Revision of the Orphan Medicines Regulation

Published on: 
Pharmaceutical Technology, Pharmaceutical Technology, January 2023, Volume 47, Issue 1

Does the new regulatory framework have the potential to incentivise R&D investment in rare diseases?

On 11 Aug. 2020, the European Commission (EC) published its evaluation on the legislation for medicines for rare diseases and for children (1). This marked the first comprehensive evaluation of the Orphan Regulation (Regulation (EC) No 141/2000 of the European Parliament and of the Council of 16 December 1999 on Orphan Medicinal Products) since its adoption in 2000 (2).

The purpose of the Orphan Regulation is to “lay down a community procedure for the designation of medicinal products as orphan medicinal products and to provide incentives for the research, development and placing on the market of designated orphan medicinal products” (3). Within the European Union (EU), a disease is defined as rare when its prevalence does not exceed the threshold of five in 10,000 people (4). However, despite the low prevalence, more than 6000 different rare diseases have been identified, affecting approximately 30 million people across Europe (5). Many of these rare diseases (80%) are genetic in origin and are often chronic and life-threatening.

The evaluation of the Orphan Regulation was conducted in line with the European Commission’s (EC’s) Better Regulation Guidelines, which was used to assess the regulation’s strengths and weaknesses. The principal objectives of the Better Regulation agenda are to ensure that EU policymaking is based on evidence, to make EU laws simpler and better, and to involve citizens, businesses, and stakeholders in the decision-making process (6).

Taken within this context, the evaluation consisted of several stages, including the publication of a roadmap, assessing various recent studies on the functioning of the regulation on medicines for rare diseases, and the extensive consultation of stakeholders—which was aimed at collecting views and opinions on the implementation of the Orphan Regulation, to gather factual information on what works well and where there is still room for improvement, and to gather data and knowledge about the impact of the legislation (7). The impact assessment formally ended on 31 July 2021.

Rationale for revision

The current framework for orphan medicines has delivered significant societal benefits, with more than 207 orphan medicines gaining approval from the European Medicines Agency (EMA) since 2000, 38 extensions of indications being granted, and patient access across the EU accelerating by nine months on average (8). This progress has been achieved by a stable regulatory framework, which incentivises increased investments into R&D for treatments for rare diseases, and especially ultra-rare diseases.

Nevertheless, the commission’s Staff Working Document (SWD) published in 2020 has highlighted that the current legal framework presents several shortcomings, including insufficient flexibility in supporting scientific developments and R&D in the context of unmet needs. The document notes that at present, no authorized treatment is available for 95% of rare diseases. It also identifies the excessive burden and inefficiency of some procedures, including within EMA itself, and points out that legislative frameworks need to be adapted considering the scientific progress being made in areas such as personalized medicine and the use of biomarkers (9). As such, the EC has reviewed the legislation to assess whether reform is necessary and gauge what this could consist of.

Key areas of potential legislative change

Conditionality of Intellectual Property (IP). Under the conditional system, companies might obtain and maintain their IP rights based on two conditions:

  • companies must launch the product in most, if not all 27 EU Member States
  • R&D expenditure must be transparently reported.

Both conditions are far reaching and create additional risk for companies when launching their orphan medicinal products given that most developers tend to initially focus on the big five markets in Europe (Germany, France, Italy, Spain, and the United Kingdom). By incentivising broader launches, this increases the burden on companies to manage 27 different market access strategies, and for public authorities who will be required to assess pricing and reimbursement applications for medicines they may not even have a patient population for.

The requirement to transparently report R&D expenditures could also be viewed as a huge threat to the industry who might find themselves in a position where they are compelled to reveal confidential trade secrets. This could be further confounded by the lack of agreed standards on what constitutes ‘cost’. Therefore, if cost is the primary consideration, it may not be possible to achieve a viable price that fully reflects the risks and probabilities of achieving clinical success and market access for the product (10).

Reducing market exclusivity. Another potential incentive under consideration to combat unmet medical need and encourage broader patient access is the reduction of market exclusivity for orphan products by half, from 10 to five years. Currently, the 10-year market exclusivity period safeguards a company from having a similar product for the same indication being submitted for approval. Additionally, if a product works in two completely different indications, the developer can obtain a second or even a third orphan exclusivity designation, which helps stimulate investment in new indications. Nevertheless, the EC is considering reducing the market exclusivity period for new indications and hypothetically giving orphan exclusivity only to products defined as addressing unmet needs (11). It could therefore be argued that if the probability of attaining orphan drug designation decreases, this could directly affect the willingness of companies to invest in the orphan medicines space (10).

Concerns of potential legislative changes

A publication of draft impact assessment by Politico Europe renewed concerns that the commission’s revision of the Orphan Regulation may upset the delicate balance between academia, start-ups, and well-established companies that work together to bring new therapies and solutions to rare disease patients. In her commentary, Claire Skentelbery, director of EuropaBio, noted that “while political priorities of affordability and accessibility are shared by all stakeholders including industry, these must be balanced with the need for innovation and competitiveness in Europe, especially as revision of the Orphan Regulation will shape the regulatory environment for orphan medicine development in Europe for the next 25 to 30 years” (12).

The author argues that any move to lower and restrict incentives could jeopardize the ability of orphan drug developers to attract investments that enable them to continue with their product development programmes. This argument is especially pertinent to Europe’s small and medium-sized biotechnology companies as a reduction in incentives would hinder their ability to raise capital, decrease their value, and could even drive innovation out of Europe (12).


Skentelbury wrote in her commentary that, “Preserving and building upon the stability and predictability of orphan designation, approvals, marketing exclusivity, and regulatory data protection are essential ingredients to bringing further innovation to market and in supporting the rare disease ecosystem” (12).

The issue of addressing unmet needs requires all stakeholders to imagine different ways of partnering and collaborating to bring about sufficient levels of R&D, as well as to reach actionable solutions that address the fundamental questions that have now been raised. It is therefore critical that industry stakeholders share their insights and experience, whether directly or through trade associations, to ensure that the resulting legislation is not only coherent but is also beneficial to all parties concerned, thereby serving to strengthen rather than undermine the achievements that have been made to date.

Taking a broader perspective, it is also vital that the Orphan Regulation review adopts a ‘global perspective’ and considers the interplay between the European framework and the incentive environment for the development of rare disease therapies in other geographies to create a system that attracts investment in rare disease innovation in Europe, which should form the core elements of the legislative review process (11).


1. EC. Joint Evaluation of Regulation (EC) No 1901/2006 of the European Parliament and of the Council of 12 December 2006 on Medicinal Products for Paediatric Use and Regulation (EC) No 141/2000 of the European Parliament and of the Council of 16 December 1999 o. Commission Staff Working Document: Part 1/6 (August 2020).
2. EC. Regulation (EC) No 141/2000 of the European Parliament and of the Council of 16 December 1999 on orphan medicinal products (December 1999).
3. EC. Regulation (EC) No 141/2000 of the European Parliament and of the Council of 16 December 1999 on orphan medicinal products (December 1999).
4. EMA. Orphan Designation: Overview. (accessed 8 Dec. 2022).
5. EURORDIS. What is a Rare Disease? (accessed 8 Dec. 2022).
6. EC. Better Regulation: Why and How. (accessed 8 Dec. 2022).
7. EC. Evaluation of the Medicines for Rare Diseases and Children Legislation. (accessed 8 Dec. 2022).
8. EMA. Orphan Medicinal Product Designation: Overview 2000–2021. /en/documents/other/orphan-medicines-figures-2000-2021_en.pdf (accessed 8 Dec. 2022).
9. EUCOPE. The Revision of the EU Regulations on Medicines for Children and Rare Diseases: Background and Discussion., March 2022.
10. Berdud, M.; Garau, M.; O’Neill, P.; Rozanova, O.; Bell, E. Economic and Financial Challenges of Developing Orphan Medicinal Products. Does the European Regulation Tackle them? Office of Health Economics, February 2020.
11. EUCOPE. The Orphan Medicines Regulation: The Way Forward., July 2021.
12. Skentelbery, C. The Revision of the Orphan Medicines Regulation is an Opportunity: Will Europe Seize it?, 11 Nov. 2022.

About the author

Bianca Piachaud-Moustakis is lead writer at Pharmavision,

Article details

Pharmaceutical Technology Europe
Vol. 35, No. 1
January 2023
Pages: 7–8


When referring to this article, please cite it as B. Piachaud-Moustakis, “Revision of the Orphan Medicines Regulation,” Pharmaceutical Technology Europe 35 (1) 2023.