The significant financial investment required for the research and development of a new medicine means that, in normal market conditions, there is generally insufficient commercial incentive for pharmaceutical companies to develop drugs intended for use by only small numbers of patients.
It is estimated that between 5,000 and 8,000 distinct rare diseases exist, affecting between 6% and 8% of the total population. In the EU this amounts to approximately 30m people suffering from rare diseases.
To encourage the research and development of medicines for rare diseases, known as “orphan” drugs, the EU regulatory framework offers a number incentives where a medicine meets certain criteria. If an organisation wishes to obtain such incentives, it must apply directly to the European Medicines Agency (EMA) for orphan designation.
Criteria for orphan designation
To qualify for orphan designation, a medicine must be intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition. There must also be no existing satisfactory method of diagnosis, prevention or treatment for the relevant condition or, if there is, the new medicine must be of significant benefit over current methods.
In addition, the medicine must meet either the “prevalence” or the “insufficient return on investment” criterion. These are as follows:
The applicant must show that the condition the medicine is intended for affects no more than five in 10,000 people in the EU when the application is made.
Insufficient return on investment
The applicant must show that, without incentives, it is unlikely that the marketing of the medicine in the EU would generate sufficient return to justify the necessary investment.
Incentives for orphan designation
Ten-year market exclusivity
Once marketing authorisation (MA) is granted for an orphan designated medicine, it will benefit from market exclusivity in the EU for ten years in respect of the particular indication. During this period, no other marketing authorisation will be issued for the same therapeutic indication in respect of a "similar medicinal product" unless:
- the MA holder for the original orphan medicinal product gives consent to the second applicant;
- the MA holder for the original orphan medicinal product is unable to supply sufficient quantities of the medicinal product; or
- the second applicant can establish that the second medicinal product is safer, more effective or otherwise clinically superior to the orphan medicinal product.
Centralised authorisation procedure access
MA assessments for all designated orphan medicines are carried out centrally in the EU, allowing companies to make a single application to the EMA. The resulting decision from the European Commission is valid in all EU member states.
During the product development phase, orphan designation entitles the holder to ask for scientific advice on the conduct of the various tests and trials necessary to demonstrate the quality, safety and efficacy of the product.
Companies applying for regulatory approval in respect of a designated orphan medicine will pay reduced fees for protocol assistance, MA applications, pre-authorisation inspections, and renewals.
Additional incentives for SMEs
Small and medium-sized enterprises (SMEs) benefit from further incentives when developing orphan medicinal products, including administrative/procedural assistance and fee reductions.
Orphan medicines in the UK post-Brexit
The EMA has confirmed that, following the end of the Brexit transition period on 31 December 2020, each sponsor of an orphan medicine (i.e. the company that funded the drug’s research and development, and applied for the orphan designation incentives) in the UK will need to be replaced with a sponsor established in one of the remaining countries of the EEA.
From 1 January 2021, the MHRA will be responsible for orphan medicines designation in the UK. Under this national regime, qualifying medicines will need to meet broadly the same criteria as those under the EMA framework.
European Medicines Agency, 'Orphan Designation: Overview' (Human Regulatory) <https://www.ema.europa.eu/en/human-regulatory/overview/orphan-designation-overview> accessed 7 December 2020.