Key Takeaways
- The Consolidated Appropriations Act of 2026 reauthorizes the Rare Pediatric Disease Priority Review Voucher (PRV) program through September 2029, restoring a key incentive to develop therapies for rare pediatric diseases.
- The legislation also amends the Orphan Drug Act to clarify that orphan drug exclusivity applies to the U.S. Food and Drug Administration’s (FDA) same approved use or indication within a rare disease, rather than the entire rare disease or condition. The change abrogates the U.S. Court of Appeals for the Eleventh Circuit’s decision in Catalyst v. Becerra and aligns the statutory text with the FDA’s longstanding interpretation.
On February 3, 2026, the President signed the Consolidated Appropriations Act of 2026 (the CAA) into law and ended a partial government shutdown.1 The Act included two changes that directly affect pharmaceutical development: the reauthorization of the Rare Pediatric Disease Priority Review Voucher (PRV) program and an amendment to the scope of orphan drug exclusivity. Both were requested by the FDA.
The CAA included the Mikaela Naylon Give Kids a Chance Act that reauthorizes the Rare Pediatric Disease PRV program.2 Under the PRV program, a sponsor that obtains approval of a new drug or biologic to treat a rare pediatric disease can obtain a transferable voucher for priority review of a subsequent application.3 The voucher reduces FDA review time for that application from 10 months to about six months. Because the vouchers are transferable, they are sold at rates of over $100 million.
The PRV program provides an important financial incentive to develop new treatments for rare pediatric diseases, but it must be reauthorized every few years. The program sunsetted on December 20, 2024, and the FDA could not designate new products as eligible for PRV vouchers after that date.4 The CAA allows the program to resume and reauthorizes designations until September 30, 2029.5
The CAA also clarifies the scope of orphan drug exclusivity. Orphan drug exclusivity incentivizes new drugs and biologics that treat rare diseases and conditions.6 The exclusivity provides a seven-year delay before the FDA can approve a competing drug that treats the same rare disease or condition, allowing the manufacturer to recoup the development costs of a product that may not be financially viable without it.
In the 2021 case Catalyst Pharmaceuticals, Inc. v. Becerra,7 the U.S. Court of Appeals for the Eleventh Circuit held that orphan drug exclusivity bars approval of “the same drug for the same disease or condition,” including all subindications and subpopulations of that condition.8 As a result, the circuit court found that the FDA’s approval of amifampridine to treat adult Lambert-Eaton Myasthenic Syndrome (LEMS) blocked its subsequent approval of the same drug to treat pediatric LEMS and vacated the pediatric approval.9
The FDA set aside the challenged approval but otherwise refused to follow the Catalyst decision.10 The circuit court’s broad interpretation of the orphan drug exclusivity bar conflicted with the agency’s narrower interpretation and adopting it would have significantly limited the number of products that the FDA could approve to treat rare diseases.
The CAA resolves the dispute in the FDA’s favor. The Act changes the scope of orphan drug exclusivity from blocking approval of “the same drug for the same disease or condition” to blocking approval of “the same drug for the same approved use or indication within such rare disease or condition.”11
This change codifies the FDA’s longstanding interpretation of the Orphan Drug Act and allows the agency to approve multiple versions of the same orphan drug for different subindications and subpopulations, such as adult and pediatric patients or multiple variations of the same disease that are caused by different genetic variants. The amendment also applies retroactively, regardless of when the FDA designated or approved the drug.
For drug and biologic sponsors, these changes in the CAA restore two important incentives for rare disease development.
For additional information concerning the PRV program, orphan drug exclusivity, or other FDA programs and FDA regulatory strategies, please contact Wilson Sonsini attorneys Eva F. Yin or Daniel E. Orr.
[1] Consolidated Appropriations Act (CAA), 2026, Pub. L. No. 119-75 (2026).
[5] CAA, note 1 above, at § 6604(a).
[7] Catalyst Pharms., Inc. v. Becerra, 14 F.4th 1299 (11th Cir. 2021).
[10] FDA, Clarification of Orphan-Drug Exclusivity Following Catalyst Pharms., Inc. v. Becerra; Notification, 88 Fed. Reg. 4086 (Jan. 24, 2023).
