Congress Narrows Orphan Drug Exclusivity After FDA Court Losses

Congress enacted the Consolidated Appropriations Act of 2026 last week, narrowing the scope of statutory protection for drugs for rare diseases and conditions under the Orphan Drug Act, 21 U.S. Code § 360cc. The legislation overrides a federal court ruling and aligns the statute with the FDA's longstanding approach to orphan drug exclusivity.

The Orphan Drug Act provides a 7-year period of market exclusivity for drugs designed to treat certain rare diseases or conditions, specifically diseases or conditions impacting fewer than 200,000 patients in the United States. The Act creates an incentive for pharmaceutical companies to develop treatments for rare diseases that might otherwise be ignored.

The FDA has traditionally tied orphan-drug exclusivity to only the use or indication for which the drug product was approved. However, in Catalyst Pharms., Inc. v. Becerra, the 11th Circuit held that orphan-drug exclusivity applies to the entire disease or condition, regardless of the scope of the drug product's approved use or indication. 14 F.4th 1299 (11th Cir. 2021).

The FDA agreed to comply with the court's order with respect to the particular drugs at issue in Catalyst but announced its intention "to continue to apply its regulations tying the scope of orphan-drug exclusivity to the uses or indications for which a drug is approved to matters beyond the scope of that order."

Congress's recent legislation amends the statute to override the 11th Circuit's holding, bringing the Orphan Drug Act in line with the FDA's longstanding approach. Congress replaced the statute's language of "same disease or condition" with the new language of "same approved use or indication within such rare disease or condition."

Under the amended statute, the Secretary may not approve another application under section 355 of this title or issue another license under section 262 of title 42 for the same drug for the same approved use or indication within such rare disease or condition for a person who is not the holder of such approved application or of such license until the expiration of seven years from the date of the approval of the approved application or the issuance of the license.

The newly narrowed scope of the Orphan Drug Act is notable for pharmaceutical companies seeking to market generic drugs. Regulatory exclusivity is a powerful tool for brand companies, but the Consolidated Appropriations Act of 2026 may open the door for generic companies seeking approval for uses or indications that differ from those of the original orphan drug. Although this likely will not change the FDA's approach, generic companies may no longer need to consider the possibility of a Catalyst-style suit.