Executive summary

1. Introduction

At present, some four to five thousands rare diseases (diseases which affect a limited part of the population) have been described in the world. Most of them do not have appropriate treatments, partly due to the lack of financial attractivity for the Pharmaceutical Industry. Patients feel rejected from the Health Care system. Therefore, a significant part of the population does not receive treatments that the medical progress should be able to provide in terms of quality and duration of.

The aim of this study is to provide the European Parliament with some policy options to set up an efficient European Orphan Drugs Policy.

2. Patients needs/epidemiology

According to World Health Organization’s estimates, around 5,000 rare diseases have been described on a world-wide scale. Taken as a whole, rare diseases are affecting a far from negligible part of developed countries’ populations.

Contrary to orphan diseases, tropical diseases are affecting millions of people, but as for rare diseases, they are not well treated, partly due of issues of economic profitability. Another acute problem in the developing countries is the distribution of safe and efficacious drugs.

Rare diseases affect a restricted number of people, hence the main criterion to identify a rare disease is the prevalence level. According to this parameter, lists of rare diseases have been established.

For the time being, it is within the marketing authorization procedure that some orphan drugs receive more or less specific support. But orphan drugs are not explicitly designated as such in the European.

Patients are waiting for safe, efficacious and cost-effective treatments for rare diseases. The lack of orphan drugs status in Europe lead patients affected by rare diseases to wait that the drugs already sold in the USA or in Japan, are available in their countries, or that a European company can develop such products. There is also a lack of information concerning rare diseases.

The question of paying for treatments is also a crucial issue, but as there is no harmonization between European health-care systems, financing is still a national issue which each Member State has to address.

3. Stakeholders’strategies

There are many medicines which could be developed and commercialised by pharmaceutical companies if there were some attractive incentives.

The research and development costs of a new drug have been growing for more than a decade. This increase is due to the growing use of costly research methods (high throughput screening, molecular modelling, combinatorial chemistry...) and the breadth and depth of clinical trials’ costs. Some analysts forecast that the cost of R&D for an international molecule may reach more than Euro 300 million on average in the near future.

Consequently, the Pharmaceutical Industry has focused its R&D efforts on diseases potentially affecting large population (i.e. gastric ulcers, myocardial infarctions, Alzheimer’s disease, diabetes...).

The development of an Orphan Drugs status will boost the supply of such drugs. As a result there could be some new companies fully dedicated to orphan drugs but their number is likely to be low (possibly less than ten in Europe).

Small biotechnology companies will also be able to develop new applications for their products.

Similar to the US situation, orphan drugs are likely to be developed in small and medium companies in Europe. The impact on employment will probably be an increase of the demand for highly qualified personnel.

The Pharmaceutical Industry is also seeking new ways to treat disease like cellular therapies, gene therapies... which could have a lot of applications in the orphan drugs sector. There will be also some interrelationship between the public research institutes and the pharmaceutical sector to develop new orphan drugs.

It is also important to keep strong R&D capabilities in Europe. The European capabilities will be valuable both for European patients and for the European pharmaceutical sector which will have to face a fierce competition in the near future. Stronger R&D capabilities will be an important asset in the pharmaceutical field in the near future.

The set up of a market exclusivity for orphan drugs is one of the primary incentives to be proposed to the pharmaceutical companies.

Protocole assistance may be needed by small and medium companies in order to make the registration of new orphan drugs easier for them. In Europe, it is clear that pharmaceutical companies will be more incline to develop orphan drugs as they receive fiscal incentives.

If we consider gene therapies, it is clear that a large part of the main current research programs are made through the biotechnology sector.

A large amount of new medicines will be available through biotechnology sectors partly because of their better research productivity and their dedication to high-tech compounds which are needed to treat rare diseases.

Other incentives are of great interest for biotechnology companies: industrial policy plans to boost biotechnology presence in Member States, status of public researchers to allow them to set up private companies, research tax credit, exceptional depreciation for manufacturing equipment, routine subsidies from the public organisms responsible for research and from various research institutes. In addition, biotechnology companies are also looking for structures and environment to facilitate their fund raising.

Patient associations have a strong role and are influential in the development of orphan drugs. They are very active in promoting orphan drugs status and fostering the emergence of new products.

They are also involved in setting up rare diseases lists, such NORD’s in the USA.

Many Patient Associations believe that information to patients is still a crucial issue in rare disease management. Basic knowledge about diseases, list of available drugs, list of specialists or consultants specialized in a given disease, are still not widely available.

Consumer associations should have more a consultative and observer’s role in the set up of an Orphan Drugs policy in Europe.

4. Legal framework

The legal framework in Australia, Japan, and in the USA is summarized below:

USA Japan Australia
Legal Framework Orphan Drug Act (1983) Notice of DG, PAB (1985) Orphan Drug Policy set up in 1997
Orphan Drug Regulation (1993) Orphan Drug Regulation (1993)
Administrations Food and Drug Administration (FDA)/Office of Orphan drug Ministry of Health and Welfare Development (MWH) Therapeutic Goods Administration (TGA)
Drugs fund for ADR Relief and Research Promotion
Beneficiaries Sponsor and investigator Sponsor Sponsor
Orphan drugs Status Prevalence: 0.75 per thousand Prevalence: 0.4 per thousand Prevalence: 0.1 per thousand
Marketing Exclusivity 7 years 10 years 5 years (pending ratification by jurisdiction)
R&D incentives 50% of clinical trials realized in the USA 6% on any kind of studies, limited to 10% of the company’s taxes R&D are not supported by grants or tax incentives
Fundings Phase I, II, III under $100 000 per year by donations during three years. Under 50% of R&D costs Fee waiver and possible market exclusivity for small companies
Phase II, III under $200 000 per year by donations during two years 3% of the companies’incomes distributed to raise funds
Files reexamination No Yes A 12 months’ review is to be done in January 1999
Number of designated orphan drugs 890 113 + 5 medical devices 15 applications, 11 of which have been designated.
These drugs are under evaluation
Number of orphan drugs marketing authorizations 173 36 + 2 medical devices 0
Number of companies involved in orphan drugs providing (which have already launched one orphan drug or more) 92 (including institutes and universities) 28                                     
Number of patients eligible to treatments 6.5 millions                                                              


5. Policy options

The proposed European Regulation contains the following topics:

6. Recommendations

The extension of orphan drugs status to tropical diseases’ treatments will help make new treatments available for the third world with a better cost/effectiveness ratio.

Annex: Bibliography

Pharma, Therapeutic Product Development, 1994

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