Amended proposal for a EUROPEAN PARLIAMENT AND COUNCIL REGULATION (EC) on orphan medicinal products

EXPLANATORY MEMORANDUM

A. Principles

1. In July 1998, the Commission submitted the proposal for a European Parliament and Council Regulation (EC) on orphan medicinal products COM (98)0450 -C4-0470/98-98/0240 (COD) for adoption by the co-decision procedure laid down in Article 251 of the Treaty establishing the European Community.

On 9th March 1999, the European Parliament adopted a series of amendments at its first reading. On this occasion the Commission gave its position on each amendment, indicating which amendments it could accept and which amendments could not be included.

In the light of these developments, the Commission has drafted this amended proposal.

2. The Commission has made two types of amendments.

Firstly, in response to the first reading by the European Parliament, a number of new provisions have been accepted. The majority of these serve either to remove ambiguities or to elaborate further on a specific idea in the original proposal. In addition, there are some new ideas which expand on the original text but do not change the fundamental principles.

Secondly, the Commission has made some minor rewording and editing to ensure consistency between this text and other applicable Community legislation and to ensure internal consistency within the text itself. These amendments also take account of issues raised during preliminary discussion in Council.

B. Explanation of the main amendments

1. Criteria for designation

The success of this proposal depends on a clear and objective method for determining the criteria according to which a medicinal product should be designated as an orphan medicinal product. There has been much debate about whether this designation should be based on economic or epidemiological criteria. As in the original text, the amended text offers a combination of both criteria; the economic criteria being applicable where the prevalence of the condition does not meet the epidemiological criteria. The possibility of relying on economic criteria has been expanded from communicable diseases to cover all serious and chronic conditions. These changes take account of the European Parliament's amendments 3 and 7 and some concerns that have been raised during preliminary discussions in Council. In addition, the changes open the application of the Regulation to other serious conditions which, although relatively prevalent, are unlikely to attract research because the treatments developed would not be commercially viable. This is in line with one of the objectives of the Regulation which is to encourage research into so-called "uneconomic drugs". It also brings the regulation closer to the US Orphan drug act where either an economic or epidemiological criterion may be used for designation.

The text has been expanded to ensure that the sponsor provides annual reports on the development of a designated medicinal product, taking on board amendment 11 of the European Parliament.

2. Definitions for 'similar medicinal product" and "clinical superiority".

In line with the European Parliament's amendments 19 and 20, and in order to allow the best scientific input into the development of guidelines for the interpretation of the terms 'similar medicinal product" and "clinical superiority", the definition of "similar medicinal product" has been removed from the text. This definition is replaced by a requirement for the Commission, in consultation with the Agency, which includes the Committee for Orphan Medicinal Products to adopt both this definition and the definition of "clinical superiority" in the form of an implementing Regulation, and to further support this Regulation by detailed guidance. This allows the definitions to be adapted to scientific and technical progress as necessary and allows consultation with the appropriate scientific expertise before the adoption of a final text.

Since clinical superiority is difficult to establish at the very early stage of development when designation as an orphan medicinal product is likely to take place, this term has been removed from Article 3 and replaced by the notion that, in situations where there is already an existing treatment for an orphan condition, significant benefit to those affected by the condition should be demonstrated.

3. Changes affecting the Committee for Orphan Medicinal Products

In line with the European Parliament's amendment 8, it is now clearly stated that the Committee for Orphan Medicinal Products (COMP) is within the European Agency for the Evaluation of Medicinal Products (Agency). In addition, following discussions in Council, and to ensure that the most appropriate membership may be selected by Member States, the need for the members of the Committee to be chosen due to their role and experience in the treatment or research into rare diseases has been deleted. Part of the European Parliament's amendment number 9 has been taken on board to ensure that appropriate additional expertise can be available if necessary. This is line with current procedures for other committees within the Agency. A requirement to maintain professional secrecy has been added, taking into account amendment 10 of the European Parliament.

Following discussions in Council, the need to have a two-thirds majority vote to adopt an opinion in the event of lack of consensus within the COMP has been introduced, and the timeframe for provision of an opinion has been changed from 60 to 90 days. While it is important that this process remains speedy, given the early stage in development, at which designation is likely to be applied for, the need for the original accelerated timeframe appears not to be justified.

4. Expansions or clarification of the text

As suggested by European Parliament's amendments 4 and 16, the clarification that the new form of intellectual property created by the designation of an orphan medicinal product is without prejudice to other intellectual property rights has been added.

In order to signify that both the European Commission and Parliament consider research on rare diseases to be a priority, the wording in recital 10 has been changed from "Commission" to "Community", taking into account amendment 5.

The definition of "sponsor" has been expanded to cover not just those who seek to obtain designation for an orphan medicinal product, but those who have already obtained this designation. Since the text uses the same term both prior to, and after designation, this change more correctly covers the context within the text.

Amendment 13 of the European Parliament has been introduced, thus facilitating the transfer of designation rights from one party to another. This is particularly necessary to accommodate the numerous mergers and restructuring which occur within the pharmaceutical industry.

The clarification that an application for designation may be made at any stage in the development of a medicinal product before an application for marketing authorisation has been submitted takes on board amendment 11. This idea is also translated into the possibility of asking for protocol assistance also for pre-clinical trials during the development phase of a medicinal product, in line with amendment 14.

Amendment 21 of the European Parliament has been included, specifying that medicinal products dedicated as orphan medicinal products shall be eligible for research aid for small and medium enterprises provided under the Fifth Framework Programme for Research and Technological Development.

Amended proposal for a EUROPEAN PARLIAMENT AND COUNCIL REGULATION (EC) on orphan medicinal products

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 100A 95 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the Economic and Social Committee,

Acting in accordance with the procedure laid down in Article 189 B 251 of the EC Treaty,

(1) Whereas some conditions occur so infrequently that the cost of developing and bringing to the market a medicinal product to diagnose, prevent or treat the condition would not be recovered by the expected sales of the medicinal product ; whereas the pharmaceutical industry would be unwilling to develop the medicinal product under normal market conditions ; whereas these medicinal products are therefore called " orphan " ;

(2) Whereas patients suffering from rare conditions should be entitled to the same quality of treatment as other patients ; whereas it is therefore necessary to stimulate the research, development and bringing to the market of appropriate medications by the pharmaceutical industry ; whereas incentives for the development of orphan medicinal products have been available in the United States since 1983 and in Japan since 1993 ;

(3) Whereas, in the European Union, only limited action has been taken so far, whether at national or at Community level, to stimulate the development of orphan medicinal products ; whereas such action is best taken at Community level in order to take advantage of the widest possible market and to avoid the dispersion of limited resources ; whereas action at Community level is preferable to uncoordinated measures by the Member States which may result in distortions of competition and barriers to intra-Community trade ;

(4) Whereas orphan medicinal products eligible for incentives should be easily and unequivocally identified ; whereas it seems most appropriate to achieve this result through the establishment of an open and transparent Community procedure for the designation of potential medicinal products as orphan medicinal products ;

(5) Whereas objective criteria for designation should be established ; whereas these criteria should be based on the prevalence of the condition for which diagnosis, prevention or treatment is sought; whereas a prevalence of no more than five affected person per ten thousand is generally regarded as the appropriate threshold ; whereas medicinal products intended for a life-threatening, seriously debilitating or serious and chronic seriously debilitating communicable condition should be eligible even when the prevalence is higher than five per ten thousand ;

(6) Whereas a Committee composed of experts appointed by the Member States should be established to examine applications for designation ; whereas this Committee should in addition include three representatives of patients' associations, to be designated by the Commission, and three other persons, also designated by the Commission, on a recommendation from the Agency ; whereas the Agency should be responsible for the adequate co-ordination between the Committee on orphan medicinal products and the Committee on proprietary medicinal products ;

(7) Whereas patients with such conditions deserve the same quality, safety and efficacy in medicinal products as other patients ; whereas orphan medicinal products should therefore be submitted to the normal evaluation process ; whereas sponsors of orphan medicinal products should have the possibility of obtaining a Community authorisation; whereas, in order to facilitate the granting or the maintenance of a Community authorisation, fees to be paid to the Agency should be waived at least in part ; whereas the Community budget should compensate the Agency for the loss in revenue thus occurred ;

(8) Whereas experience in the United States and Japan shows that the strongest incentive for industry to invest in the development and marketing of orphan medicinal products is the prospect of obtaining market exclusivity for a certain number of years during which part of the investment might be recovered ; whereas data protection under article 4(8)(a)(iii) of Council Directive 65/65 is not sufficient incentive for that purpose; whereas Member States acting independently cannot introduce this measure without a Community dimension as such a provision would be contradictory to Directive 65/65/EEC; whereas if such measures were adopted in an uncoordinated manner by the Member States, this would create obstacles to intra-Community trade, leading to distortions of competition and running contrary to a single market; whereas market exclusivity should however be limited to the therapeutic indication for which orphan medicinal product designation has been obtained, without prejudice to existing intellectual property rights; whereas, in the interest of patients, the market exclusivity granted to an orphan medicinal product should not prevent the marketing of a similar medicinal which could be of significant benefit to those affected by the condition is safer, more effective or otherwise clinically superior ;

(9) Whereas sponsors of orphan medicinal products designated under this Regulation should be entitled to the full benefit of any incentives granted by the Community or by the Member States to support the research and development of medicinal products for the diagnosis, prevention or treatment of such conditions, including rare diseases ;

(10) Whereas the specific programme Biomed 2, of the Fourth Framework Programme for research and technological development (1994-1998), supported research on the treatment of rare diseases, including methodologies for rapid schemes for the development of orphan medicinal products and inventories of available orphan medicinal in Europe; whereas these grants were to promote the establishment of cross national co-operation in order to implement basic and clinical research on rare diseases; whereas research on rare diseases continues to be a priority for the Community Commission, as it has been included in the Commission's Fifth Framework Programme (1998-2002) for research and technological development ; whereas this Regulation establishes a legal framework which will allow the swift and effective implementation of the outcome of this research ;

(11) Whereas rare diseases have been identified as a priority area for Community action within the framework for action in the field of public health (COM(93) 559 final) ; whereas the Commission, in its communication concerning a programme of Community action on rare diseases within the framework for action in the field of public health (COM(97) 225 final) has decided to give rare diseases priority within the public health framework ; whereas the Commission has proposed a European Parliament and Council Decision adopting a programme of Community action 1999-2003 on rare diseases in the context of the framework for action in the field of public, including actions to provide information, to deal with clusters of rare diseases in a population and to support relevant patient organisations; whereas this Regulation carries out one of the priorities laid down in this programme of action.

HAVE ADOPTED THIS REGULATION:

Article 1

Purpose

The purpose of this 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 bringing to the market of designated orphan medicinal products.

Article 2

Scope and definitions

For the purpose of this Regulation :

- medicinal product means a medicinal product for human use, as defined in Article 2 of Directive 65/65/EEC,

- orphan medicinal product means a medicinal product designated under the terms and conditions of this Regulation,

- sponsor means any legal or natural person, established in the Community, seeking to obtain or who has obtained the designation of a medicinal product as orphan medicinal product,

- Agency means the European Agency for the Evaluation of Medicinal Products.

Article 3

Criteria for designation

1. A medicinal product shall be designated as orphan medicinal product if its sponsor can establish that the medicinal product is intended for the diagnosis, prevention or treatment of a condition affecting less than five per ten thousand persons in the Community at the time that the application is made and that there exists no satisfactory method of diagnosis, prevention or treatment of the considered condition that has been authorised in the Community or, if such method exists, that the medicinal product will be of significant benefit to those affected by the condition. that it can reasonably be expected that the medicinal product will be safer, more effective or otherwise clinically superior.

2. Notwithstanding paragraph 1, a medicinal product may also be designated as orphan medicinal product if its sponsor can establish that the medicinal product is intended for the diagnosis, prevention or treatment of a life-threatening, or seriously debilitating or a serious and chronic communicable condition in the Community and that it is unlikely that, without incentives, the marketing of the medicinal product in the Community would generate sufficient return to justify the necessary investment.

3. The Commission shall, in consultation with the Member States, the Agency, and interested parties, draw up detailed guidance for the application of this Article.

Article 4

Committee for Orphan Medicinal Products

1. A Committee for Orphan Medicinal Products, hereinafter referred to as 'the Committee', is hereby set up within the European Agency for the Evaluation of Medicinal Products.

2. The task of the Committee shall be :

a) to examine any application for designation of a medicinal product as orphan medicinal product which is submitted to it in accordance with this Regulation,

b) upon request, to advise the Commission on the establishment and development of an orphan medicinal product policy for the European Union,

c) to assist the Commission in international liaison on matters relating to orphan medicinal products, particularly the United States and Japan, and in liaisons with patients support groups.

3. The Committee shall consist of one member nominated by each Member State, three members nominated by the Commission to represent patient organisations and three members nominated by the Commission on the basis of a recommendation from the Agency. The members of the Committee shall be appointed for a term of three years which shall be renewable. They shall be chosen by reason of their role and experience in treatment of or research into rare diseases. Where necessary they may seek the assistance of an expert.

4. The Committee shall elect its Chairman for a term of three years, renewable once.

5. The representatives of the Commission and the Executive Director of the Agency or his representative may attend all meetings of the Committee.

6. The Agency shall provide the Secretariat of the Committee.

7. Members of the Committee shall be required, even after their duties have ceased, not to disclose information of the kind covered by the obligation of professional secrecy.

Article 5

Procedure for designation

1. In order to obtain the designation of a medicinal product as orphan medicinal product, the sponsor shall submit, an application to the Agency, at any stage of the development of the medicinal product before an application for marketing authorisation is made, an application to the Agency.

2. The application shall be accompanied by the following particulars and documents:

a) name or corporate name and permanent address of the sponsor,

b) the name of the active ingredient (s)

c) proposed therapeutic indication,

d) the justification that Article 3 paragraph 1 or 2 is applicable.

3. The Commission shall, in consultation with the Member States, the Agency and interested parties, draw up detailed guidance on the format and content in which applications for designation are to be presented.

4. The Agency shall verify the validity of the application and prepare a summary report to the Committee. Where appropriate, it may request the sponsor to supplement the particulars and documents accompanying the application.

5. The Agency shall ensure that an opinion is given by the Committee within 9060 days of the receipt of a valid application.

6. When preparing its opinion, the Committee shall use its best endeavours to reach a consensus. If such a consensus cannot be reached, the opinion shall be adopted by a majority of two-thirds of the members of the Committee consist of the position of the majority of members. The opinion may be obtained by written procedure.

7. Where the opinion of the Committee is that the application does not satisfy the criteria set out in Article 3 paragraph 1, the Agency shall forthwith inform the sponsor. Within 30 days of receipt of the opinion, the sponsor may submit detailed grounds for appeal, which the Agency shall refer to the Committee. The Committee shall consider whether its opinion should be revised at the following meeting.

8. The Agency shall forthwith forward the final opinion of the Committee to the Commission, which shall adopt a decision within 30 days of receipt of the opinion. Where, exceptionally, the draft decision is not in accordance with the opinion of the Committee, the decision shall be adopted in accordance with the procedure laid down in Article 72 of Regulation (EEC) N 2309/93. The decision shall be notified to the sponsor and communicated to the Agency and to the competent authorities of the Member States.

9. The designated medicinal product shall be entered in the Community Register of Orphan Medicinal Products.

10. Each year the sponsor shall provide the Agency with a report on the state of development of the designated medicinal product.

11. In order to secure the transfer to another sponsor of the designation of an orphan medicinal product, the holder of that designation shall submit a specific application to the Agency. In consultation with the Member States, the Agency and the interested parties, the Commission shall draw up detailed guidance concerning the form in which transfer applications must be submitted and also the contents of such applications.

Article 6

Protocol assistance

1. The sponsor of an orphan medicinal product may, prior to the submission of an application for marketing authorisation, request advice from the Agency on the conduct of the various tests and trials necessary to demonstrate the quality, safety and efficacy of the medicinal product.

2. The Agency shall draw up a procedure on the development of orphan medicinal products, which shall cover in particular :

a) assistance in the development of a protocol for pre-clinical and clinical trials during the development phase and for the follow up of clinical investigations;

b) regulatory assistance for the definition of the content of the application for authorisation within the meaning of Article 6 of Council Regulation (EEC) N 2309/93.

Article 7

Community marketing authorisation

1. The person responsible for placing on the market an orphan medicinal product may request that authorisation to place the medicinal product on the market be granted by the Community in accordance with the provisions of Regulation (EEC) N 2309/93 without having to justify that the medicinal product qualifies under any part of the Annex to that Regulation.

2. A special contribution from the Community, distinct from that provided for in Article 57 of Regulation (EEC) N 2309/93, will be allocated every year to the Agency. This contribution will be used exclusively by the Agency to waive, in part or in total, the fees payable under Community rules adopted pursuant to Regulation (EEC) N 2309/93. A detailed report of the use made of this special contribution shall be presented by the Executive Director of the Agency at the end of each year. Any surplus occurring in a given year shall be carried forward and deducted from the special contribution for the following year.

3. The marketing authorisation granted for an orphan medicinal product shall cover only those therapeutic indications which fulfil the criteria set out in article 3. This is without prejudice to the possibility to apply for a separate marketing authorisation for other indications outside the scope of this Regulation.

Article 8

Market exclusivity

1. Where a marketing authorisation is granted pursuant to Regulation (EEC) 2309/93 or when all Member States have granted marketing authorisations according to the procedures for mutual recognition foreseen in Articles 7 and 7a of Directive 65/65/EEC or Article 9 (4) of Directive 75/319/EEC in respect of an orphan medicinal product and without prejudice to the provisions of the law on intellectual property or any other provision of Community law, the Community and the Member States shall not, for a period of ten years, accept another application for a marketing authorisation, nor grant a marketing authorisation or extend an existing marketing authorisation, for the same therapeutic indication, in respect of a similar medicinal product.

2. This period may however be reduced to six years if, at the end of the fifth year, a Member State can establish that the criteria laid down in Article 3 are no longer met in respect of the medicinal product concerned or that the price charged for the medicinal product concerned is such that it allows the earning of an unreasonable profit. To this end, the Member State shall initiate the procedure laid down in Article 5.

3. By derogation to paragraph 1, and without prejudice to intellectual property law or any other provision of Community law, a marketing authorisation may be granted, for the same therapeutic indication, to a similar medicinal product if:

a) the holder of the marketing authorisation of the original orphan medicinal product has given his consent to the second applicant, or

b) the holder of the marketing authorisation of the original orphan medicinal product is unable to supply sufficient quantities of the medicinal product, or

c) the second applicant can establish in the application that the second medicinal product, although similar to the orphan medicinal product already authorised, is safer, more effective or otherwise clinically superior.

4. At the end of the period of market exclusivity, the orphan medicinal product shall be removed from the Community Register of Orphan Medicinal Products.

(5) For the purpose of this Article, a "similar medicinal product" means one which consists of :

- the same chemical active substance or active moiety of the substance, including isomers and mixture of isomers, complexes, esters, other non-covalent derivatives, provided that the pharmacological and toxicological activities of the latter are qualitatively and quantitatively identical to those of the original product,

- a substance with the same biological activity (including those that differ from the original substance in molecular structure, source material and/or manufacturing process) provided that the pharmacological activity of said substance is qualitatively and quantitatively identical to that of the original product,

- a substance with the same radiopharmaceutical activity (including those with a different radionuclide, ligand, site of labelling or molecule-radionuclide coupling mechanism) provided that its diagnostic or therapeutic indications are identical to those of the original product.

5. The Commission shall adopt definitions of 'similar medicinal product' and of 'clinical superiority' in the form of an implementing Regulation, in accordance with the procedure laid down in Article 72 of Regulation (EEC) No 2309/93, at the latest one year after the adoption of the present regulation.

6. The Commission shall, in consultation with the Member States, the Agency and interested parties, draw up detailed guidance for the application of this Article, including the implementing Regulation .

Article 9

Other incentives

1. Medicinal products designated as orphan medicinal products under the provisions of this Regulation shall be eligible for incentives made available by the Community and by the Member States to support the research, development and availability of orphan medicinal products and in particular aid for research for Small and Medium Enterprises provided under the Fifth Framework Programme for Research and Technological Development.

2. Within six months of the adoption of this Regulation, the Member States shall communicate to the Commission detailed information about any the measures they may have enacted to support the research, development and availability of orphan medicinal products. This information shall be updated on a regular basis.

3. Member States shall also consider waiving, in part or in total, the fees to be paid in respect of applications to place orphan medicinal products on the market.

4.3 Within one year from the adoption of this Regulation, the Commission shall publish a detailed inventory of all incentives made available by the Community and the Member States to support the research, development and availability of orphan medicinal products. This inventory will be updated on a regular basis.

Article 10

General report

Within six years of the entry into force of this Regulation, the Commission shall publish a general report on the experience acquired as a result of the application of this Regulation.

Article 11

Entry into force

1. This Regulation shall enter into force on the thirtieth day following its publication in the Official Journal of the European Communities.

2. This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,

For the European Parliament For the Council

The President The President