December 04, 2013 | By Márcio Barra
The European medicines Agency (EMA) announced yesterday that, starting January 2014, there will be greater fee-reduction rates for orphan medicines in 2014 for big companies, something that was previously only in place for micro, small or medium-sized enterprises (SMEs).
Starting next year, non-SME companies submitting a marketing application for an orphan drug will be entitled for a 75% fee reduction for non-paediatric-related initial and follow-up protocol assistance (currently, the reduction is only of 40%); a 10% fee reduction for initial marketing-authorisation applications (currently no fee reduction) and a 100% fee reduction for pre-authorisation inspections (currently no fee reduction).
The 100% fee waiver for paediatric-related initial and follow-up protocol assistance will remain in 2014.
As for SME, the incentives will stay the same, such as:
- Free initial and follow-up protocol assistance;
- Free initial marketing-authorisation applications;
- Free pre-authorisation inspections;
- Free post-authorisation applications and annual fees in the first year of marketing authorisation.
These incentives are intended to stimulate the research and development of drugs for rare diseases. The orphan drug market was worth more than $50 billion in 2011, and its rate of growth was bigger in the last ten years than the traditional drug market. Big companies are opening rare disease units to meet the demands of the estimated 25 million people in the US alone that live with some sort of orphan disease. In Europe, an Orphan drug is for life threatening or chronically debilitating conditions, whose prevalence in the EU is not more than 5 in 10,000.
Due to the low prevalence of some of the diseases, the orphan drug market is dominated by high prices, including Alexion Pharmaceuticals’ Soliris (eculizumab) at USD 400,000/year per patient for paroxysmal nocturnal hemoglobinuria and Vertex Pharmaceuticals’ Kalydeco (ivacaftor) at USD 294/year per patient for a selected cystic fibrosis patient population. For more on the pricing debate, read this excellent Financial Times article.