This article is part of our special report Innovation and patients at the core of EU orphan drugs law review.
In the absence of the EU orphan drugs regulation, which focuses on rare diseases, approximately two million patients would not get access to therapies, a new industry-funded report has found.
Yet, the report rejects a European Commission staff working document suggesting that in some cases, the pharma industry was “overcompensated” and that the healthcare cost related to orphan medicines have risen by €20-25 billion since the legislation was introduced in 2000.
“Only 61 orphan products would have been developed and launched in Europe had legislation not been in place, representing a reduction of about 50%”, said Adam Hutchings, managing director at consultancy Dolon, which produced the report.
Referring to the number of patients who would have been affected in the absence of the legislation, he said: “We infer that that would mean about two million patients not getting access to a rare disease treatment who have benefited over the last 20 years.”
The Orphan Regulation introduced some incentives for the pharma industry to invest in the area of rare diseases, resulting in more than 160 new medicines. However, the Commission now wants to re-visit and amend the regulation as part of a new Pharmaceutical Strategy.
For its part, the pharma industry warns that if incentives are changed, this would negatively impact investments in innovation in this sensitive public health field.
Speaking at an event organized by EFPIA on 30 October, Hutchings said a pharma company’s decision to invest in orphan drugs is a “tremendously” complex one.
“First, you have to invest a lot of money very early on in the development process. Secondly bringing a medicine to market, you don’t have a very long-time lag between making that large investment and any potential return on that investment,” he said.
“The third aspect is associated with very high risk because there is a very good chance you’re not going to get any return on that investment, because the drug is not going to be successful,” he added.
Hutchings explained that the existing status quo of orphan medicines in Europe represents a marginal economic case even with legislation, and that in the absence of legislation, the pharma industry would have seen a significant reduction in innovation and rare diseases.
“Therefore, any further change or any deterioration in the incentives frameworks for rare diseases risks reducing the amount of innovation that we can expect to future,” he warned.
Along the same line, Ulf Staginnus, senior vice president in pharmaceutical company Ipsen, said the Dolon report shows that there is high uncertainty and many people are often not aware of how complicated things are with rare diseases.
The orphan regulation, he added, has benefited a large number of stakeholders – not only companies but also academics, hospitals and cancer organisations.
“EFPIA supports the creation of a high-level forum in order to understand and create novel flexible and collaborative models to solve the access issues that still exist beyond the discussion of incentives,” Staginnus said.
The Commission’s reservations
Citing antimicrobials as an example, the European Commission staff working document, conducted by a team of consultants led by Technopolis Group, recently stated that the EU orphan regulation has been gradually less effective, considering that 95% of rare diseases currently still do not have a treatment option.
Regarding the incentives, the document emphasised that in general, they encouraged investment in unmet medical needs, but stressed that the current market conditions are different compared to the period before 2000. The document says that in certain therapeutic areas, the market has started to look more like that for non-orphans.
“In cases where the market allows industry to easily recover its investment, it would be questionable whether incentives like the 10-year market exclusivity remain the most appropriate way to stimulate development of new treatments for rare diseases,” the document reads.
Critics say the Commission’s approach toward incentives is not clear. On the one hand, it wants to give innovation a boost, focusing on unmet medical needs, and on the other, it targets the only tool that incentivises the pharma industry to invest.
Tidde Goldhoorn, an official from the European Commission’s Directorate-General for Health and Food Safety, said the new pharmaceutical strategy is expected later this year.
“An inception impact assessment on the different policy options will be published soon after,” he said.
Asked by EURACTIV if the executive sees any risk of losing pharma investment in orphan drugs if incentives change, he referred to a 2018 Commission study suggesting that the current EU incentives system, including orphan drugs, is competitive compared to other jurisdictions.
“I would say that we should be positive about the general incentives framework. However, we still have some challenges to address but the overall picture, I think, is positive”.
The EU official also hinted that the pharma industry should be more transparent when it comes to the actual research and development costs.
Comparing the reports of Technopolis and Dolon, the EU official said the latter put the estimates higher.
“We also asked the companies in our surveys about development costs and further information, and I think there were only two companies responding to this,” he said.
Patients: important to maintain incentives
Meanwhile, patients suffering from rare diseases are caught in the middle of this policy clash. They seek enhanced access and more affordable therapies but at the same time, they want the incentives to remain, in order for the pharma industry to keep investing.
“I think it’s very important to maintain a balanced incentive framework that will allow patient access to adequate treatments or medicines that help managing a disease. That’s very important,” said Simone Boselli, public affairs director of the European Organisation for Rare Diseases (EURORDIS).
To some extent, Boselli added, Europe still depends on orphan drugs coming from the US.
“But at the same time, there are a number of orphan drugs discovered and manufactured in Europe. And I would want to see, as a European, small biotech or even startups becoming the next big thing in Europe. But they need an environment that suits for that,” he said.
[Edited by Zoran Radosavljevic]