EU to foster development of 'orphan drugs' for rare diseases

BRUSSELS (July 28, 1998 5:05 p.m. EDT http://www.nandotimes.com) - The
European Commission proposed incentives on Tuesday to encourage pharmaceutical
companies to develop drugs to treat rare diseases.

Following in the footsteps of the United States, Japan and others, the
Commission said the European Union should promote research into "orphan drugs"
-- products that can be unprofitable because they reach such small numbers of
patients.

The EU executive proposed a package including exclusive market authorization,
streamlined approval procedures and a waiver of registration fees.

Europe's pharmaceutical industry and patients groups have been lobbying for
the initiative for several years.

"I think that just before the summer vacation, this is very good news," said
Cees Smit, coordinator of the Netherlands Hemophilia Society and chairman of
the European Platform for Patients' Organizations, Science and Industry.

He said the lack of incentives for orphan drugs had left Europe's
pharmaceutical companies at a competitive disadvantage.

If the legislation is approved by EU governments and the European Parliament,
it would apply to drugs for illnesses affecting no more than five per 10,000
people in the EU.

Other diseases could qualify under certain conditions -- for example, if they
were life threatening and transmissible.

Manufacturers would have exclusive distribution rights in the EU for 10 years,
during which time no EU country could authorize any other product with the
same active ingredient.

However, that right could be withdrawn after six years if a drug's market grew
beyond "orphan" status or if its price allowed the company to earn an
"unreasonable profit."

Orphan drugs would automatically qualify for the EU's centralized drug
approval system, operated by the European Agency for the Evaluation of
Medicinal Products in London. The agency's usual 200,000 Ecu fee ($220,000)
would be partly or completely waived.

A new committee -- including representatives of national governments and
patients organizations and rare disease experts -- would be set up to consider
applications for orphan drug status.

The 15 EU countries could adopt additional incentives on their own, for
example tax breaks for manufacturers. Juergen Reden, research and development
adviser for the European Federation of Pharmaceutical Industries and
Associations (EFPIA), said he hoped governments would take up that option.

"Tax incentives and market exclusivity are the two key issues as we know from
the U.S. experience," he said. The EU generally leaves tax matters up to
national governments.

The United States pioneered orphan drug incentives in 1983. By the end of
1997, more than 150 drugs with orphan drug status had been marketed there,
mostly by small firms specializing in biotechnology and genetic engineering,
according to a Commission report.

Australia and Singapore have also introduced incentives.

Reden said the EFPIA welcomed the EU proposal, though it hoped to change the
language on "an unreasonable profit" since that would be too difficult to
define.


By Suzanne Perry, Reuters
Copyright 1998 Nando.net
Copyright 1998 Reuters News Service


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