Advancing the Brain Industry Together

                                       Neurodegenerative Drug Incentive Initiative

                              Proposal for Market Exclusivity Extension for Disease Modifying Therapies Targeting the Nervous System

Neurodegenerative diseases, including Alzheimer’s and Parkinson’s, constitute a large unmet medical need as well as a massive and growing drain on the US healthcare system. The proposal herein to extend the period of market exclusivity for certain therapeutics is based on historical precedent of the Orphan Drug Act and the following facts:

  • The development of novel therapies that cure, slow the progression of, or prevent the onset of neurodegenerative disease, instead of simply mitigating its symptoms for a short period, is an extremely long and costly process.
  • To date there are no disease modifying therapies approved for Alzheimer’s or Parkinson’s. Based on development timelines of potential disease-modifying drugs, we estimate that many drugs will have less than 5 years’ exclusivity when reaching the market.
  • The lack of sufficient time of market exclusivity for developers means they are unable to recoup their investment, leading many investors and developers to abandon disease modifying approaches entirely.
  • A guaranteed market-exclusivity period of 10 years would encourage development of such therapies which will otherwise not be developed.
  • It is in the public interest to provide such changes and incentives for the development of disease modifying drugs.
The problem
Brain-related illnesses, also known as Central Nervous System (CNS) diseases, afflict more than two billion people worldwide. Many of the most devastating CNS diseases are neurodegenerative. Neurodegenerative diseases refer to those conditions in which neurons in the brain, eye and spinal cord undergo progressive degeneration and eventual death. In addition to immeasurable human suffering and caregiver burden, the worldwide economic impact of brain-related illness has reached over $2 trillion a year. In the US alone, neurodegenerative disease accounts for more than $1.3 trillion of nondiscretionary health-care spending. Since brain cells are rarely replaced by the body, sufferers of these diseases must cope with the loss of brain and body function for the rest of their lives. The best-known and most devastating member of this category is Alzheimer’s disease, in which higher brain cells slowly die, robbing sufferers of their memory, and ultimately their identity and dignity. Neurodegenerative diseases such as Parkinson’s disease, Amyotrophic Lateral Sclerosis, or Lou Gehrig’s disease, Huntington’s disease, and macular degeneration target many distinct parts of the nervous system but have the shared effect of slowly eliminating the ability function and care for oneself. The signature of many of these diseases is their incidence increase with age; the chance of developing Alzheimer’s disease, for example, doubles every five years over the age of 65. Because of this, the epidemic of neurodegenerative disease will continue to increase as life expectancy increases.

Unlike most other major disease areas – cancer, heart disease or metabolic disease – the pace of new drug development for neurodegenerative diseases has not matched the growing footprint of these diseases in the aging US population. Therapeutic development in these areas of neurology remains uniquely challenging compared to other disease areas; the studies needed to prove that new medicines that target brain degeneration are safe and effective are much longer, more complex, and more costly and more prone to failure than in any other disease area. The Food and Drug Administration (FDA) has to date approved only a relatively small number of new medicines to treat neurodegenerative conditions, like Alzheimer’s disease. In almost all of these cases, the approved treatments mitigate only the symptoms of the disease without addressing its underlying cause; the medical need for so-called diseasemodifying therapies in neurology remains especially high, and almost entirely unmet.

Future therapeutic prospects for neurodegenerative disease rest on the shoulders of large pharmaceutical companies, who have broad expertise in CNS drug development, as well as smaller specialty biotechnology companies that focus exclusively on a particular disease. The challenges that both types of company currently face have never been more vexing. Increasing clinical-trial and capital risk, as well as higher regulatory and comparative-effectiveness standards, continue to imperil the prospects for new therapies against neurodegenerative disease. In response to these systemic challenges, several large drug companies have recently shuttered their neuroscience research and development efforts, a fact that has prompted widespread concern and review by the Institute of Medicine. Without a steady flow of new medicines in the pipeline, the US is in danger of having the standard of care for these diseases remain unchanged over an entire generation.

The solution:
Historically, Congress has deployed various federal initiatives to address the innovation deficit that affects unmet medical needs. These include tax credits, transferrable vouchers than entitle a pharmaceutical sponsor to expedient review of future drugs, and extended market exclusivity, in which the period during which a new drug is protected from direct competition from generic versions is prolonged. Additional measures supported by policy-makers, such as so-called “pre-competitive” spaces, in which drug companies share selective drug-target data to avoid costly research replication, and public-private partnerships. Of all the federally-mandated incentives used to promote the development of new medicines, recent history suggests that the extension of market exclusivity remains the single most effective. No area of drug development has benefitted from this incentive system more than rare, or ‘orphan’, diseases, defined to be any serious medical condition that affects fewer than 200,000 Americans at one time. The Orphan Drug Act (ODA), passed almost thirty years ago, offered a number of incentives to pharmaceutical companies to invest in disease areas where there would otherwise be no compelling economic argument to allocate resources, given the small size of the ultimate market for those orphan medicines. The ODA has been near-universally heralded as policy success by physicians, patient advocates and academics; indeed, since its enactment, there have been over 300 products approved as “orphan” drugs under its provisions, compared to a mere handful prior to its passage. Of all is provisions, it is the extension of orphan-drug market exclusivity from 5 to 7 years that is generally considered to be the most important driver of new drug development.

Neurodegenerative disease currently faces many of the same drug-development challenges that orphan diseases do. To demonstrate that a new medicine is effective against chronic degenerative disease like Alzheimer’s requires a clinical study that must enroll and retain a large number of patients, that needs to extend over many years, and which must monitor the progression of a disease that cannot yet be quantified by a simple laboratory test. The resulting trial is risky, expensive, and time-consuming (many additional years of clinical development time due to years-long trials, compared to shorter non degenerative trials), yet our existing intellectual-property framework makes no marketplace allowance for the systematically higher cost of CNS programs compared to other drug discovery areas. The dilemma of disproportionately high up-front costs is the exact counterpoint to the orphan-drug scenario, where the eventual market for a drug is unduly small compared to development costs. In both cases, however, the calculus is the same: without additional incentives, the cost-benefit analysis does not favor therapeutic investment.

Given the success of the ODA in stimulating new drug development under otherwise unfavorable riskreturn odds, it is logical to apply a similar principle to CNS disease. In the same way that Congress considered incentives necessary to encourage pharmaceutical companies to develop drugs for diseases with relatively small patient populations, we believe that market exclusivity can be used to spur drug development that is currently hindered by high R&D costs specific to developing disease modifying treatments for neurodegenerative disease.

The Neurotechnology Industry Organization (NIO) believes that circumstances are currently ideal for new legislation, built a cornerstone of extended market exclusivity, which provides targeted incentives to developers of neurodegenerative-disease medicines. Many companies in our membership are well positioned to take immediate advantage of such an incentive, and are expected to develop compelling drug candidates that are currently shelved by development-cost considerations. From a federal-budget perspective, granting new market exclusivity is deficit-neutral, and therefore an attractive policy lever in the current fiscal climate. Finally, we note that this legislation will stimulate substantial new translational research on neurodegeneration, with the prospect of additional public-private collaborations to better understand biomarkers for these diseases. Such a development would sit squarely within what the FDA’s Center for Drug Evaluation and Regulation (CDER) has recently outlined as one of its seven 'regulatory science needs’: “We need to improve [the] selection or definition of study end points, especially in disease conditions such as chronic degenerative diseases for which end points for progression may not be clearly defined”.

NIO proposes to form a working group drawn from government, industry, academia and disease advocacy to develop a market-exclusivity incentive targeted specifically to neurodegenerative disease. While we believe that industry, as well as government funders and regulators will be broadly receptive to this effort, one of the main priorities of this discussion will be to structure this incentive in a way that addresses and pre-empts concerns about containing healthcare costs. The working group will ensure that whatever specific form of market exclusivity is eventually proposed is fairly structured, acceptable to health-care payers, and linked to a careful review of its intended effectiveness. Having defined a consensus framework for the legislation, our next goal will be to demonstrate to lawmakers the deep support for such an incentive the industry, and to make the case that adopting such legislation will have a
game-changing impact on US brain health as well as on economic development and job creation. Please join us as we take the first steps to enacting this important step to better brain heath for all Americans. 

Contact John Reppas, NIO's Director of Public Policy for more information on how to join this working group.