Topic – Law and policies related to Orphan

Drugs - A comparison of Indian and global

scenario

Name – Aman Kumar Singh

3rd Year B.Sc. LL.B student at Gujarat

National Law University
Introduction

The drugs which are used to diagnose or treat rare medical

conditions such as cystic fibrosis, multiple sclerosis, narcolepsy
etc. are called Orphan drugs. These drugs are called orphan
drugs because pharmaceutical companies do not put enough
efforts in developing a drug which is intended for only a small
number of patients because the amount of money invested by
the pharmaceutical company to develop the drug would not be
recovered by the sale of the drug. They are not economically
profitable to produce without government aid. The rare medical
diseases, which are treated by orphan drugs, can also be called
as orphan diseases. It is a matter of public policy for a nation to
decide to grant orphan status to a disease and work for
development for a drug to cure it. Due to the efforts of the
governments of different nations various medical
breakthroughs have been achieved which would have not been
possible otherwise due to the economical factors related to the
development and research of a drug. In United States of
America and in the region of European Union it is much easier
to get approval for the marketing of orphan drugs. There are
many incentives given by the government such as financial aid
and extended exclusivity period during which only the producer
company has the right to market the drug. These are all done to
attract big pharmaceutical companies to invest in the
development of an orphan drug.

Global statics related to orphan drugs

Till the year 2014 there were 281 orphan drugs which were
being marketed and there were 400 drugs in clinical trial which
were aimed to be orphan drugs. More than 60 percent of the
total number of orphan drugs was biologics i.e. they were
developed from any living organism or contains the
components of a living organism.1 The research and
development of orphan drugs is dominated by the United States
of America, which have more than three hundred orphan drugs
in clinical trial. It is followed by the European Union.
Treatment of cancer is the principal indication of more than 30
percent of orphan drugs in clinical trial. According to a report
released by KuicK Research named "Global Orphan Drug
Market Outlook 2018," there are 600 orphan drugs which are
under clinical trial and about 231 drugs are in phase-2 of
clinical trial. The key market for orphan drugs is U.S.A which
has market of more than 40 billion U.S. dollar.2

Legislation related to orphan drugs around

the world
In the 1980s, particularly in the USA, orphan diseases gained
considerable attention for the first time. The unfolding of the
case of a young boy with Tourette's syndrome was able to
produce a great deal of attention to the pitiful condition of the
orphan disease patients. 'The first set of laws and regulations
devoted to orphan diseases and orphan drugs, in the form of the
Orphan Drugs Act (ODA), was passed in the USA on January
28, 1983, in the wake of the enormous outcry and public
pressure created by the Tourette's syndrome case. 3 Its key goal
was to support orphan disease research and development and
1
https://www.prnewswire.com/news-releases/global-orphan-drug-market-
to-reach-us-120-billion-by-2018-244195511.html

2
Ibid.
to check the effective development and authorization of orphan
drugs. After that, several other nations around the world took
inspiration out of the book of the United States and drafted
their own laws, adapted according to their own countries' needs
and requirements. There are certain form and types of incentive
given by the government of different countries in the
development of Orphan drugs:

 Tax incentives provided by the government.

 Exclusivity provided in marketing rights and patent
protection.
 Subsidies for research and development work.
 Forming a government owned institution or
organisation for the research and development of drugs.

We intend to focus on the current rules and policies in this

section and to provide a comparison between the laws in
different countries.

Legislation in U.S.A
The large number of people suffering from rare diseases
became an important public issue for U.S in late 1970s and
early 1980s. Therefore, there was pressure rising on the U.S.
government from non-governmental organisation like National
Organisation for Rare Disorders (NORD). The Orphan Drug
Act (hereinafter ODA) of 1983 was passed by the U.S.
government, with lobbying from the NORD and many other
different organisations. It was passed to encourage the
pharmaceutical companies to invest in development and
research of drugs for diseases with small number of patients.
According to the ODA, drugs, vaccines and other treating agent
3
https://www.fda.gov/industry/orphan-products-development-events/story-
behind-orphan-drug-act
are granted status of orphan if they were invented for the
purpose of treatment of a disease with less than 200,000
patients among American citizens. Under ODA there are many
incentives given to encourage the development of new drugs
for orphan diseases. Including:

1. Seven year FDA administered ODE (Open Drug Exclusivity)

in market for the pharmaceutical company that invented the
drug,

2. Tax credits up to 50 percent of the research and development

cost.

3. Grants for research and development of drug.

4. Fees of FDA are waived4.

5. There are protocol assistance which helps in fast

development and approval of the drug etc.

Before the enactment of the ODA in 1983 only 10 products in

U.S.A. were approved to be used for the treatment of rare
disease. The increase in the drug research and development
after the enactment of ODA has benefited a large number of
people who were suffering from rare diseases by developing
drugs which have improved the daily life of the patients and by
increasing the life expectancy. It has also benefited the medical
sector by reducing the cost of treatment by avoiding expensive
operations and surgeries.

Cystic fibrosis is a good example of an orphan disease. In early

1980s people suffering from cystic fibrosis rarely lived beyond
their teenage years due to their lung infections. But drugs like
Pulmozyme and Tobramycin, which were developed by the aid
of ODA, have sufficiently increased the life expectancy of a
person suffering from cystic fibrosis. Now people suffering
4
file:///C:/Users/hp/Downloads/CHEUNG-COHEN-ILLINGWORTH.pdf
from the disease live up to 30 years and in some cases even to
fifty years. In the year 2002, the President of America, George
W. Bush signed the Rare Disease Act (RDA) into a law. This
Public Health Service Act was amended by this bill and an
official office of Rare Diseases having federal power was
established.5 Funding for the treatment of people suffering from
rare disease was also increased by this bill. This was an
important step taken by the American government to tackle the
issue of orphan disease.

Legislation in European Union

In the 1990s, the European commission, which is the legislative
body of the European Union, showed increased interest in the
issues related to orphan drugs and diseases because of
mounting pressure by orphan diseases advocacy groups such as
Eurordis. Prior to the EU’s legislation on the orphan drugs in
1999, no other member countries of the EU had any legislation
regarding the orphan drugs. However countries like United
Kingdom, Sweden and France had very broad national drug
policies which encouraged the development of orphan drugs.

In the year 2000, the European Union enacted similar

legislation, Regulation (EC) No 141/2000(Orphan Drug
Regulation ‘ODR’), as that of Orphan Drug Act (ODA) in
U.S.A, which refers the drugs and other medical products
developed for the treatment of rare disease as orphan medical
products. It has undergone only one amendment which was
done in year 2009. According to this amendment an orphan
drug will be stripped of its orphan status in 5 years if it proved
to be extraordinarily profitable to the pharmaceutical
companies. The European Union’s definition of orphan drugs
and disease is broader than that of the U.S.A. because it covers
5
Ibid.
some of the tropical diseases which are generally found in the
developing countries.6 Orphan status is granted to a drug,
vaccine and other medical apparatus if it is invented for the
treatment of a disease which affects not more than 5 in 10,000
people in the European Community. According to ODR, 10
years of market exclusivity is provided by the European
Commission after approval of the drug. The European Union’s
legislation related to orphan drugs and diseases is regulated by
the Committee on Orphan Medicinal Products (COMP) of
the European Medicines Agency (EMA). In the year 2007
EMA and FDA (Food and Drug Administration) agreed to use
a common application procedure for the pharmaceutical
companies for the grant of orphan status to a drug but they
continued to use two separate approval process. 7

Legislation in Japan
About 10 years after the creation of the US-ODA, Japan framed
its own set of orphan drug regulations on 1 October 1993 by
adopting a few unique provisions aimed at encouraging R&D
in the area of orphan drugs.

The new rules of the Japanese Guidelines have proposed that

the status of orphan drugs can be given only to those that meet
the 2 requirements mentioned below:

1. Either an untreatable condition with no current cure would

have to be the target disease or the anticipated effectiveness and
safety of the new medication would have to exceed those
already available.

6
https://www.medicinenet.com/script/main/art.asp?articlekey=11418
7
http://www.pharmasentry.com/news/newsletter.cfm?linkid=CE077395-
1372-54C2-61CFB42D06A278FB
2. The number of patients affected will need to be below
50,000, which translates into an average of 4 per 10,000.8

The grant of orphan drug status is executed by the ministry of

health, labour and welfare on the ground of application
summarising the approximate patient population numbers,
development protocol, pre-clinical, and early clinical studies.

The Japanese government’s incentivization of the R&D into

orphan drugs occurs at two levels:

Administrative Advantages - Prioritised evaluation of

applications related to rare diseases, conveying into fast-track
marketing authorisation and ratification, is required by
Japanese regulations. The prolonged validity of the registration
period of 10 years also provides the sponsors with additional
incentives.

Monetary Advantages - This provides reimbursements of up to

50 percent of the cost of growth in addition to a 6 percent tax
waiver for rare disease research and development. In addition
to these initiatives, the necessary encouragement in orphan
illness and drug research is provided by separate government
funds.9

Legislation in Singapore and Australia

The legislative body of Singapore which came into existence in
1991 have given a definition of orphan drugs and had set up a
legal framework which regulates the import of orphan drugs in

8
https://www.mhlw.go.jp/english/policy/health-medical/pharmaceuticals/
orphan_drug.html
9
Ibid.
Singapore.10 Australia adopted the orphan drug legislation in
the year 1997 with the help and assistance of the FDA of US.
Its legislative framework is mostly based on the US model and
legislations. The incentives provided by the Australian
government are priority evaluation and fees waivers. It does not
provide tax credits, exclusivity period and other grants.11

Legislation in Canada
Canada has no policy or legislation related to orphan drugs
probably because of relatively low level of drug research, its
dependency on the US market and small population.12

Indian perspective on Orphan drugs

Unfortunately, the growing knowledge of orphan diseases and
medicines has not flowed into the consciousness of the
population of developed countries like India. A witness to this
slipshod approach to orphan diseases is the pervasive ignorance
that exists in the Indian medical community. Furthermore a
lack of affected victims cannot be linked to this ignorance. So
far there has been about 450 rare diseases have been identified
in India.13 According to the census of 2011 there were about
72,611,605 people in India affected by rare diseases. 14
10
European Union, Scientific and Technical Options Assessment, Orphan
Drugs (March 1999), online: European Parliament .
11
Austl., Commonwealth, Department of Health and Aged Care, the Orphan
Drug Program and Improving Community Access to Effective Drugs for
Rare Diseases, (Canberra: Australian Government Publishing Service,
December 2001) at 38.
12
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4599885/
13
http://insajournal.in/insaojs/index.php/proceedings/article/view/139
14
https://scholar.google.com/scholar_lookup?
journal=Int+J+Med+Res+Health+Sci&title=Scope+of+patient+registries+fo
r+rare+diseases+in+India&author=R+Mohanty&author=U+Barick&author
Scenarios for many rare diseases in India are changing. Earlier
cystic fibrosis was considered to be non prevalent in India but
latest genetic analysis shows that it is prevalent in India but was
undiagnosed earlier. India has a very high population of person
affected by rare diseases as compared to the world average but
there are no initiatives taken by the government. India still
lacks a policy or legislation ob orphan drugs.15

Millions of Indians continue to suffer from crippling orphan

diseases every day due to the absence of any regulatory
guidance on orphan diseases. A multiple effect is created by the
lack of any viable mechanism or related regulations; the most
critical of which is the non-affordability and inaccessibility of
most of the 400 rare orphan drugs authorized by the US-FDA.
The large population suffering from orphan diseases in India
poses very tremendous opportunities for pharmaceutical
companies to grow their businesses. However the mindset of
the concerned authority, combined with the absence of any
legislation aimed at encouraging orphan drug research and
development, frequently deters the pharmaceutical industry
from showing any interest. Given the reasons for the
fundamental change in the pharmaceutical industry towards
orphan drugs, as well as the potential profitability of this
untapped sector, it is absolutely imperative for the Indian
authorities to wake up and deal promptly with the problem in
our country.

Conclusion

=A+Gowda&author=A+Nair&author=S+Mittal&volume=5&publication_ye
ar=2016&pages=58-61&
15
https://scholar.google.com/scholar_lookup?
journal=Asian+J+Pharm&title=Orphan+regulations+for+orphan+drug+deve
lopment+in+India&author=D+Saikiran+Reddy&author=TM+Pramodkumar
&author=Y+Reddy&author=K+Sirisha&volume=8&publication_year=2014
&pages=130&
It can be said that government of many countries around the
world has taken essential steps for tackling the issue of rare
diseases by making required legislations. United States of
America has played a very major role in development of the
field of orphan drugs. Its Orphan Drugs Act (ODA) of 1983 has
proved to be revolutionary step in the field of medicines which
resulted in many medical breakthroughs. But many developed
countries around the world, for example- Canada, still lack any
policy or legislation on orphan drugs. Many developing
countries with very high number of rare disease patients, for
example- India, also lacks legislation on orphan drugs. As the
number of people suffering from rare diseases is rising around
the world day by day, it is high time for countries like India and
Canada to take necessary steps to tackle the growing problem
of orphan disease.

References

1. https://www.prnewswire.com/news-releases/global-orphan-
drug-market-to-reach-us-120-billion-by-2018-
244195511.html
2. Ibid.
3. https://www.fda.gov/industry/orphan-products-development-
events/story-behind-orphan-drug-act
4. file:///C:/Users/hp/Downloads/CHEUNG-COHEN-
ILLINGWORTH.pdf
5. Ibid.
6. https://www.medicinenet.com/script/main/art.asp?
articlekey=11418
7. http://www.pharmasentry.com/news/newsletter.cfm?
linkid=CE077395-1372-54C2-61CFB42D06A278FB
8. https://www.mhlw.go.jp/english/policy/health-medical/
pharmaceuticals/orphan_drug.html
9. Ibid.
10. European Union, Scientific and Technical Options Assessment,
Orphan Drugs (March 1999), online: European Parliament .
11. Austl., Commonwealth, Department of Health and Aged Care, the
Orphan Drug Program and Improving Community Access to
Effective Drugs for Rare Diseases, (Canberra: Australian
Government Publishing Service, December 2001) at 38.
12. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4599885/
13. http://insajournal.in/insaojs/index.php/proceedings/article/view/139
14. https://scholar.google.com/scholar_lookup?
journal=Int+J+Med+Res+Health+Sci&title=Scope+of+patient+reg
istries+for+rare+diseases+in+India&author=R+Mohanty&author=
U+Barick&author=A+Gowda&author=A+Nair&author=S+Mittal
&volume=5&publication_year=2016&pages=58-61&
15. https://scholar.google.com/scholar_lookup?
journal=Asian+J+Pharm&title=Orphan+regulations+for+orp
han+drug+development+in+India&author=D+Saikiran+Red
dy&author=TM+Pramodkumar&author=Y+Reddy&author=
K+Sirisha&volume=8&publication_year=2014&pages=130
&