A Potential Canada-Wide Orphan Drug Policy? Why Canada Should Implement This and What It Should Include.

The federal election is around the corner. Political parties are campaigning and making new promises. With this in mind, the Liberal Party, today, promised to implement an orphan drug policy if re-elected. Canada is currently one of the few developed jurisdictions without a nation-wide orphan drug strategy. Below, this piece will discuss why Canada should adopt a national orphan drug policy and what it should include.

Firstly, one needs to define what is an orphan drug. Orphan drugs are drugs that treat rare diseases. Rare diseases are disease or conditions that affect small amounts of the population. Exact definitions differ jurisdiction to jurisdiction. For example, the European Union requires that a disease must have a prevalence rate of less than 5 per 10 000 people or it be particularly “debilitating” to be classified as “rare”.[1]

Despite being called “rare diseases”, their impact is significant. If all the people who had rare diseases lived in one country, it would be the third most populous nation in the world.[2] Rare diseases often strongly affect the family and caregivers of individuals with such conditions.[3] Therefore, it is vital to help individuals with such rare diseases.

While it is important to help such people, unfortunately pharmaceutical companies might not find it economically viable to produce orphan drugs. Orphan drugs are meant for a small segment of the market. The production of orphan drugs needs to be encouraged. This is why sui-generis orphan drug legislation is important.  For example, after the USA introduced the 1983 Orphan Drug Act, which provided tax credits for testing orphan drugs, grants for producing said drugs and afforded seven years exclusivity for such drugs, the FDA approved more than three hundred orphan drug applications.[4] In contrast, it approved ten orphan drug applications from 1973 to 1983.[5]

Related to how federal orphan drug policies have been associated with an increase in orphan drug applications, a lack of a national orphan drug strategy has led to comparative disadvantages for Canadians with rare diseases.  Compared to EU citizens, Americans or Japanese citizens, Canadians wait six years longer for orphan drugs and only sixty percent of orphan drugs make it into Canada.[6] Therefore, it crucial to have a Canada-wide orphan drug strategy. It could remedy this situation.

While Canada is a relative latecomer to adopting a federal orphan drug policy, that provides an unique benefit. Canada can avoid the mistakes of other jurisdictions.  For example, Canada can implement exclusivity periods that are contingent upon “fair pricing”.[7] Due to the quasi-monopoly status of exclusivity, some corporations charge excessive prices for orphan drugs.[8] Various activists argue that only permitting exclusivity periods if a corporation promises to ensure prices are fair is a potential antidote to this problem.[9]

Similarly, Canada can also avoid prevalence-based definitions of “rare diseases”. Researchers note that some orphan drug treatments are profitable and can cost anywhere from $100 000 to $200 000. [10]  The public might not be happy subsidizing the cost of profitable drugs which could result in general hostility towards the entire program.  Additionally, prevalence-based definitions have led to “salami slicing” where corporations down an entire drug market into “smaller components” by setting specific parameters.[11] This permits drugs that treat relatively common diseases to qualify for the advantages afforded to orphan drugs and again this could annoy some.[12] A possible alternative to prevalence-based definitions are “disease pathways”-rooted definitions.[13]

To conclude, all Canadians and political parties should get behind an orphan drug policy. Our framework could be evidence-based incorporating what works and avoiding what does not.  As a country we owe it to our fellow Canadians with rare diseases.

Author: Margot Mary Davis

This piece does not constitute legal advice.


[1]Commission Regulation (EC) 847/2000 of 27 April 2000 laying down the provisions for implementation of the criteria for designation of a medicinal product as an orphan medicinal product and definitions of the concepts ‘similar medicinal product’ and ‘clinical superiority’, [2000] OJ, L 103/5 at 2(1)(a) [Commission Regulation (EC) 847/2000].

[2] Medunik Canada Inc, “What is a Rare Disease?” (2016), Medunik Canada Inc (website), online:< https://www.medunikcanada.com/en/rare-diseases-community/what-is-a-rare-disease> [Medunik Canada Inc.].

[3] Ibid.

[4] An Act to amend the Federal Food, Drug, and Cosmetic Act to facilitate the development of drugs for rare diseases and conditions, and for other purposes, 96 Stat ⸹ 2049 at 1(b)(1) (1983) [Orphan Drug Act]; Enrique Seoane-Vazquez et al, “Incentives for Orphan Drug Research and Development in the United States”(2008) 3:33 Orphanet Journal of Rare Diseases 1 [Enrique Seoane-Vazquez et al].

[5] Enrique Seoane-Vazquez et al, ibid.

[6] Medunik Canada Inc., supra note 2.

[7] Eve Roberts, Matthew Herder, & Aidan Hollis, “Fair Pricing of “Old” Orphan Drugs: Considerations for Canada’s Orphan Drug Policy” (2015) 187:6 CMAJ 422 at 424 [Eve Roberts, Matthew Herder & Aidan Hollis].

[8] Sarah Jane Tribble, “Drugs for Rare Diseases have become Uncommonly Rich Monopolies”, National Public Radio (17 January 2017), online:< http://www.npr.org/sections/health-shots/2017/01/17/509506836/drugs-for-rare-diseases-have-become-uncommonly-rich-monopolies&gt;.

[9] Eve Roberts, Matthew Herder & Aidan Hollis, supra note 7.

[10] Matthew Herder, “What is the Purpose of the Orphan Drug Act?” (2017) 14:1 PLoS 1 at 2 [Herder].

[11] Herder, supra note 10 at 1; Yvette Leung, “Funding Orphan Drugs: Pitfalls of the Orphan Drug Act”, Harvard College Global Health Review (19 October 2012), online:< https://www.hcs.harvard.edu/hghr/print/student/orphan-drug-act/&gt;.

[12] Herder, supra note 10 at 2.

[13] Ibid.

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