breakthrough Therapy: This is a process designed to expedite the development and review of drugs which may demonstrate substantial improvement over available therapy;

·    Accelerated Approval: These regulations allowed drugs for serious conditions that fill an unmet medical need to be approved based on a surrogate endpoint- that is a measurement that can, in a relatively short period of time, predict clinical benefit rather than needing to wait for standard outcome measures like survival or disease progression; and

·     Fast Track: a process designed to facilitate the development and expedite the review of drugs to treat serious conditions and fill an unmet medical need. Under this designation, sections of an application may be submitted as soon as they are ready rather than the standard requirement for the application to be complete when submitted[ii].

Two 2015 studies revealed potential problems in these expedited approval methods: overuse of the procedures for drugs that are not “first-in-class” or groundbreaking, as was originally intended; and a decrease in the quality of supporting evidence being submitted by the sponsors. While FDA maintains that drugs approved through expedited programs meet the same standards as those subject to traditional review, this research raises serious questions. According to Aaron Kesselheim, who led both studies, “I do worry that these expedited programs, some of which were created in response to the AIDS crisis of the 1980s, are now being applied in cases that they don't belong, which wastes resources and potentially exposes patients to drugs that will be later found to be unsafe or not work as well as they were predicted to”[iii].

Orphan Drug Designation

It takes an average of 12 years and over US$350 million for a new drug to be discovered, tested, and approved[iv]. Pharmaceutical companies must carefully consider whether they would be able to earn sufficient profits from the sale of the drug to make this investment worthwhile. The development of medicines that are intended to treat “rare” diseases (defined in the US as occurring in less than 200,000 individuals[v]), is handicapped by the small market and relatively lower earnings that they can expect. Therefore, drug makers may be reluctant to devote resources to this effort leaving patients with few, if any, viable treatment options. To address this situation, the Orphan Drug Act was passed in 1983, providing the following incentives to makers of drugs that are afforded “orphan drug status”:

·     Federal tax credits of up to 50 percent of costs for the research done to develop an orphan drug;

·     A guaranteed 7-year monopoly on drug sales for the first company to obtain FDA marketing approval of a particular drug for its approved use(s); and

·     Waivers of drug approval application fees and annual FDA product fees. This is not an insignificant advantage, as the application fee (known as a Prescription Drug User Fee, or PDUFA) as of 2017 was $2,421,495 for applications requiring clinical data and $1,210,748 for applications not requiring clinical data. Product fees can amount to an additional $400,000[vi].

The Orphan Drug Act has had a meaningful impact on the development of badly needed treatments, with more than 650 drugs approved between 1983 and 2018[vii]. However, granting these incentives to pharmaceutical companies has had unforeseen effects.

Some drug makers have exploited the Orphan Drug Act’s loose definition of “rare disease” by following a practice with the whimsical name “salami slicing”, by which they divide up the overall market for a drug that targets a relatively common disease into subsets- each of which contains less than 200,000 patients- that have certain common medical characteristics. They then apply for orphan drug status for the same drug for treatment of one or more of those subsets.

In an example of another abuse of this designation, the makers of Makena, a treatment for women with a high-risk of premature delivery, were granted orphan drug status whereupon they increased the price of the drug from $20 to nearly $1500, bringing the total cost per patient to $30,000 and, thus, effectively reducing access to the treatment for most patients[viii]. Further improvements to the Orphan Drug Act, such as those expected to develop from the 2017 Orphan Drug Modernization Plan[ix], will continue to be necessary, as “there is need to balance economic incentives to stimulate the development and marketing of orphan drugs without jeopardizing patients’ access to treatment”[x].

Expanded Access

A drug may not be marketed or otherwise distributed for use before it is granted regulatory approval. Until that time, it is referred to as an investigational drug. However, in certain instances, controlled use of a drug prior to approval may be permitted- a situation known as “expanded access”, or “compassionate use”. Expanded access is defined as “the use of investigational drugs, biologics or medical devices outside the clinical trial setting for treatment purposes”[xi]. It may be permitted in cases where all the following criteria are satisfied:

·         The patient has a serious disease or condition, or whose life is immediately threatened by their disease or condition;

·         There is no comparable or satisfactory alternative therapy to diagnose, monitor, or treat the disease or condition;

·         It is not possible to enroll the patient in a clinical trial- for example, there are no ongoing trials, or the patient does not meet the eligibility requirements for a current trial;

·         Potential patient benefit justifies the potential risks of treatment;

·         Providing the investigational medical product will not interfere with investigational trials that could support a medical product’s development or marketing approval for the treatment indication.[xii]

Investigational drugs are still in the process of being tested or reviewed by regulatory agencies. Thus, the entire supply of the product is controlled by the manufacturer who has the sole choice whether to allow expanded access to their investigational drug. Requests for access by a patient to an investigational drug must come from his physician who will, if she believes it is justified, contact the manufacturer to provide the product to that patient for use outside of a clinical trial. The physician is responsible for ensuring that the patient meets all the requirements described above and for submitting the necessary paperwork to regulatory authorities, including getting approval for an “individual patient Investigational New Drug application (IND)” [xiii] . In some instances, a physician may request expanded access to a particular drug for more than one patient at a time.

The manufacturer also has some responsibilities[xiv]:

·       It must have a policy for responding to requests for expanded access and make it public and readily available;

·       If the drug maker agrees to provide the investigational drug to the physician who requested it, it provides written permission to FDA to provide information from the manufacturer’s IND- such as the chemistry, manufacturing and controls (CMC) section- to the physician so that she may include it in her individual patient IND.

The prospect of obtaining a new treatment- even one that has not yet demonstrated safety and efficacy- can be perceived by a patient as his last chance to fight a life-threatening illness. Some patient advocates claim that compassionate use is only available to those with access to physicians or hospitals that have the research interest and appropriately trained resources to be able to participate in the program. There are also some patient costs associated with the program that may not be covered by insurance. Regulators, too, have concerns about expanded access. Since the drug has not been fully tested, it remains unclear whether it will do any good. In fact, it might cause more harm or even hasten the patient’s death. Despite these drawbacks, interest in compassionate use of investigational drugs is high, with over 6,000 requests submitted to FDA between 2010 and 2014 and over 99.5% of the requests were accepted[xv].

Many drug makers resist expanded access for several reasons[xvi]:

·         The medicine might be used improperly, and its safety and efficacy are not yet completely understood. Therefore, unknown adverse events might be observed that would have to be reported to FDA and could negatively impact the drug’s chances for approval.

·         Some fear that the program could remove the incentive for patients to participate in clinical trials- particularly if they are concerned that they could be given placebo rather than the active drug- which could delay the drug’s approval.

·         Investigational drugs are typically manufactured in relatively small quantities and may require a long time and a lot of money to make more. Allowing individuals to use these limited supplies will decrease the amount available for clinical trials. 

All these factors could impact the availability of the drug to many more patients once it is approved for marketing. Thus, expanded access can pose an ethical dilemma to drug makers and regulators: do “the needs of the many outweigh the needs of the few…or the one[xvii]”?


In the year 510 BCE, Pythagoras observed that some, but not all people had a fatal reaction after eating fava beans.This was later attributed to a genetic disorder called Glucose-6-phosphate deficiency[xviii] and was the first recorded example of what would ultimately become the field of Pharmacogenomics[xix].

Pharmacogenomics (also known as Pharmacogenetics) is “the study of how genes affect a person’s response to drugs. This relatively new field combines pharmacology (the science of drugs) and genomics (the study of genes and their functions) to develop effective, safe medications and doses that will be tailored to a person’s genetic makeup.”[xx] Minor variations in the genetic makeup of an individual can, in theory, be correlated with that person’s response to drugs.The ability of physicians to analyze a patient’s genome (genetic makeup) and the inclusion of data on genetic markers in some drug labels is now leading toward the development of personalized medicine in which a drug will be selected and administered at a specific dose that would display the greatest efficacy and the fewest side effects for a particular patient[xxi]. While there is vast potential for improvement in patient care by this method, it also contains the possibility of ethical complications.

The availability of genetic information may make a person vulnerable to genetic discrimination. This was observed when some state governments mandated that African Americans undergo testing for Sickle Cell Anemia, resulting in discrimination by health insurers and employers who were able to act based on information about carriers or current victims of the disease. In response, Congress enacted the 1972 National Sickle Cell Anemia Control Act that withheld federal funding from states that required sickle cell testing[xxii]. In 2008, the Genetic Information Nondiscrimination Act (GINA) was passed that broadened the focus of the 1972 law with the following provisions:

·         It is illegal for employers or insurers to require the purchase of genetic tests;

·         Insurance companies are prohibited from using genetic information to adjust premiums, deny coverage, or impose restrictions relating to preexisting conditions;

·         Companies with 15 or more employees are prohibited from requiring or using genetic information, including asking for a medical history, in connection with employment decisions[xxiii].

The unique drug development strategies and regulations that differentiate pharmacogenomics from traditional drug development and regulation may create new areas of legal liability or ethical questions. We will now briefly discuss a few of these potential issues that were methodically analyzed in an analysis by Mark A. Rothstein[xxiv].

·         Distributional ethics: Pharmacogenomics involves the creation of a drug that targets one of the genetic variations (called polymorphisms) that are associated with a disease. Let’s assume there are a dozen such polymorphisms of a particular drug target. The cost to develop a single drug and the relative numbers of patients displaying each polymorphism present pharmaceutical companies with the dilemma of how to allocate their limited resources.

·         Product Liability and Failure to Warn: “If a manufacturer fails to adequately warn of potential dangers of its products' use, it may be liable for any resulting injuries”[xxv]. Rothstein notes that this liability may precede the development of an actual pharmacogenomic treatment and can occur based on the existence of the relevant scientific methods:   

“As soon as it is possible to detect varied response to a pharmaceutical product, manufacturers have a duty to inform potential users of that variation and suggest that they undergo genetic testing even though there is no special product, special dosage, or other attempt to target the product to a particular genotype. Here, the duty to warn involves warning about potential adverse event identifiable by genetic testing”[xxvi].

·         Malpractice for failure to warn at-risk relatives:  A physician is bound to respect the confidentiality of her patients’ private information.[xxvii] At the same time, according to the American Medical Association’s Code of Medical Ethics, she “should discuss the implications of genetic information for family members prior to testing and should define circumstances under which patients would be expected to notify their relatives of the risks associated with that information”[xxviii]. Thus, the failure of a physician to warn at-risk relatives could possibly result in malpractice liability.


Pharmaceutical companies confront the dual challenges of making safe and effective treatments while pursuing financial gain for their shareholders. Regulatory agencies work with drug makers, healthcare providers, and patient advocate groups to develop and enforce regulations to protect the interests of the patients. We have looked at some of these rules and a few examples of those who violated them. Our discussion included categories of medicines whose exceptional characteristics have led to the creation of special processes and pathways toward marketing approval. Finally, we delved into a few of the legal and ethical issues that may arise with the advent of new technologies, using the evolving field of Pharmacogenomics as a case study.

Thank you for participating in our program on legal and ethical aspects of drug development. While this course provided an overview of this subject matter, we encourage you to take our other video courses in areas that are most relevant or interesting to you.



[xii] id

[xiv] id

[xvii] As stated by Mr. Spock and Captain Kirk in “The Wrath of Khan” (1982)

[xxiii] id

[xxiv] Rothstein, Mark A., Liability Issues in Pharmacogenomics (2005). Louisiana Law Review, Vol. .66, 117-124, 2005

[xxvi] Op cit, Rothstein