The European Commission is consulting on a proposed Notice to update and replace its Communication (2003/C 178/02) on the interpretation of the Orphan Regulation which regulates and provides incentives for the research, development and marketing of medicines for rare diseases. 

The Notice proposes to streamline the available guidance on the interpretation of the Orphan Regulation (141/2000) in light of: the experience gained through 15 years of orphan regulations; the advances of technology; and the heightened risks to public health through increased globalisation.

The proposals include guidance on how sponsors should demonstrate that their products bring a “significant benefit” over existing satisfactory methods of diagnosis, prevention or treatment. This is often a key hurdle to sponsors which may be raised higher following the proposal to remove “increased supply of the product” as grounds for demonstrating a significant benefit. It has also been suggested by some Member States that products prepared in hospital pharmacies should also be considered in the assessment of significant benefit which could, in some cases, raise the hurdle yet higher. The latter proposal is likely to meet strong resistance from some stakeholders and is likely to create significant practical challenges to the assessment process if it were to require investigations across the EU at a hospital pharmacy level.

Conversely, the Notice proposes to allow more flexibility in the assessment of significant benefit in the scenario where two orphan designated products are being considered for marketing authorisation (“MA”) in parallel and where, due to the timing of these applications, it is difficult for the two products to demonstrate significant benefit over each other.

The assessment of the orphan designation criteria is proposed to be tightened in situations where the MA holder of an existing orphan designated medicinal product (“OMP”) extends the MA to a new sub-set therapeutic indication within the same orphan condition. By ensuring that the new sub-set therapeutic indication also satisfies the significant benefit assessment, this proposal appears to be trying to create a more level playing field between the existing MA holder and any potential new entrant looking to obtain its own MA for the new sub-set therapeutic indication. The Notice also proposes to close a potential loophole by restricting the practice of transferring orphan designations between companies in order to circumvent the prohibition on obtaining an orphan designation after obtaining an MA for that medicinal product.  

In the wake of the avian influenza and ebola virus epidemics, the Notice aims to encourage the development of medicines for communicable diseases by relaxing the Commission’s strict interpretation of the so-called prevalence criterion. This criterion requires the medical condition in question to affect ‘not more than’ five in 10,000 people in the EU in order to limit orphan designations to rare diseases (in most cases). The Commission had previously interpreted this criterion to require a prevalence greater than zero. However, in future, the Commission may consider a risk-based approach and permit orphan designation of certain medicinal products for communicable diseases with a prevalence of zero. The ten-year market exclusivity afforded to OMPs has proved to be a particularly powerful incentive for industry, and it is hoped that this incentive will stimulate the research and development of medicines for communicable diseases which do not currently affect any individuals in the EU, but that pose a significant risk to public health - due in part to increased globalisation.

Interestingly, the Notice does not propose to reproduce the guidelines contained in section D of the Communication relating to market exclusivity (Article 8 of the Orphan Regulation). Whilst some of this guidance has already been superseded, section D(5) will apparently be removed without replacement. Notably, it was this section which was thrown into question last year by the Teva Pharma BV v EMA case (T-140/12).

Under section D(5), if an OMP enjoys market exclusivity and a second sponsor is successful in demonstrating that its similar product for the same indication is safer, more effective or clinically superior (i.e. the Article 8(3)(c) derogation), the second product will be eligible for orphan designation and will share the market exclusivity with the first product for the remaining duration of the ten-year period of market exclusivity. However, in Teva, the Court held that a second product should obtain a full period of market exclusivity after application of the Article 8(3)(a) consent derogation. The Court explained that orphan market exclusivity had to be granted in all cases in which an orphan product had been given marketing authorisation in order to attain the objective pursued by the Orphan Regulation. The proposed removal of section D(5) by the Notice would therefore bring the guidelines into greater alignment with the judgment in Teva – a positive step for the development of orphan drugs.

Nevertheless, the Commission’s decision not to actively update its market exclusivity guidance could be a missed opportunity. For example, clarity is needed on the availability of the two-year paediatric extension for market exclusivity where sponsors voluntarily conduct a paediatric investigation plan (“PIP”) for OMPs. The author understands that, contrary to its original position, the Commission now considers that the two-year paediatric extension should be available for voluntary PIPs in OMPs. This was the position taken by the Commission in respect of Shire’s product, Xagrid, and this would be a good opportunity for the Commission to publish this position in the form of guidance.

In the round, the proposal for a new Notice is welcome and it is hoped that this will bring greater clarity to the interpretation of the Orphan Regulation in a number of key areas. However, the Commission should take the opportunity to revisit all of its guidelines including those relating to orphan market exclusivity.

The proposed Notice is available here, interested parties should submit their responses by 15 February 2016