One by one, victims of these diseases and their family members described lives of helpless isolation, driven by the unending and often futile search for answers about their condition and medical care to treat it. Most had nowhere to turn. The sights, sounds, and personal stories brought many of us to the point of tears. It was as if someone had pulled back a curtain to reveal an entire segment of society that no one knew was there: Gathered together in a congressional hearing room before the national media were human beings with diseases so disabling or disfiguring that they never came out in public. In my thirty-five years as a congressman, I have never witnessed a more powerful scene.
AT THE SAME TIME THAT WE WERE USING THE HEARING PROCESS to conduct a public inquiry and raise awareness, Bill Corr and others on my subcommittee staff embarked on a major survey of drug companies, federal research agencies, and university scientists to gain a thoroughgoing understanding of how the drug development process worked and why it was not yielding treatments for rare diseases. We wanted to know how many orphan drugs existed, why promising compounds often languished in the laboratory, and which entity—government or industry—was ultimately better equipped to address the problem.
From the outset, we met stiff resistance. Drug company executives didn’t want to appear before Congress for fear of looking mean-spirited. Instead, representatives of the industry’s trade group, the Pharmaceutical Manufacturers Association (PMA), claimed that, contrary to all outward appearances, drug companies in fact had no problem at all developing treatments for orphan diseases, and would oppose any legislation aimed at making them do more. This is an unfortunate and all too common refrain from trade groups in any industry and a big reason why such organizations often pose the greatest obstacle to good legislation. Because trade groups exist to represent the interests of an entire industry, their main concern is maintaining the happiness of all their members. Even legislation that is supported by a broad array of drug companies, and opposed by only a vocal few, will typically engender opposition from the PMA: Trade groups always push to weaken a bill to the point where none of their members object to it, which is why they are often such a negative force in the legislative process.
Our survey nevertheless laid out the full extent of the problem. Doctors had identified about two thousand rare diseases. We turned up 134 drugs used to treat them, forty-seven of which were approved for use in the United States. Contrary to industry claims, only ten of these forty-seven drugs had been developed and marketed by U.S. pharmaceutical companies in the last decade. Here was clear proof that the current system wasn’t working.
The survey also revealed other important reasons why drugmakers did not develop most of the promising orphan compounds that scientists discovered. In addition to serving markets too small to make desirable targets, we found out that many orphan drugs were not patentable or that their patents had expired, and thus offered much smaller profit potential. By law, most drug patents provided the manufacturer an extremely valuable seventeen-year period of exclusive control. The clock started ticking when the patent was awarded. But since orphan drug development was seldom cost-effective and therefore not a priority, patented compounds that might have yielded treatments for orphan diseases often lingered undeveloped until the seventeen-year window had closed. Lacking the potential to produce a temporary windfall, developing the orphan drug became an even harder sell.
Finally, we learned that drugmakers had an understandably difficult time meeting FDA testing requirements. It’s impossible to run hundreds or thousands of patient tests on a drug designed to treat a disease that only affects a few dozen people each year. Consequently, the clinical trials surrounding orphan drugs were often fraught with great uncertainty. The risk that the FDA might not accept the improvised testing that orphan drug development sometimes entailed had an additional chilling effect on pharmaceutical companies.
One purpose of the survey was to shed some light on the question of whether government or industry was better equipped to develop treatments for rare diseases. Holtzman and Weiss had shown that a compelling argument could be made for having the NIH do the job. But our investigation convinced us that this was not the best approach because NIH, as a research institute, had no experience in developing drugs for the commercial market. The true expertise and resources lay in the private sector, so finding a way to interest pharmaceutical companies in pursuing treatments seemed to offer the best chance of success. We wrote the Orphan Drug Act with this in mind, creating a host of new incentives for private industry, and introduced our bill in December 1981.
The secret to crafting legislation that works is not ramming through a partisan bill, but rather designing one that is acceptable to all parties. The pharmaceutical industry had made clear that it did not want a new law. But we intended to pass one anyway. From the outset, our challenge was clear: We had to find a way to persuade private drugmakers, which actively opposed our efforts, to address orphan drugs, and believed that the key to changing their outlook was to design legislation that accounted for the financial and procedural hurdles they faced.
The easy way to gain industry support would have been to lower the FDA approval standards for orphan drugs. Many patient groups, desperate for a cure, would have accepted this as the only feasible way to bring these drugs to market. But weaker safety and effectiveness standards would have further imperiled sick people’s health and tempted drugmakers to abuse the loophole, so while flexibility is the key to any deal, we vowed that safety and efficacy was the one area where we would brook no compromise. Shortcuts were out of the question.
Instead, our bill encompassed three major incentives for pharmaceutical companies, each addressing a specific impediment to orphan drug development that we had uncovered in our survey and hearings. The first component eliminated the patent problem by providing a “market exclusivity provision” guaranteeing the drug’s manufacturer a seven-year monopoly—in addition the clock would not start ticking until much later in the regulatory process, after the drug had received FDA approval. The second component eased the regulatory burden by encouraging pharmaceutical companies to consult with the FDA during the clinical testing phase, collaborating on the tricky question of how best to run tests when a disease affects only a small population and thereby removing the element of uncertainty. This was an admittedly unusual approach, since the FDA is a regulatory body charged with rendering impartial judgment—it was a bit like collaborating with the teacher who was about to grade your test. But we thought it was the best way to remove the deterrent. Toward that end, the third component of the bill was a 90 percent tax credit designed to pay most of the cost of clinical trials. To encourage research and innovation, the bill also established an Office of Rare Diseases at NIH.
THE KLUGMAN HEARING HAD A GALVANIZING EFFECT THAT INstantly improved the bill’s prospects. No longer were orphan diseases the obscure problem they had been just a year earlier. A third hearing, held in March 1982 to highlight our survey findings, improved them further, since our proposed solution did not entail an expensive new government program and offered a package of financial incentives and cost reductions that the Pharmaceutical Manufacturers Association, after some discussion, decided was acceptable after all. Ordinarily, a bill would start out in subcommittee, work its way through full committee, and eventually come to the House floor. But the subcommittee and full committee chairmen can, if they so desire, jointly agree to speed up the process by taking up a bill directly in committee, which is what happened to the orphan drug bill. On September 15, John Dingell, the chairman of the House Energy and Commerce Committee, called up the bill. Seeing widespread support, Dingell called for a voice vote, which is the easiest way to move ahead when you have overwhelming consensus and nobody in the opposition demands to have the vote recorded. As it turned out, no opposition materialized, and the measure passed unanimously.
Nevertheless, popular bills can still run into unexpected trouble or delay. Outside factors like news events can suddenly
alter the political landscape and derail legislation that once seemed certain to land on the president’s desk. Even in ordinary circumstances a bill’s author loses a measure of control when legislation is reported out of committee. The next step on the procedural path is the Rules Committee, which determines the amount of time allotted for floor debate, the number of amendments that can be offered, and sometimes even the specific nature of those amendments. Rules votes are invariably party-line affairs, so the tyranny of the majority always threatens to intrude.
One way to avoid all this is to ask the speaker to place the bill on the suspension calendar, a fast-tracking process for legislation that has at least two-thirds support of the House. The suspension calendar literally “suspends” the rules, forbidding any amendments, limiting debate over a bill to forty minutes (twenty for each side) and bringing the measure to a prompt vote. The Orphan Drug Act of 1982, as our bill was now officially titled, was placed on the suspension calendar and approved on September 28, 1982.
To become law, an identical bill must pass both houses of Congress. Normally, a senator and a congressman introduce similar bills whose differences are reconciled in a House-Senate conference if both chambers approve them. The compromise bill that emerges from conference then must pass each chamber before it can obtain a presidential signature. Sometimes the back-and-forth between the House and Senate gets tricky.
Since no senator had introduced orphan drug legislation, our House bill was sent over to the Senate for consideration, whereupon it was held at the Senate desk, pending the decision of the Senate’s majority party. A senator can request that a bill held at the desk be assigned to the relevant committee for action. If no such request is made, the bill stays at the desk until the majority leader calls it up for a vote. Since Republicans controlled the Senate, the bill’s fate lay in the hands of Orrin Hatch of Utah, chairman of the Senate Labor and Human Resources Committee, which had jurisdiction over drug legislation.
Hatch signaled his interest in the orphan drug measure—a potentially worrisome development because we needed his support. We were relieved to learn, however, that rather than block the bill, Hatch intended to use it as a vehicle for a series of unrelated initiatives that he and an assortment of colleagues wanted to pass. This is a common legislative tactic when a noncontroversial bill has passed one chamber and awaits action in the other, and Hatch used it more frequently than most. But his benign intentions did not yet get us out of the woods. Any changes to the bill, even ones that were not intended to kill it, could nonetheless have unintended consequences that would bring about the same result.
Hatch’s main interest turned out to be an amendment establishing a cancer research and screening program for 200,000 people in and around Utah who were exposed to radiation from nuclear weapons testing in the 1950s, and, in many cases, later developed cancer. Once again, this came as a relief. The program struck me as an eminently worthy idea. But the next amendment stopped us cold. Bob Dole and Russell Long, respectively the chairman and ranking member of the Senate Finance Committee, had prevailed upon Hatch to strike the 90 percent tax credit we had included for clinical trials of orphan drugs—a move intended to protect their bureaucratic turf, since tax policy ordinarily falls under the purview of the Finance Committee, through which the bill had not passed. We considered the tax credit to be the central feature of our bill, the mechanism by which government could finally persuade pharmaceutical makers to develop orphan drugs. In lieu of a tax credit, the Dole-Long amendment authorized a $50 million grant program, which, to the uninitiated, might seem a meaningless distinction. But Dole and Long understood the crucial difference: A tax credit can simply be written into law and take effect immediately, whereas a grant requires not only an authorization but an appropriation as well—that is, Congress not only had to authorize the money, but hand it over, too, which would entail a whole new legislative battle. Dole and Long knew that, on its own, a $50 million authorization wasn’t good for much, and by swapping it for the tax credit, they would effectively neuter the bill. The Senate’s unanimous approval of the Hatch-modified bill on October 1 made that fear a reality.
This meant that to have any chance of saving the bill, we would have to restore the tax credits and then send the updated measure back to the Senate for approval. Adding to the pressure was the impending adjournment sine die, the Latin term used in Congress to mean the end of a two-year session. If we could not repair and repass the orphan drug bill by year’s end, the session would expire and we would have to start from the beginning in the next Congress. So began the real negotiations that settled the Orphan Drug Act.
The narrow time frame confronting us necessitated joint House-Senate negotiations. Because so many committees now held a stake in the bill, my House colleagues and I had to contend with representatives from the Senate Finance, Ways and Means, and Labor and Human Resources committees—with Hatch still controlling the bill’s fate in the Senate; and the House Ways and Means Committee, which oversees most tax issues. Through most of October, our efforts to restore the tax credit didn’t get very far. Meanwhile, the calendar provided a grim daily reminder that time was running out.
There isn’t much that a House member can do to force a senator to act on a bill. But Jack Klugman hit upon a novel idea. He and his brother wrote a second episode of Quincy, which aired on October 27 and once again reflected events in Congress. This time the story line revolved around an orphan drug bill that was being held up by a heartless senator. In the show’s pivotal scene, the senator dismisses the need for orphan drugs, telling Klugman, “Nobody cares about this bill.” A righteous Klugman fires back, “Look outside.” Peering down from his office window, the senator sees a large crowd chanting and holding signs that read, “We Want the Orphan Drug Act.” To shoot the scene, the show’s producers hired five hundred people who really did suffer from rare diseases to serve as extras.
Arriving in the middle of these tense negotiations, the Quincy episode brought a new wave of public pressure for Congress to act. In the wake of the show, the talks picked up again, and a deal gradually emerged: The cost of clinical trials for orphan drugs would be subsidized by a 50 percent tax credit, a 50 percent tax deduction, and a much smaller $12 million grant program—the reduced tax credit and grant program face-saving measures for our opponents, who agreed to a very good deal for our side. On December 14, the updated bill passed the House; two days later—and this time, without any changes—it passed the Senate, too. As sine die arrived and members returned home for the holidays, what was now officially the Waxman-Hatch Orphan Drug Act moved on to the president.
EVEN AS THE HOUSE-SENATE NEGOTIATIONS GAINED MOMENTUM, ominous signs were emanating from the White House. In late fall, Richard Schweiker, Reagan’s secretary of health and human services, had called with a warning. “I want this bill, I think it’s great,” Schweiker told me. “But I’ve been told by the president to prepare the veto message.”
In an unfortunate irony, the White House opposition had nothing to do with the orphan drug component, but rather stemmed from Hatch’s cancer testing and screening program for those whose health had suffered from nuclear weapons testing. Reagan feared the program would leave the government culpable for thousands of cancer patients and exact an enormous toll on the federal budget. But since no president could utter anything so heartless in public, the White House claimed to object to the tax credits, whose cost the Congressional Budget Office had estimated at $15 million. Strange as it seemed to many of us, Reagan’s public stance had him willing to ignore the health needs of hundreds of thousands of sick people in order to save the budgetary equivalent of a drop in the ocean. Regardless, organizing an effort to change his mind became our immediate imperative.
Lobbying a president on legislation is not all that different than lobbying congressional colleagues, except that the president is much harder to reach. The goal is still to apply pressure in any way that you can. For this task, our Senate partner, Orrin Hatch, now bec
ame an invaluable ally. Along with being a Republican, Hatch was a forceful advocate who threw himself into the effort to persuade the White House.
The public nature of our campaign for orphan drugs also helped to lend pressure. One useful side effect of the action in Congress was that it led 140 rare-disease groups to band together as the National Organization for Rare Disorders. NORD took out full-page ads in major newspapers, including in California, where Reagan was spending the holidays, urging the president not to be “the Grinch who stole Christmas” by vetoing the bill.
I, too, tried to persuade the president, publicly and privately. To draw maximum attention, Jack Klugman, Adam Seligman, and I held a Christmas Eve press conference in Los Angeles where I delivered remarks designed to cast the issue against the backdrop of the holiday season: “Last week, years of effort to help people with rare diseases culminated with the unanimous passage by both houses of Congress of the Orphan Drug Act. I had hoped for this Los Angeles press conference to be a joyful celebration of the victory for which all the groups represented here today worked very hard. Unfortunately, it is my duty to tell you that the battle may not yet be over. I have been unable to obtain any reassurance from the White House that the president will sign this bill. Incredible as it may seem, there are reliable reports that even as we prepare to mark the Christmas holidays, the White House is preparing to kill this humanitarian legislation…. We need to write, call, and send telegrams to the White House. We also need to urge television stations, key news-oriented radio stations, and the press to give full coverage to this vital issue.”
The Waxman Report Page 7