Addressing the Needs of Patients with Rare Diseases in Canada: An Evaluation of Orphan Drug Incentives

Abstract

While it is currently uncertain whether or not a Canadian orphan drug policy will be given further consideration any time in the near future, this thesis seeks to consider the potential impact that three different orphan drug incentives could be expected to have in Canada. Specifically, market exclusivity, priority review vouchers, and a tax credit for orphan drug development are evaluated. This thesis is primarily informed by the literature about how orphan drug incentives operate in the United States. Admittedly, there is controversy about whether orphan drug policies in their current form are justifiable. This controversy is discussed, with this thesis proceeding on the basis that morality and a commitment to equality validate providing some form of orphan drug incentive(s) in Canada. That being said, it is unclear how exactly “orphan drug” should be defined and, accordingly, what criteria should govern the allocation of incentives. Market exclusivity appears to be effective at encouraging investment in orphan drugs and therefore it is recommended that the incentive be implemented in Canada in order to encourage foreign drug companies to obtain market authorisation from Health Canada for orphan drugs. Priority review voucher programs are still in their infancy and, therefore, it is difficult to make any strong assertions about the effect and impact of these programs. It is nevertheless not recommended that vouchers be introduced in Canada because it is unlikely that priority review here will be sufficiently valuable to have an impact. An orphan drug-specific tax credit offers a convenient means of subsidizing orphan drug development without being expected to be overly costly, given the narrow parameters within which the credit would operate. Therefore, a Canadian tax credit for orphan drug development is also recommended.