In 1983, the American parliament approved the Orphan Drug Act, the first law with the goal of R&S (Research and Development) promotion in the field of orphan drugs.
The main points of this law are:
The law represents both a scientific and an economic success. In fact, in the 17 years
preceding this law, the industries sponsored 34 drugs, 24 of which were experimental
In seven years of law pursuance, 39 out of 42 sponsored drugs were experimental orphan drugs.
From 1983 up until now, more than 900 drugs and biological products like orphan drugs have been designated, 743 will be soon used and 182 have completed their procedure receiving the Food and Drug Administration's approval.
Amazingly, the ones that studied and produced orphan drugs were not the big American industries, but the small companies that specialised in this production. The attention on orphan drugs has opened a new paradigm, i.e. the evidence that market niches can be interesting not only for industry, but also as a strategy element on which founding the development plans.
In 1993, Japan modified the Pharmaceutical Affairs Law in the direction of Orphan Drug Act.
After the Japanese law, in Australia a new program for orphan drugs' development was launched and Food and Drug Administration followed it. The Orphan Drug Act was useful as a model for other Countries: although the contribution is undoubted, the American law presented so many contradictions that in 1994 it was reviewed. Above all, the law's controversial points were:
Before 1994, the drug company, would have the complete drug monopoly, due to the seven
years' market exclusivity: in this way those companies had the opportunity to increase
their profit, but decreasing the product's quality level.
With the 1994's review, the market exclusivity was reduced to a three years' period, including the possibility of researching on the same drug by two companies.
The disincentives were mainly constituted of: