The future of Orphan Medicines in the EU

Current legislation and incentives

The current European (EU) legislation incentivising the development of medicinal products for rare diseases has been in place for over 20 years (Regulation (EC) No 141/2000 & No 847/2000), recognising that patients with rare diseases deserve the same quality and availability of treatment as other patients. The legislation was introduced to ensure that patients with rare diseases would have access to important medicinal products, which would not be developed under the constraints of the standard pharmaceutical legislation and under normal market conditions. Orphan drug designation is sought during development for products that diagnose, treat or prevent life-threatening or chronically debilitating conditions that are rare (affecting not more than five in 10,000 people in the EU) or where the medicine is unlikely to generate sufficient profit to justify R&D costs. In order for the medicinal product to be granted orphan designation, there must be no satisfactory method of diagnosis, prevention, or treatment of the condition already authorised, or, if such a method exists, the medicine must present a significant benefit to those affected by the condition.

The incentives of orphan drug designation include automatic access to the Centralised Procedure (a single EU-wide MA) with 10 years market exclusivity post-authorisation for similar medicines. An additional 2 years of market protection is awarded for compliance with a paediatric investigation plan. Fee reductions (90-100%) are awarded for EMA protocol assistance (scientific advice to support the development of the orphan drug) and reduced fees for Inspection, Marketing Authorisation Application, post-authorisation procedures and annual fees. Once Marketing Authorisation is granted, the marketing exclusivity can be shortened to 6 years if the orphan drug criteria are no longer met, and that the product is sufficiently profitable.

It is recognised that the EU orphan legislation has been a success, where to date over 2,700 orphan drug designations have been granted by the European Commission (EC) and over 200 Marketing Authorisations for indications within rare diseases. The number of EU-approved medicines for rare diseases was in single digits two decades ago (EFPIA View, October 2023). Furthermore, the share of orphan medicines in the total sale of branded medicines has increased worldwide from 6% in 2000 to over 16% in 2016, and it is expected to reach 21% in 2022 (EC Impact Assessment Report, 2023). All accept that the legislation introduced in 2000 has led to an increase in patient access to medicines for treating rare diseases.

Proposed legislation and incentives

As part of the implementation of the Pharmaceutical Strategy for Europe, an overhaul of the Pharmaceutical Legislation has been proposed by the EC in April 2023, which seeks to repeal Directive 2001/83/EC and Regulation (EC) No 141/2000 and update the orphan drug legislation. The impetus for this centres around the EC opinion that the medical needs of patients with rare diseases and children are not sufficiently met, as developers target the most lucrative orphan disease areas and not necessarily those with a high unmet medical need (HUMN). The EC recognises that access to orphan drugs varies significantly across Member States, as there is no current obligation to launch the product across the EU and pricing and reimbursement mechanisms differ across the EU. The EC also considers that the current system caters insufficiently for innovation and the current legal definitions of rare disease and the prevalence of the condition may not be fit for purpose in view of new scientific developments. Lastly, the EC considers that the system creates unnecessary regulatory burden, where an orphan medicines is assessed by up to four Agency Committees, namely the Committee for Orphan Medicinal Products (COMP), PDCO, CHMP and potentially CAT (EC Impact Assessment Report, 2023).

In order to address the above concerns, the EC has proposed changes to orphan legislation to include:

  • Merger of the orphan regulation with the paediatric regulation, to allow for simplification and increased coherence.
  • The committees CHMP, PRAC and the Co-ordination Group for Mutual Recognition and Decentralised Procedures Human (CMDh) will be retained, with the addition of patient representatives, while all other scientific committees, including COMP, will be structured within Working Parties and pools of experts.
  • Transfer of the responsibility for orphan designations from the EC to the EMA, to provide a more effective and efficient procedure.
  • Orphan designation will be valid for only 7 years (currently there is no cap), in order to incite faster authorisation of designated orphan medicinal products.
  • The orphan designation based on prevalence may not be appropriate in all cases and the EC may pass delegated acts to best define what is considered ‘rare’.
  • The orphan designation criterion on the basis of return on investment has been abolished, as it has never been used.
  • Variable duration of market exclusivity of 10, 9 and 5 years, based on the type of orphan medicine i.e. for HUMN, new active substances and well-established use applications, respectively. This aims to improve patient access, address unmet medical need and affordability for health systems.
  • A ‘bonus’ market exclusivity extension of 1 year can be granted, based on patient accessibility within 2 years of authorisation in all relevant Member States (that has patients), but only for HUMN products and new active substances. Companies could receive the market launch incentive if, due to reasons beyond their control, the market launch is delayed or missed (e.g. the Member State doesn’t wish to be supplied at that particular moment or doesn’t have the specialised infrastructure, e.g. in case of ATMPs). Allowances will be made for SMEs and not-for-profit entities for their capacity to engage in multiple parallel pricing negotiations.
  • A bonus 1 year market exclusivity is provided for a new therapeutic indication (with a maximum of two indications).
  • Regulatory data protection, as provided by the general pharmaceutical legislation, will also apply to orphan medicines, thus allowing for Day 1 entry of generics and biosimilars after market exclusivity expiry.
  • Enhanced interaction between different legal frameworks (e.g., medical devices).
  • Enhanced interaction with downstream decision makers (HTA bodies, payers).
  • Integrating digital tools and real world evidence into the regulatory system.

Criticism of proposed legislation and incentives

The European Federation of Pharmaceutical Industries and Associations (EFPIA) considers these proposed changes will reduce the drive for innovation with detrimental effects on meeting the needs of patients with rare diseases. EFPIA has commissioned a study that estimated the impact on incentives for innovation of the changes proposed by the EC using risk-adjusted Net Present Value modelling as developed by Dolon, a strategic consultancy specialising in rare diseases (Dolon for EFPIA, August 2023). It was concluded that the shortening of marketing exclusivity and the introduction of a 7 year validity for the orphan designation would decrease innovation based on EU incentives by 12%. The EC has estimated that 375 orphan medicines would be approved over the next 15 years and, therefore, a reduction of 12% translates to a loss of 45 orphan medicines between 2020-2035. It was estimated that approximately 1.5 million rare disease patients would be deprived of a novel treatment option, with associated reduction of about €4.5 billion in R&D spending. The Dolon report called into question the EC’s expectation that orphan medicines treating HUMN would increase, given they would receive the full 10 years market exclusivity, as little is being done to tackle the root causes of impaired patient access. The modelling showed that innovation would reduce by 28 to 36% with the introduction of the EC proposed changes to orphan legislation.


Although the intention of the EC is to increase patient access to orphan medicines through the proposed legislative revisions, with a tiered reward system that favours medicines treating HUMN, any reductions in regulatory data protection baseline and orphan market exclusivity will only make development of orphan medicines less appealing to Industry. EFPIA are vocal in their dissatisfaction of the proposed EC changes to the pharmaceutical legislation as a whole and reiterates Industry’s view that the proposals, in their current form, would harm patient access to medicines and innovation in the EU. EFPIA’s official response to the EC proposed changes has been recently published (EFPIA official response to draft pharmaceutical legislation, October 2023) and it is important for the future of orphan medicinal product development in the EU that an agreement between all parties can be achieved.

Lastly, did you know that ‘rare disease day’ is the last day of February, so that every 4 years it can be celebrated on the rare day of the 29th February!

How can S-cubed help you?

S-cubed are able to support clients in obtaining an Orphan Drug Designation from authoring of the scientific documentation, preparation and submission of the application through to responses to the EMA’s questions and determination of the outcome.

Any Questions?

If you have any questions on this topic, please don’t hesitate to ask. You can contact us here, via email (, and telephone (S-cubed Ltd: +44 1235 77 22 60).