EU Pharmaceutical Legislation Proposal: Regulatory Impact to Orphan Designations

Published 12th June 2023

EU Pharma Legislation Reforms: Regulatory impact to Orphan Designations

The European Commission presented its draft for a comprehensive reform of the pharmaceutical legislation on 26 April 2023. The so-called EU Pharma Package essentially comprises a revision of the Directive on the Community Code relating to Medicinal Products for Human Use and a Regulation to replace Regulations (EC) No. 726/2004 (authorisation and supervision of medicinal products) and No. 141/2000 (orphan medicinal products) as well as parts of Regulation (EC) No. 1901/2006 (paediatric medicinal products).  

The proposal includes a new draft Regulation, which will repeal Regulation (EC) No 726/2004, the Orphan Medicines Regulation 141/2000 and the Paediatric Regulation 1901/2006. 

The current Orphan legislation was introduced in 2000 to create better incentives for developing orphan medicinal products. 

The revision of the legislation is often considered alongside the EU regulation for paediatric medicines, as diseases found in children are mostly considered rare diseases too. The Commission jointly evaluated the two in 2020. the affordability of orphan medicines is becoming a growing challenge for EU healthcare systems. There is also unequal access to medicines and insufficient incentives for developing new orphan medicines. 

The draft Regulation significantly impacts incentives available to the developers of orphan medicines. The proposed changes aim to rebalance the incentives schemes by shifting the focus to the areas of high unmet medical needs and fostering a faster generic and biosimilar competition.  Amongst many, one of the major change relates to the new powers of the European Medicines Agency (EMA) with regard to orphan designations where the responsibility for transfer of the adoption for a designation will be shifted to EMA from the European Commission.   


Orphan designation criteria

The proposal continues to preserve the prevalence criterion of the condition affecting not more than 5 in 10,000 individuals.  However, based on the EMA’s recommendations the Commission will be able to lay down different criteria for certain types of diseases if the existing criteria are not deemed to be appropriate due to the specific characteristics of given conditions or for other scientific reasons.  The draft regulation also includes a proposal for specific designation criteria for conditions which have a short duration and high mortality where measuring the number of people that acquired the disease during a specific time period would better reflect if it is rare within the meaning of the Regulation than measuring the number of people who are ‘affected by it’ in a specific moment of time. This provision broadens the scope to propose new criteria for orphan designations. 

In conjunction with the new provisions in designation criteria, the definition of significant benefit will now be more acrimonious and the clinically relevant advantage or a major contribution to the patient care will only be recognised if such an advantage or contribution benefits a substantial part of the target population.  


Orphan designation procedure

With the goal to expedite the orphan designation procedure, the draft Regulation gives powers to the EMA to adopt decisions granting, refusing and transferring an orphan designation.  This also confirms the proposal for substantial reforms of the European Medicines Agency’s committee structure. More particularly, assessments being done in “domains”, involving combination products/ CDx expertise as needed, and transforming the Orphans (COMP), Paediatrics (PDCO) and Advanced Therapies (CAT) Committees into smaller expert advisory groups, as opposed to including representation from each Member State by default. 

To evaluate if the orphan designation criteria are met, the EMA may now be able to optionally request opinions from the Committee for Medicinal Products for Human Use (CHMP) or one of the relevant working parties.  Unlike the existing procedure, in case the sponsor wishes to transfer the orphan designation after the grant, a prior approval from the EMA will be required.  Remarkably, there does not seem to be a provision in the draft Regulation enabling sponsor’s to appeal against negative decisions issued by the EMA, particularly for refusal of the orphan designation or a transfer. 

One of the major revisions in the proposed changes relates to, a 7 year temporal validity for the orphan designation being exercised for the Orphan designation as opposed to the current award of indefinite validity (there is no limit as of today) . The sponsor should however be able to extend this validity if they can submit a “justified request” with sufficient evidence that the relevant studies supporting the use of the designated orphan medicinal product in the applied conditions are ongoing and promising to support the filing of a future marketing authorisation (MA) application.  This provision seems to have been embedded in the draft legislation by the Commission to encourage faster development and authorisation of designated orphan products. On the other hand, this may push the sponsors/companies to apply for orphan designations further down in the development process. 


Unmet Medical Need

One of the underlying concepts key to understanding the legislative changes is Unmet Medical Need (UMN). A key priority of the Commission when it comes to incentives is to encourage innovation to solve Unmet Medical Need (UMN). Changes proposed in the draft legislation in context of UMN are therefore likely to affect incentives for medicines, orphan and paediatric medicinal products.  

A definition of Unmet Medical Need (UMN) requires a holistic understanding as it can manifest in very different ways. Products are considered to address a high unmet medical need if: 

  • There is no authorised medicine for the condition, or the new product brings exceptional therapeutic advancement and 
  • The new product results in a meaningful reduction in disease morbidity or mortality. 


From the Commission’s perspective, the revised unmet medical need approach along with the modulated market exclusivity will act as a catalyst to promote R&D of orphan medicines aimed to address high unmet medical need and will further assure balanced market predictability and incentive distribution.  


Modulated market exclusivity

The modulated periods of the market exclusivity are as follows: 

  • Orphan products addressing high unmet medical needs will benefit from the longest market exclusivity of 10 years, 
  • Well-established use orphan products will benefit from 5 years market exclusivity, and 
  • All the other orphan products will benefit from 9 years market exclusivity.   


The market exclusivity can be prolonged by 12 months (not available for well-established use products) for supply of the product or if an MA holder obtains an MA for one or more new therapeutic indications for a different orphan condition, provided that the approval is granted at least two years before the end of the exclusivity period.  Such a prolongation may be granted twice, if the new therapeutic indications are each time for different orphan conditions.  This is in contrast to the current rules, where each therapeutic indication for a different orphan conditions benefits from a separate orphan market exclusivity period.  


Amended regulatory protection periods

Orphan medicinal products would benefit from the same data protection periods as those established for innovative medicinal products. This would include the potential extensions available in relation to innovative products, with the exception of the extension for additional therapeutic indications from which an orphan product would benefit only in relation to the extended market exclusivity period, if applicable. 

Correspondingly, the modulable data exclusivity periods detailed above, in theory, could award orphan medicinal products a total market exclusivity period of up to 13 years. However, in real world, such scenarios would practically be rare and therefore it is envisaged that most orphan medicinal products might end up with market exclusivity period of nine years unlike the 10 years available today.  



The Commission’s proposal will aim to foster innovation including in areas of unmet medical need, improve supply, reduce bureaucratic red tapes and improve patient access to affordable treatments. In the context of Orphan, following implications and changes are envisaged: 



Although the EC keeps the current prevalence threshold it also introduced the feasibility for further change, which is of concern. The inclusion of a narrow UMN definition together with the introduction of the concept of high unmet medical need are of major concern (see section UMN). 


What are the changes? 

For orphan medicines, it suggests additional elements for criteria for high unmet medical need and enhanced regulatory support in such situations, improved availability and accessibility, 7 year temporal validity of the orphan designation, cumulative prevalence, streamlined procedures, improved significant benefit rules and a less complex similarity assessment.  An additional important change includes the transfer of the adoption for a designation from the European Commission to EMA. 

This article is based on the current wording of the EU’s proposal published on 26 April 2023 as well as texts gathered from Regulatory Intelligence. The article can therefore significantly undergo revisions until the conclusion of legislative process. DLRC will continue to follow the proposed changes and bring back the latest positions as soon as possible. 

Read our overview of the EU Pharmaceutical Legislation Proposal here.


To discuss how this may effect you and your regulatory strategy, contact our experts via the link below.

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