58 69 Success of the European Orphan Medicines Regime.Fm

Cross-border Life Sciences 2003 The success of the European orphan medicines regime Peter Bogaert, Covington & Burling www.practicallaw.com/A27971 In April, 2000, a totally new European orphan medicines regime 2309/93 - entitles an applicant to obtain a marketing authorisa- came into effect. This was many years after adoption of a similar tion if the application complies with the requirements set out in incentive scheme in the US and examples in other countries, that legislation (see, for instance, the decision of 7th December, such as Japan. The rules are intended to provide incentives for 1993 of the ECJ in Pierrel SpA and others v Ministero della research and development of medicines intended for the Sanità, Case C-83/92). treatment, prevention or diagnosis of rare disorders that otherwise would not be pursued by industry in light of the limited Preparatory policy work carried out between 1993 and 1996 chances of return on investment. It is estimated that there are ultimately resulted in a formal Commission proposal for a between 5,000 and 8,000 such rare disorders in the world, the European orphan medicines regime in August 1996. Following a majority of which are of a genetic origin, and that up to 30 million highly efficient and constructive legislative procedure, on 16th people affected by one of these rare diseases live in the EU. December, 1999 the European Parliament and the Council adopted the basic text (Regulation No. 141/2000 of the The regime is intensively used by industry and overall is quite European Parliament and the Council of 16th December, 1999 successful, although it has not yet reached full maturity. Its on orphan medicinal products, OJ 2nd January, 2000, L18/1) success has also helped the thinking on other regulatory (the Regulation). It became applicable on 27th April, 2000, Cross-border incentive schemes, like a new paediatric exclusivity regime which when the first implementing Commission Regulation was currently is under review by the European Commission. adopted (Commission Regulation No 847/2000 of 27th April, 2000, Official Journal 28th April, 2000, L 103/5) (the This article examines: Implementing Regulation). ■ The background and status of the European orphan medi- Objectives. The objectives of the Regulation are: cines regime. ■ To establish an EU procedure for identifying medicines that ■ How orphan medicines are designated. are intended to treat, prevent or diagnose rare diseases (orphan medicines); and ■ Market exclusivity issues. ■ To provide for a EU wide ten-year market exclusivity incen- ■ Regulatory assistance for sponsors. tive to attract the necessary investment in research, development and marketing efforts. The market exclusivity is BACKGROUND intended to allow companies to charge higher prices, and thus to increase the chances of a proper return. The US adopted the Orphan Drug Act in 1983 with the intention of stimulating the development of medicines for treatment of rare The regime is not intended to be exclusive, and the Regulation diseases by means of tax credits and a seven-year market specifically invites the EU and the member states to provide for exclusivity for approved orphan medicines. The act has proven to additional orphan medicine incentives. be very effective, and over 220 orphan drugs have received approval. Legal status. Although the original intention was to prepare EC legislation in the form of a directive, the first preliminary draft Slowly, pressure developed for similar incentives in Europe, proposal released by the Commission was presented in the form which led to limited national measures. These included, for of a regulation, and that legal form was maintained in the final example, the procedure for exceptional temporary marketing version. The use of a regulation, which, in accordance with article authorisations in France (autorisations temporaires d’utilisation 249 of the EC Treaty, has direct effect in all the member states, or ATU) and administrative measures by the European Medicines is more efficient but it also means that the text cannot be further Evaluation Agency (EMEA) (accelerated review and partial or fine tuned at the stage of implementation into national law (as is total waiver of fees). often the case with a directive). The main incentive, however, in the form of market exclusivity, In addition, the Regulation is intended to provide an incentive for had to be adopted at EU level because EC pharmaceutical mainly innovative companies to commit substantial resources to legislation - in particular Directive 2001/83 (codifying a number the development of orphan medicines, and it is likely that in of earlier directives, including Directive 65/65) and Regulation several cases the commercial success of companies or joint This article was first published in the Global Counsel Life Sciences Industry Report 2003 and is reproduced with the kind permission of the publisher, Practical Law Company. For further information or to obtain copies please contact [email protected], or visit www.practicalllaw.com/lifesciences 58 GLOBAL COUNSEL HANDBOOKS www.practicallaw.com/lifesciences Life Sciences 2003 Cross-border venture projects will depend on the reliability of the exclusivity rights under the Regulation. It can therefore be expected that the terms of the Regulation will be the subject of litigation, although that does not yet seem to have occurred. Scope. The Regulation covers medicinal products for human use (as defined in article 1 of Directive 2001/83). Because orphan medicine status must be applied for before an application for a marketing authorisation is submitted, the regulation does not apply to products that were approved or for which an application for approval was pending before 27th April, 2000 (except for new orphan indications of an existing product (article 2.4(a), the Implementing Regulation)). During the legislative process, a proposal was made to allow products that were in the process of being approved to also benefit from the Regulation, but this was not accepted. Main provisions. The Regulation provides for: ■ Criteria and a procedure for designating orphan medicines. ■ A ten-year market exclusivity period (subject to revision after Cross-border six years). ■ Regulatory assistance to companies developing orphan med- GLOBAL COUNSEL HANDBOOKS www.practicallaw.com/lifesciences 59 Cross-border Life Sciences 2003 databases available in third countries, provided the appropri- ■ All cost and revenue data must be determined in accordance ate extrapolations are made. with generally accepted accounting practices and be certi- fied by a registered accountant in the EU. ■ Where a disease or condition has been considered within the framework of other Community activities on rare diseases, ■ Information on the prevalence and incidence in the EU of this information must be provided. In the case of diseases or the condition for which the medicinal product would be conditions included in projects financially supported by the administered at the time at which the application for desig- EU, a relevant extract from this information, including nation is submitted. details of the prevalence of the disease or condition in question, should be provided. The Implementing Regulation further defines “significant benefit” (of the proposed orphan medicine over existing The Commission guidelines also provide that when the proposed therapies) as “a clinically relevant advantage or a major contribu- therapeutic indication refers to a subset of a particular patient tion to patient care”, and requires the following information to be population, a justification of the medical plausibility of this submitted on existing therapies: population-sub-set should be provided. This aims to exclude “salami-slicing” of indications to fit the prevalence criterion. ■ Details of any existing diagnosis, prevention or treatment Additional general guidance is also contained in a guideline methods of the condition in question that have been author- issued by the Committee for Orphan Medicinal Products in March ised in the EU must be provided, making reference to scien- 2002 (COMP/436/01). tific and medical literature or other relevant information. These may include authorised medicinal products, medical devices or other methods of diagnosis, prevention or treat- The prevalence criterion is in practice clearly the preferred route ment which are used in the EU. for companies. The published summaries of designation opinions show that the prevalence of the diseases in question varies ■ Either a justification as to why the methods referred to above widely, for instance from about 750 non-ketotic hyperglyci- are not considered satisfactory or a justification for the naemia patients to 170,000 patients suffering from ulcerative assumption that the medicinal product for which designa- colitis. The maximum allowed is about 187,000 patients in the tion is sought will be of significant benefit to those affected Cross-border current Union of 15 member states. by the condition. For an application based on the return on investment criterion, Since the Regulation is intended to stimulate investment in new the information required includes among other things: products, the “significant benefit” criterion should not be applied too strictly. Before a decision to invest in a product is ■ Appropriate details on the condition intended to be treated made, only limited data will be available to demonstrate an and a justification of the life-threatening or seriously debili- expected significant

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