About Orphan Drugs

Definition of orphan drugs

The so-called "orphan drugs" are intended to treat diseases so rare that sponsors are reluctant to develop them under usual marketing conditions.

The process going from the discovery of a new molecule to its marketing is long (10 years in average), expensive (several tens of millions of euros) and very uncertain (among ten molecules tested, only one may have a therapeutic effect). Developing a drug intended to treat a rare disease does not allow the recovery of the capital invested for its research.

Orphan drugs may be defined as :

drugs that are not developed by the pharmaceutical industry for economic reasons but which respond to public health need

Actually, the indications of a drug may also be considered as " orphan " since a substance may be used in the treatment of a frequent disease but may have not been developed for another rarer indication.

In fact, three cases may arise:

These products are developed to treat patients suffering from very serious diseases for which no treatment, or at least a satisfactory one, has been available yet. These diseases affect only a small proportion of the population (less than one person per 2,000 in Europe), most often at birth or in infancy. The number of rare diseases for which no treatment is currently available is estimated to be between 4,000 and 5,000 worldwide. Twenty-five to 30 million people are reported to be concerned by these diseases in Europe.

For example, thalidomide was much used as a hypnotic drug some years ago and was then withdrawn from the market when its high teratogenic (triggering foetal malformations) hazard was discovered. However this drug showed very interesting analgesic proprieties in diseases such as leprosy or lupus erythematosus. They are diseases for which no satisfactory treatment has been available.

• either because they are derived from a research process that cannot be patented
• or because they concern important markets which are, however, not creditworthy (see the text Orphan Drugs in Third-World Countries .)

Patients affected by rare diseases have to be informed about scientific and therapeutic progress. They have the same rights to care as any other patient. In order to stimulate research and development in the sector of orphan drugs, the authorities have implemented incentives for health and biotechnology industries. It started as soon as 1983 in the United States with the adoption of the Orphan Drug Act, then in Japan and in Australia in 1993 and 1997. Europe followed in 1999 by implementing a common EU policy on orphan drugs.

Efforts have been jointly made at national and European levels by industrials and health authorities (EMEA or European Medicines Evaluation Agency), in order to offer the incentives required to stimulate the development of orphan drugs. The goal was to rapidly make available, for rare diseases, drugs with a level of quality equivalent to that required for any other drug.

A policy was implemented much later in Europe than in the USA. The reason lies mainly in the fact that its territory is split-up and its competencies as regard to health are scattered.

Since 1 January 1995, with the new system of EU marketing authorization that is valid for the whole territory and the free circulation that goes with it, Europe can be considered now as a territory with a population of about 377 million inhabitants, that is a population superior to that of the United States where a common regulation is enforced.

On 16 December 1999, the European Parliament and the Council adopted the regulation (CE) N° 141/2000 on orphan drugs.

It was largely inspired by the US regulation and its goals were to:

• incite the pharmaceutical and biotechnological industry to develop and market orphan drugs;
• create a Committee of Orphan Medicinal Products (COMP) instituted within the European Medicines Evaluation Agency (EMEA). This committee is responsible for studying the applications for designation and to advise and assist the Commission in discussions on orphan drugs.

In addition, the Commission adopted the regulation (CE) N° 847/2000 of 27 April 2000 establishing the provisions of application of criteria for orphan designation and defining the concepts of "similar medicinal product" and "clinical superiority".

According to the European regulation n° 141/2000, only drugs for human use can be designated as « orphan drugs».Therefore it does not concern veterinary medicines, medical devices, nutritional supplements and dietary products.

Drugs designated as orphan are entered in the Community register for Orphan Medicinal Products .

The current objectives of the European authorities are to:

• incite the pharmaceutical and biotechnological industry to carry out research on and development of orphan drugs
• have competent small and medium-size enterprises participate into this development in special sectors
• in parallel, increase the knowledge on these diseases, their environment, improve communication and cross-border collaboration between the various research centres, the institutions, the patients, etc..

Availability of orphan drugs in Europe

The grant of a marketing approval does not mean the drug is available throughout the 25 European countries. The marketing approval holder must before decide on its commercialization status within every country and the drug will then go through numerous steps in each country in order to condition its management, and usually its price.

Drugs, which are exclusively used in hospitals, are, following positive mention of the Commission, registered on the list of admitted products for the community. Their price is free.

Despite joint efforts,the heterogeneous approaches among countries make the patients access to orphan drugs more complex.

Early access to a drug for patients may be possible before its marketing authorization is granted to the pharmaceutical industry that develops it, most often during the third phase of the clinical trial and when its safety and efficacy is strongly assumed. Two cases may arise:

• an application for marketing approval has either been or is about to be submitted by the pharmaceutical company developing the drug in the country concerned. Then the company submits a temporary regulatory approval to the administrative authority for a group of patients (a cohort ATU in France and in Italy, or compassionate use authorization in the other European countries) that is valid for a limited time span in the country considered.
• or the physician asks the administrative authorities for a nominative temporary regulatory approval that is valid for a specific patient and for a limited time span in the considered country. Due to differences in legislation, facility and rapidity of access to orphan drugs is not the same in the 15 European countries, as indicated in the chart below:

Abbreviations: UC: Compassionate Use NP: Nominative Base of Patients TUA: Temporary Use Authorization Sources: EMEA, London.

Orphan drugs in the United States of America

As soon as 1983, the Public Health authorities realized that legislation on orphan drugs was needed with the signing of the "Orphan Drug Act".
This law defines the " orphan drug " with regard to prevalence (frequency) of the disease for which it is indicated in the American population. In the US, the concept of "orphan drug" does not simply cover pharmaceutical or biological products. It also covers medical devices and dietary or diet products. The OOPD (Office of Orphan Products Development) was created within the FDA (Food and Drug Administration). It is in charge of promoting the availability of safe and efficacious products for the treatment of rare diseases. The " orphan " status allows the drug sponsor to benefit from incentives for the development of these products until the marketing approval. These measures apply to all stages of the drug development.

• research: tax credits on clinical research;
• elaboration of an application file necessary for marketing approval: technical assistance during the elaboration of the file as well as simplification of administrative procedures (reduction of the waiting period and reduction of the amount of registration fees);
• marketing: exclusivity of 7 years after the marketing approval is granted. For further information, you can go and see the text on Orphan Drugs in the US or consult the list of the American orphan drugs .

Public policy on orphan drugs in the USA
The legal status of Orphan drugs in the USA dates back to 4 January 1983 with the passing of a law called the Orphan Drug Act:
"Orphan drugs are used in diseases or circumstances which occur so infrequently in the USA, that there is no reasonable expectation that the cost of developing and making available in the USA a drug for such disease or condition will be recovered from sales in the USA for such drugs."
Several amendments were subsequently passed, aiming at defining the criteria Orphan drugs must meet :

A 1984 amendment defined the concepts of low incidence :
A rare disease or circumstance by definition:

• Affects less than 200 000 individuals in the USA
• Affects more than 200 000 individuals in the USA without it being possible to cover the cost of development and distribution by sales on national territory.

The 1992 amendment:
If the drug is theoretically similar to an orphan drug authorized for the same rare disease, the applicant must demonstrate the clinical superiority of this drug, which is then considered in the same way as a new active ingredient. The efficacy of the drug must be established with regard to prevention, diagnosis, or treatment of this disease.
More than one sponsor can receive designation for the same drug for the same use; the seven-year marketing exclusivity is given to the first sponsor to file a complete NDA . Competitors are not prevented from making the drug available for different uses during the seven-year period of exclusivity.
Six and a half million patients are eligible for treatment by orphan drugs in the USA.

Orphan drugs’ labelling and legal status

Orphan drugs are covered by a specific individual legal system endowing them with a special status. Granting orphan drug status is based upon an application dossier submitted to the Office of Orphan Products and Development (OOPD) , including:

• Standard administrative data (name and address of the sponsor, name and address of the manufacturer, international non-proprietary name of the drug, trade name of the drug).
• A description of the disease for which use of the drug is claimed and the intended conditions of use.
• The authorization given by the sponsor to the FDA to publish information concerning the product and the recognized indication.
• The size and other chief characteristics of the population likely to be treated in the USA: all available information, published or otherwise available, must be supplied.
• A description of the drug and its risk/benefit ratio. A summary of the principal preclinical and clinical data concerning use of the product in the claimed indication as well as basic documentation.
• The estimate of the cost of development and distribution of the drug as well as an assessment of potential sales in the USA, confirming the absence of commercial viability of marketing the drug in specific cases.

The FDA is required to provide an answer to the sponsor within a maximum of 60 days after receiving the application. When the drug is designated as " orphan ", the FDA publishes this information in the Federal register Orphan designation and marketing authorization application are two necessary stages before an orphan drug can be marketed. Each decision is taken by a special entity at the FDA.

Once orphan designation is granted, the TGA waives the evaluation fees, thus removing a major impediment to make these crucial drugs available. A distinct evaluation pathway for processing orphan drugs is also set up.
One of the programme's important purposes is the possibility to make drugs available to treat leprosy and trachoma, which affect the aboriginals.
The main characteristic of the Australian Program is that it is based upon a close collaboration of the TGA with the US FDA. The Australian programme takes into account the FDA's orphan drugs evaluations. Additional criteria are also established for identifying and evaluating orphan drugs in Australia, which have not been evaluated in the USA or do not meet the US criteria.
The main characteristics of the orphan drug policy in Australia are:

• A legal framework for orphan drug designation
• Waiver of application and evaluation and no annual registration fees
• A five-year exclusivity (under consideration by the Australian jurisdiction)

Regarding the funding of orphan drugs, TGA covers all the costs of the orphan drug designation process, and then balances its expenditures with other components of the health care system overall budget.
The health-care financing system in Australia may be an issue in the delivery of orphan drugs to patients. In fact, the cost of orphan drugs may prevent some patients using them. Australia has a Pharmaceutical Benefits Scheme, which provides subsidies to make some drugs affordable. The place of orphan drugs in such a scheme is under discussion between the Australian Health-care Authorities decision-makers.
In Australia, R&D is not supported by grants or tax incentives. There is no specific law concerning intellectual property for orphan drugs. The legal status is applied to orphan drugs as for any other drug registered for supply in Australia. On the other hand, registration fees are covered by the Therapeutic Goods Administration.

Orphan drugs in Singapore

The orphan drugs policy in Singapore is based upon a Medicine Order ("Orphan drugs Exemption"). The legislation, which came into force at the end of 1991, gave a definition of orphan drugs and of the legal framework for imports in Singapore.
A rare disease is defined as a life threatening and severely debilitating illness.
An orphan drug is a medicinal product, which has been identified by any doctor or dentist as an appropriate and essential remedy with no effective substitute for the treatment of a rare disease.
The product should not hold a previous product license under the Medicine Act and should be approved by the competent Health Authorities either from the country of origin or from any other country where the orphan drug has been used
Orphan drugs importers must maintain proper records, including:

The quantity imported or supplied

The date of reception or supply

The name and address of the person for whom the orphan drug is provided

In addition, any other drug imported shall be kept in a hospital and be under the charge and control of a "custodian" who must be a physician, dentist or pharmacist appointed by the hospital.
Any doctor or dentist who requires an orphan drug for the treatment of his/her patient who is suffering from a rare disease may request the custodian to provide him with the drug.
So far, there has been no other incentive, such as marketing exclusivity or subsidies in the orphan drug policy.

Comparison of the various policies on orphan drugs worldwide

Many vaccines are intended to prevent infections that are rare or of limited importance (found in a limited geographic area with however a very high number of cases in this region). To develop these vaccines, money has to be invested and may not be recovered by the sales of the product. Such products are a precarious venture for the pharmaceutical company that is about to market them ... that most would hesitate to pursue. As these drugs are neglected by the pharmaceutical industry, they are called « orphan drugs ». Several obstacles have to be faced before developing vaccines: 1- the increasing cost of Research and Development projects (especially for a vaccine); 2- a complex legislative and regulatory environment for drugs; 3- the obsession to streamline and optimize the product portfolio of each pharmaceutical company.

• The prices of vaccines

Contrary to what is usually thought, the number of sales of vaccines is not directly linked to the extent of the epidemic (number of subjects that may be immunized), but rather to the cost of the vaccine dose. The price of the vaccine must be calculated by minimizing the Research and Development, production, marketing and distribution costs in order to break into a limited market. It is almost impossible to make "economies of scale" when manufacturing the product. Economic models of vaccines have shown an inverse relationship between the number of doses manufactured and the cost per dose of the vaccine. A tiered pricing strategy has been endorsed by the World Health Organization (WHO), in which high-cost but low-volume vaccines in industrialized countries could subsidize the low cost and larger volume of sales in developing countries. Unfortunately, this may not be feasible if the quantity of vaccines needed in developing countries is low.

• Product viability as regard to patent protection

Development of new drugs relies heavily on the respect of intellectual property rights, represented by the patent, reassuring investors that drugs will provide a fair return on invested funds. The lack of patent protection or legal framework for intellectual property rights in some developing countries prevents the long-term viability of a vaccine.

• In Third-World countries

It is difficult to develop new vaccines in these countries, for they prefer to ensure optimum use of vaccines already existing. These vaccines are considered as priority vaccines. Within the framework of WHO, the Children's Vaccine Initiative (CVI), set the development of vaccines with commercial prospects as a priority. This cost-oriented definition reflects mainly the difficulty of developing drugs for tropical diseases, even the most prevalent ones such as malaria. Other noneconomic factors could justify an industry's decision to develop and market an orphan vaccine:

• the will to enhance the company's ethical profile, by fulfilling a medical or social need;
• the capacity to develop, product and market a drug; - a larger company strategy (e.g., extension of a product range).
• Development strategy of orphan drugs

The pharmaceutical industry must:

1. Have a high capacity of Research and Development
2. Master the technology of patents
3. Identify the poorest countries and those that need the vaccine, in order to create financing systems for a low price of the vaccine.

No trade-off on the quality of an orphan vaccine can be accepted. For the pharmaceutical industry, the costs incurred in development, tight quality controls, establishment of industrial good manufacturing practices for an orphan vaccine are similar to those for a traditional vaccine.

For all these reasons, the development of any orphan vaccine must be broadly supported by measures to increase the awareness of immunization benefits at three levels:

• the decision-makers
• the caregivers
• the patients.

• How to improve the availability of orphan vaccines?

"Life is not saved by a vaccine but by immunization". Even when the vaccines exist, they must be available to the target population. Strategic propositions for the development and marketing of orphan vaccines are summed-up in the chart below:

Solutions and proposals for accelerating orphan vaccine availability:

ICH, International Conference on Harmonization; CVI, Children's Vaccine Initiative; WHO, World Health Organization; UNICEF, United Nation's Children's Fund; PAHO, PanAmerican Health Organization; WB, World Bank; USAID, U.S. Agency for International Development; NIH, National Institutes of Health; CDC, Centres for Disease Control and Prevention; PATH, Program for Appropriate Technology in health; EPI, Expanded Program of Immunization. The obstacles to the development of orphan vaccines reveal the importance of political issues such as the cost and quality of care, the access to it, the government's role in market regulation. Implementing a common policy on orphan drugs worldwide will only be possible if a strong intergovernmental organization is promoted.
This organization would be charge of:

• making a list of priority orphan vaccines;
• following the stages of vaccine development and having at its disposal funds that are rapidly mobilized;
• initiating a discussion on the current limits to the availability of orphan vaccines.

Sources: CDC Emerging Infectious Diseases "Development of orphan vaccines : an industry perspective", November1999

The trade laws and the urgent health situation

Proceedings started by 39 pharmaceutical industries against the South African government laid the emphasis on how urgent health measures were in some countries. Governments that could not pay the full price, have violated the intellectual property rights by opening the national market to generics of molecules protected by a patent.
The agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) was signed in 1994. At the same date, the agreements that instituted the World Trade Organization were signed. In 1997, South Africa passed a law allowing importations in parallel and substitution of drugs on its territory and in specific circumstances. This law was perceived as contrary to TRIPS and as non-constitutional by the pharmaceutical industry.

Some countries such as India where TRIPS have not been enforced yet are big producers of generic drugs at a very good price. Numerous associations, among which Médecins sans Frontières (Doctors Without Borders), struggle for the promotion of generic drugs with the South African government. Pharmaceutical industries have been accused of the high cost of treatments. However, they reject the idea that they are the only ones who can provide drugs. Since the situation is so urgent in South Africa (nearly 5 million seropositives at the end of 2000), the pharmaceutical industry is blamed. However, its role does not consist in replacing the social security systems or public authorities. What matters to the pharmaceutical industry is to make sure that laws on intellectual property are respected since it is the only means to support research and development of new molecules. It affirms that it is willing to facilitate the access of poor countries to anti-retrovirals. However, it is legitimate that industries worry about the future of their patents in the rest of the world and also about the capacity of the countries concerned to reduce the traffic to industrialized countries.

Despite everything, the South-African government has to be blamed for the current situation in the country. It refused the offers from the International Therapeutic Solidarity Fund for prevention of vertical transmission of HIV (mother-to-child), as well as offers from industries to reduce prices or to give free drugs. AIDS has not been declared to be a national urgency by the South-African government. Therefore it prevents the country from benefiting legally from compulsory licenses. Compulsory licenses allow companies in some circumstances to produce a drug that is still patented with payment of royalties in return to the company holding this patent.

A Differential Pricing Meeting was held by the World Health Organization (WHO) and the World Trade Organization (WTO) in Hosbjor near Olso (Norway) from 8 to 11 April. The theme of the workshop was "Differential pricing and financing of essential drugs". Fifty experts were gathered, they represented all the protagonists involved in the access to essential drugs in developing countries: pharmaceutical companies, generic drug companies, NGO representatives, governments and intergovernmental organizations. These experts concluded that expanding access to affordable medicines to poor countries was only possible and could be carried out if three conditions were met:

1- Differential pricing

Setting different prices between developed and developing countries is a principle that all have accepted provided that: - the price of drugs in rich countries is not increased; - the price of drugs in poor countries does not become the standard price for the setting of prices in rich countries; - means to prevent traffic of these drugs to rich countries are implemented.

2- Generic drugs

Generic drugs will be an additional means to reduce the price of drugs through competition. The safeguards of TRIPS are the following: protection of intellectual property rights is, everyone agrees, a motor for research and development of new molecules, but not exclusively. The countries must use the safeguards included into the agreements on TRIPS.

3- Financing

Despite decreased prices of treatments, it will still be impossible for some countries to buy treatments against AIDS and opportunistic diseases. External financing will be therefore necessary. It should concern the whole care system and should be extended to prevention, education and patients' care.