Opinion of the Economic and Social Committee on the 'Proposal for a European Parliament and Council Regulation (EC) on orphan medicinal products'
Date: 1999-01-27
Institutions: European Economic and Social Committee
Subjects: ESC opinion, medicinal product, pharmaceutical legislation

12.4.1999

EN

Official Journal of the European Communities

C 101/37

3.2.3. L a u n c h i n g
c a m p a i g n s

a w a r e n e s s - r a i s i n g

The Committee could support this proposal — even
at a political level — through the leading players it
represents. The Commission should envisage a specific
role for the social partners and other economic players
in promoting coordinated campaigns. It could also
sponsor and/or co-finance such campaigns. Likewise

the Commission should introduce the concept of
awareness-raising and prevention of undeclared work
as a method of benchmarking in the guidelines for
employment? Why was this point not raised in its
recent communication on employment(1)?

(1) Communication from the Commission — From guidelines
to action: the national action plans for employment.

Brussels, 27 January 1999.

The President

of the Economic and Social Committee

Beatrice RANGONI MACHIAVELLI

Opinion of the Economic and Social Committee on the ‘Proposal for a European Parliament
and Council Regulation (EC) on orphan medicinal products’ (1)

(1999/C 101/10)

On 23 October 1998 the Council decided to consult the Economic and Social Committee,
under Article 100a of the Treaty establishing the European Community, on the above-mentioned
proposal.

The Section for Employment, Social Affairs, and Citizenship, which was responsible for
preparing the Committee’s work on the subject, adopted its opinion on 8 December 1998. The
rapporteur was Mr Colombo.

At its 360th plenary session (meeting of 27 January 1999), the Economic and Social Committee
adopted the following opinion by 121 votes to two with three abstentions.

1.

Introduction

Following a lengthy preparatory phase, the Com-
1.1.
mission has presented a draft regulation which sets out
to meet a strongly-felt need on the part of millions of
patients: to create favourable conditions at Community
level for research on and development and marketing of
medicines, known as orphan medicinal products, to
treat rare diseases.

1.2.
Patients’ associations have for years been calling
for this initiative in order to counter what is now
the unacceptable marginalization experienced by such
patients, who are denied equality in terms of a fundamen-
tal right of all citizens: the right to health.

1.3.
The proposal also comes in response to the
decision taken under the Community framework for
action in public health, which identified rare diseases as
one of the priority areas for European Union action (2).

1.4.
Given continuing medical progress — of which
medicines are an essential element — and its beneficial
effects on the quality and length of life, it is now
unacceptable that a sector of the population should be
excluded from this process.

The pharmaceutical

1.5.
spon-
taneously interested in meeting the needs of such
patients, since the profit principle which governs its
choices and programmes corresponds to market criteria.

industry is not

(1) OJ C 276, 4.9.1998, p. 7.

(2) OJ C 388, 31.12.1994; OJ C 203, 3.7.1997 — ESC opinion

in OJ C 19, 21.1.1998.

C 101/38

EN

Official Journal of the European Communities

12.4.1999

1.6.
It is however understandable that the small scale
of the market, invariably involving only a small number
of patients, should not be attractive to an industry which
expects returns on the heavy investment required for
research and development of innovative medicines: the
cost is currently in the region of ECU 200 million (1).

2. The aim of the proposal

The primary aim of the Commission proposal,
2.1.
which is based on Article 100a of the EC Treaty and
takes the legal form of a Regulation, is then to create
conditions likely to encourage the pharmaceutical indus-
try and its research centres to tackle the issue of rare
diseases adequately, as already happens in the USA and
Japan.

2.2.

The two main features of the proposal are:

— the definition of harmonized criteria and the estab-
lishment of a Community procedure for the desig-
nation of orphan medicinal products;

— the provision of incentives for the research, develop-
ment and bringing to the market of pharmaceutical
products to treat rare diseases.

The proposal identifies two distinct criteria for

2.3.
the designation of orphan medicinal products:

— a predominant epidemiological criterion, i.e. the
incidence of a disease on a given population. Under
the proposal, this criterion would apply when a
disease affects less than five per ten thousand persons
within the Community population, and it can be
shown that no satisfactory method of treatment
exists;

— an economic criterion, depending on the expected
non-profitability of a product which is necessary
to treat a life-threatening or seriously debilitating
communicable disease in the Community.

A number of supports are provided under the

2.4.
incentive arrangements:

— the Community guarantees access to the entire EU
market via a centralized authorization procedure for
designated orphan medicinal products, the main
incentive being a ten-year period of market exclu-
sivity throughout the Community, subject to the

(1) Communication from the Commission to the Council and
the European Parliament on the outlines of an industrial
policy for the pharmaceutical sector in the European
Community (COM(93) 718 final).

‘reduction clause’ (2), to measures to protect patients’
interests and to public health imperatives (3);

— the costs arising from the overall centralized author-
ization procedure for these medicines can be partially
or fully defrayed by the Community budget;

— support for DG XII’s specific Community research
programmes, as implemented under the previous
‘Biomedicine and Health’ (Biomed 2) Programme
and as planned in the first specific programme
‘Improving the quality of life and the management
of living resources’ of the fifth research programme
(1998-2002), together with the DG V action pro-
gramme on rare diseases.

2.5.
It has been decided to use the instruments put in
place by Regulation (EEC) No 2309/93 (4) to evaluate
applications for the designation of orphan medicinal
products: specifically the European Agency for the
Evaluation of Medicinal Products (EMEA). The London-
based EMEA, whose work the ESC has followed since
its inception, certainly possesses the infrastructure and
professional skills required.

2.6.
Designation of orphan medicinal products is to
be carried out by a standing committee set up for this
purpose within the EMEA, made up of experts appointed
by the Member States on the basis of their proven
experience in the field of rare diseases, accompanied by
six Commission appointees: three representatives of
patients’ associations and three members recommended
by the EMEA .

3. General comments

3.1. Foreword

The ESC welcomes the Commission proposal
3.1.1.
and supports the basic principles and objectives pursued
by the draft regulation. This positive judgement —
subject to the reservations set out below — is based on
the view that the regulation represents an important

(2) Article 8(2) provides that this period may be reduced to
six years if a product no longer meets the criteria for
designation, or if the price charged is such as to allow
unreasonable profits.

(3) Article 8(3) permits marketing authorization for a similar
medicinal product with the same therapeutic indication in
certain cases.

(4) OJ L 214, 24.8.1993 — ESC opinion OJ C 269, 14.10.1991.

12.4.1999

EN

Official Journal of the European Communities

C 101/39

move in the direction of solidarity with patients who
are left at the margins of medical advances, because they
suffer from rare diseases.

Europe at the centre of solidarity with the developing
countries, and should constitute Europe’s preferred
approach in the future.

3.1.2.
The Committee therefore considers that desig-
nation of orphan medicinal products — while still
subject to the criteria under Article 3 — should be
extended to cover specific indications of active sub-
stances which have already been authorized for other
indications, as well as medicines for treating debilitating,
chronic or life-threatening diseases in the Community.

3.1.3.
The Committee believes that the choice of a
Community dimension (1) is well-suited to the small
number of patients concerned and the consequent low
capacity for return on investment. Such an outcome
would be hard to achieve at purely national
level.
Nevertheless, the proposal leaves scope for individual
Member States to encourage national
initiatives by
introducing, in particular, tax incentives for research.

3.1.3.1.
The Committee therefore calls upon the
Commission to draw up a recommendation promoting
the introduction of such incentives.

As stated previously, in its opinion on the
3.1.4.
for a European Parliament and Council
Proposal
Decision adopting a programme of Community action
1999-2003 on rare diseases in the context of the frame-
work for action in the field of public health (2), the
Committee endorses the disease incidence proposed
(diseases with a generally-accepted prevalence in the
total Community population of less than five per 10 000).

3.1.5.
The Committee welcomes the fact that three
members of the committee for orphan medicinal prod-
ucts are representatives of patients’ organizations, in
view of their role as communicators and mediators
between researchers, the industry and patients.

3.1.6.
The ESC believes that the progress generated
by a renewed commitment by Community research to
the specific sector of rare diseases — some of which are
widespread in other parts of the world — could make a
decisive contribution to improving living conditions in
the developing countries, where investment in research
is almost completely lacking. Such a move would place

(1) Community actions relating to this proposal: 1) OJ C 388,
31.12.1994; 2) COM(93) 718 final; 3) OJ C 350, 30.12.1995;
4) COM(93) 276 final, OJ C 230, 26.8.1993 — ESC opinion
OJ C 34, 2.2.1994; 5) OJ C 203, 3.7.1997 — ESC opinion
in OJ C 19, 21.1.1998; 6) OJ C 306, 8.10.1997 — ESC
opinion in OJ C 95, 30.3.1998; 7) COM(98) 305 final;
8) OJ L 213, 30.7.1998).

(2) Proposal: OJ C 203, 3.7.1997 — ESC opinion in OJ C 19,

21.1.1998.

3.1.7. While endorsing the priority given to human
patients, on the grounds of urgency, the Committee feels
that the question of how to foster the R&D and
marketing of veterinary medicinal products should be
tackled in the future.

3.2.

Incentives

3.2.1.
A careful assessment needs to be made as to
whether the content of the proposal and the incentives
it offers are appropriate and sufficient to provide the
pharmaceutical industry with the necessary conditions
for encouraging a commitment consistent with patients’
legitimate expectations, and to stimulate basic research
in the university sector in tandem with applied research
in the industrial sector.

The Committee believes that the proposed
3.2.2.
incentives, which need adequate support through specific
research programmes, offer advantages to companies
engaged in the field of rare diseases. It views the initiative
and the ensuing investment as helping to create new
businesses and highly-skilled employment.

3.2.3.
The Commission proposal should therefore
provide for incentives for an appropriate level of research
and marketing with a view to making the European
industry — thus far penalized by the lack of legislation
on orphan drugs — more competitive.

The ESC approves the content of Article 6
3.2.4.
which offers assistance in the development of protocols
for the clinical experimentation necessary in order to
obtain authorization by demonstrating the quality,
safety and efficacy of the medicinal product. This
assistance will be of particular value to SMEs, allowing
the necessary medicines to be made available to patients
as soon as possible.

The ‘reduction clause’ contained in Article 8(2),
3.2.5.
reducing the period of market exclusivity from ten to
six years at the request of a single Member State, should
not be seen as diminishing the incentives. Rather, it
should be viewed as an exceptional measure, rep-
resenting a safeguard in any cases where orphan drugs
prove to be ‘blockbusters’ during the exclusivity period.

It is nevertheless felt that the reference in this
3.2.5.1.
article to prices could lead to difficulties in implemen-
tation.

In the Committee’s view, the derogations under
3.2.6.
Article 8(3) constitute a proper measure in terms

C 101/40

EN

Official Journal of the European Communities

12.4.1999

of protection of patients’ interest and public health
imperatives since, inter alia, the Article should ensure
sufficient availability of medicines to meet patients’
needs.

3.4.2.
The ESC intends to put pressure on the Com-
mission to ensure that this measure serves as a turning-
point in removing the barriers which continue to hamper
the free movement of medicinal products in the EU, as
argued in several previous Committee opinions.

automatically

confer market

3.2.7.
The Committee agrees that designation does
exclusivity or
not
entitlement to priority. It is the authorization of the
medicinal product which entails exclusivity, rewarding
the most effective and efficient research. It agrees that
there should be no obstacles to further research into
medicines with the same therapeutic indication, which
may be authorized only if they demonstrate greater
safety and practical efficacy.

3.3. Resources

3.4.3.
Firstly, efforts must be made to secure the early
adoption of the Directive on good clinical practice (1)
for the pursuit of clinical experimentation with medicinal
products for human use and to secure its application in
the individual Member States, in order to guarantee
rigorous protection of the individuals on whom orphan
drugs are tested, and to ensure the quality, safety and
efficacy of these products.

3.4.4.
In keeping with points 2.7 and 3.4.2 of its
opinion on good clinical practice, the Committee calls
for a specific procedure to speed up the launch of clinical
experiments on orphan medicines and completion of
protocols, so as make these drugs available to patients
as soon as possible.

3.3.1.
The first point to be looked at must be the size
of the resources earmarked for the programme. The
proposal’s ambitions must be matched by availability
of resources. Initial examination suggests that these
resources are not enough to prime the entire scheme
properly.

4. Specific comments

4.1. Article 3(1)

3.3.2.
The ESC fully supports the possibility of access
to the centralized procedure and, with the aim of
encouraging companies to engage in research and
development of orphan medicinal products, it would
urge that the inherent costs to companies of the entire
EMEA process be kept as low as possible, and that
thought be given to fully defraying the whole cost from
the Community budget.

3.3.3. More particularly, given that, in the experi-
ments which have been underway for some time, most
demand is from SMEs, the Commission should make
specific arrangements for individual SMEs, or groups of
SMEs, to use Community funds, which should not be
limited to those provided under the fifth framework
programme for research and technological development.

3.4. Consistency with other Community policies

The Committee welcomes the fact that the
3.4.1.
draft regulation presents a comprehensive action pro-
gramme for combating rare diseases, encompassing and
coordinating the work of different DGs (III - V - XII). It
is hoped that this coordination will prove more broadly
based and more effective in generating the maximum
Community ‘added value’.

Add the following sentence at the end ‘This also applies
to new indications of known substances’.

4.2. Article 3(2)

The expression ‘a life-threatening or seriously debilitat-
ing communicable disease’ may prove too narrow
or ambiguous. The following is therefore suggested:
‘debilitating, chronic or life-threatening diseases’.

4.3. Article 8(3)(c)

Terminological difficulty in interpreting the term ‘clini-
cally superior’.

4.4. Article 8(5)

The definition given of ‘similar medicinal product’
would appear too narrow, failing to define the concept
adequately.

4.5.
or difficult

In order to prevent wording which is ambiguous
the
to verify reducing the interest of

(1) Proposal: OJ C 306, 8.10.1997 — ESC opinion in OJ C 95,

30.3.1998.

12.4.1999

EN

Official Journal of the European Communities

C 101/41

companies concerned, the ESC recommends that these
terms be deleted from the articles of the proposal and

that more detailed guidelines be provided at a later
stage.

Brussels, 27 January 1999.

The President

of the Economic and Social Committee

Beatrice RANGONI MACHIAVELLI

Opinion of the Economic and Social Committee on the ‘Proposal for a Council Regulation
(EC) amending Regulation (EEC) No 1408/71 on the application of social security schemes to
employed persons, to self-employed persons and to members of their families moving within
the Community and Regulation (EEC) No 574/72 laying down the procedure for implementing
Regulation (EEC) No 1408/71’

(1999/C 101/11)

On 29 October 1998, the Council decided to consult the Economic and Social Committee,
under Article 198 of the Treaty establishing the European Community, on the above-mentioned
proposal.

The Section for Employment, Social Affairs and Citizenship, which was responsible for
preparing the Committee’s work on the subject, adopted its opinion on 7 January 1999. The
rapporteur was Mr Lemmetty.

At its 360th plenary session (meeting of 27 January 1999) the Economic and Social Committee
adopted the following opinion by 124 votes in favour and two votes against, with two
abstentions.

1. Gist of the Commission proposal

1.1.
The Commission has put forward a proposal for
a Council Regulation (EC) amending Regulation (EEC)
No 1408/71 on the application of social security schemes
to employed persons, to self-employed persons and to
members of their families moving within the Community
and for Miscellaneous Amendments in 1998 to Regu-
lation (EEC) No 574/72 laying down the procedure
for implementing Regulation (EEC) No 1408/71. The
purpose of the proposal is to update these Community
Regulations to take account of changes to national
legislation, certain bilateral agreements concluded
between Member States and the possibility of amend-
ments to the Annexes of the implementing Regulation
being made by the Commission.
1.1.1.
Under the proposal, orphan’s pension benefits,
which are currently calculated on the basis of the
provisions of Chapter 8 of Regulation No 1408/71,
would be transferred to Chapter 3 and thus become
subject to the provisions on pensions. The rules provided
for in Chapter 8 would then only apply to family
allowances for orphans.
1.1.2.
It is also proposed that Article 122 of the
implementing Regulation No 574/72 be amended to
enable the provisions contained in the Annexes listed in
Article 122 to be amended by a Commission Regulation
rather than by the standard Regulation procedure
applied at present.

1.1.3.
The other proposed amendments concern tech-
nical changes and changes to the provisions on Member
States in the Annexes.

2. General comments

The Committee welcomes the proposal, subject
2.1.
to certain comments. The Committee would reiterate
its view that proposals must satisfy the need to reform
and update regulations that are designed to facilitate
coordination of social security systems.

2.2. However, the Commission has very little to say
about the reasons for the proposal and its effects, and it
is not clear from the proposal what the actual effects of
the amendments are.

2.3.
The Committee endorses the stated aim to
simplify and speed up the administrative procedure. The
Committee has suggested this on a number of occasions
and hopes that the simplification of the entire body of
Community law will be continued. The Committee also
awaits the Commission proposal for an overall reform
of the regulation. Simplification must not, however,
take place at the expense of beneficiaries.