By Chloe Sheppard, Analyst
The European Commission is imminently expected to publish a report evaluating the pros and cons of the EU Orphan and Paediatric Legislation introduced 20 years ago. The regulation has so far had success towards its primary goal to incentivise the development of orphan medicinal products (OMPs) for patients living with rare conditions, as the number of EMA-approved OMPs has increased substantially. However, policymakers are concerned about some of the unintended effects of the incentives, particularly the increasing healthcare expenditure on orphan drugs, which has led to the regulation being called into question. The pharmaceutical industry will need to remain dynamic and prepared in the coming months and years should Orphan Drug Legislation change.
Orphan drug approvals have boomed
Rare diseases, by EU definition, are those which affect less than 5 in 10,000 people. Orphan drugs developed to treat rare diseases were previously unattractive development opportunities for manufacturers, as the small patient populations mean that it can be difficult to make sufficient return on investment. Furthermore, challenges with developing orphan drugs include clinical trial recruitment, again due to the small patient numbers, and the use of patient- and disease- relevant endpoints, as often the natural history of rare diseases is not well understood.
For the 30 million patients in Europe affected by rare diseases, there is a significant lack of treatment options for these frequently debilitating and life-threatening conditions, which is why the Orphan Drug Legislation offers several incentives to manufacturers. These benefits include fee reductions for regulatory activities, research grants, market exclusivity for OMPs for 10 years following EMA approval, and scientific advice on how to generate robust evidence for OMPs.
When the Orphan Drug Legislation of 2000 was introduced in Europe there were just 8 therapies licensed to treat orphan conditions. Today’s EU orphan drug market looks very different, with 169 approved OMPs which have brought overall substantial clinical benefits to rare disease patients, reflecting the success of the incentives in fostering the development of treatments for rare indications.
The affordability and access problem
The re-evaluation of orphan drug legislation is part of a broader roadmap proposed by the European Commission (EC) outlining the Pharmaceutical Strategy for Europe, which aims to tackle the affordability, access, and availability of medicines and boost the competitiveness of the industry in Europe. The ongoing debate surrounding the high costs of innovative medicines, and the coronavirus pandemic which has sparked sustainability concerns for healthcare systems, has been a likely driving force for mapping a plan to address these issues.
There are likely three key drivers for the European Commission revisiting OMP incentives:
- The exponential rise in expenditure on orphan drugs over the past two decades. Across the EU5, Belgium, Austria, and Ireland, OMP share of total pharmaceutical expenditure has increased each year since 2000, rising to 7.2% of total pharmaceutical expenditure in 2017
- The high prices commanded by orphan drugs have sparked debate about whether these prices are excessive or justified based on their value
- Disparities in access to OMPs across Europe are commonplace as reimbursement decisions lie with the individual countries. The process by which HTA agencies evaluate medicines varies between countries, leading to different outcomes of HTA assessments for the same drug
Preliminary findings from the European Commission’s evaluation
The official evaluation of the pros and cons of the Orphan Drug Legislation is expected to be published shortly. Proposed changes to the OMP regulation itself, if any, would be made taking into account the findings of the report, and would take several months, likely years, to come into effect.
Although the official report from the EC is yet to be published, preliminary findings were shared during a Pharmaceutical Committee meeting in March 2020. The Commission estimates that only 18-24 (12-16%) of the 142 OMPs approved between 2001 and 2016 are attributable to the policy. Hence, the other 84% of these drugs would have been introduced regardless of the OMP regulation, in part due to their availability in the US. In addition, the EC estimates that only 28% of orphan drugs are indicated for diseases that have no alternative treatment options, sparking concerns that over time the regulation has been less effective in directing research towards therapeutic areas of greatest unmet need.
The opportunity for pharma
While it may be necessary to rethink some of the incentives to align with the status of the OMP market, the essentiality of the regulation to future orphan drug development cannot be overlooked. For the pharmaceutical industry, now is an opportune moment to highlight that solving the equation which allows rapid access to orphan medicines for patients, at a fair price for healthcare systems and to recoup development costs for manufacturers, cannot be easily addressed by removing OMP development incentives.
Improving the access, affordability, and availability of OMPs across Europe, while continuing to reward innovation in rare disease research, requires a cooperative effort from policymakers, payers, and industry. Working to more readily adopt tools such as real-world data and innovative payment models offers other ways to create a sustainable orphan drug environment. This can be done while providing the necessary research and development incentives to ensure healthcare systems can continue to discover and develop innovative treatment options for rare disease patients.
Pharmaceutical manufacturers will be best placed to succeed in future orphan drug launches if they:
- Do not assume orphan drugs will continue to have “special status”
- Remain open to explore innovative approaches to pricing and access, such as innovative payment models
- Continue to engage in an open dialogue with regulators and payers at an early stage in product development
The large increase in orphan drug approvals is hugely positive, however, there remains 95% of patients with rare diseases for which there are no treatment options available. Industry can hope that the European Commission, with a shared responsibility to ensure patients can access treatments for their rare conditions, will recognise the importance of maintaining the incentives of the Orphan Drug Legislation for future OMP development.
Image source: https://pixabay.com/photos/brussels-europe-flag-4056171/