By its express language, § 360cc provides exclusivity and protection from others marketing the same drug for the rare disease or condition for which the orphan drug was designated pursuant to § 360bb. Fourth, the district court's reliance on Spectrum Pharmaceuticals, Inc. v. Burwell , 824 F.3d 1062 (D.C. Cir. 2016), and Sigma-Tau Pharmaceuticals, Inc. v. Schwetz , 288 F.3d 141 (4th Cir. 2002), in support of its finding of ambiguity was misplaced. In Spectrum , the question before the court was whether intended off-label use mattered for purposes of § 360cc(a) ’s exclusivity.
By the early 1980s, concerns had arisen that the high costs of research, development, and winning FDA approval had deterred the development of drugs to treat rare diseases, often referred to as "orphan drugs." See Spectrum Pharm., Inc. v. Burwell, 824 F.3d 1062, 1064 (D.C. Cir. 2016); Genentech, Inc. v. Bowen, 676 F. Supp. 301, 302-03 (D.D.C. 1987). Accordingly, in 1983, Congress enacted the Orphan Drug Act to encourage pharmaceutical companies to develop such drugs.
An orphan drug is one that "is designed to treat a rare disease or condition that historically received little attention from pharmaceutical companies, and hence became ‘orphaned’ because the comparatively small demand for treatment left little motive for research and development."Spectrum Pharm., Inc. v. Burwell , 824 F.3d 1062, 1064 (D.C. Cir. 2016) (citing § 1(b)). The ODA’s goal is to "reduce the costs of developing" and "provide financial incentives to develop [orphan] drugs."
Appellee's Br. 20. Policy concerns cannot, to be sure, turn a textually unreasonable interpretation into a reasonable one. See General Dynamics Land Systems, Inc. v. Cline , 540 U.S. 581, 600, 124 S.Ct. 1236, 157 L.Ed.2d 1094 (2004) ; cf. Spectrum Pharm., Inc. v. Burwell , 824 F.3d 1062, 1068 (D.C. Cir. 2016). Regardless of that, however, we think that the agencies overstate the supposed loophole.
Its purpose was to encourage the development of so-called “orphan drugs,” that is, drugs that are “designed to treat a rare disease or condition that historically received little attention from pharmaceutical companies.” Spectrum Pharms., Inc. v. Burwell, 824 F.3d 1062, 1064 (D.C. Cir. 2016). “When the potential market for a drug is small because the target market is relatively small, it is difficult for a pharmaceutical manufacturer to recover the large research and development costs, and even more difficult to realize a worthwhile return on that investment.” Baker Norton Pharms. v. FDA, 132 F.Supp.2d 30, 31 (D.D.C. 2001).
In 1983, Congress enacted the Orphan Drug Act to provide pharmaceutical companies with benefits to incentivize the development of “orphan drugs”-that is, drugs that treat rare diseases. See Spectrum Pharm., Inc. v. Burwell, 824 F.3d 1062, 1064 (D.C. Cir. 2016). One of those benefits, typically referred to as “orphan-drug exclusivity,” is a seven-year period during which the FDA may not approve any other manufacturer's application to market the same drug to treat the same rare disease.
In Spectrum, the D.C. Circuit considered whether the FDA should not have approved the defendant's generic version of the drug, levoleucovorin, used to treat liver damage caused by methotrexate therapy (a type of chemotherapy) and manage pain from colorectal cancer. See 824 F.3d 1062, 1064 (D.C. Cir. 2016). The plaintiff, Spectrum Pharmaceuticals — which had obtained ODE for the colorectal indication — sued the FDA when it approved the generic drug for methotrexate indications.