UK physicians claim loopholes are undermining the Orphan Drug Regulation’s intended purpose
A series of articles published in the 16 November issue of the British Medical Journal (BMJ) depict perceived exploitation of Regulation (EC) No 141/2000 (the Orphan Drug Regulation) - legislation intended to stimulate the development of medicinal products for rare diseases by providing incentives to the biopharmaceutical industry. An Open Letter from 20 UK neurologists and paediatricians addressed to Prime Minister David Cameron and Health Secretary Andrew Lansley calls attention to the practice of "licensing drugs that are already available rather than developing new treatments." Citing the case of the product 3,4-diaminopyridine, used for rare diseases Lambert-Eaton myasthenic syndrome and congenital myasthenic syndrome, available on an unlicensed basis for about €1000 per patient/year, but which is now being licensed, rebranded and remarketed to the tune of between €45,000-€82,000 per patient/year, the authors call for "urgent review" of the Orphan Drug Regulation which they feel can, in such cases, "...severely limit[] the availability of existing treatments". Another article in the same issue queries What Makes an Orphan Drug? and synthesises how certain loopholes in the Orphan Drug Regulation can lead to price gouging. Meanwhile, an Editorial further defines the Problem of the Orphan Drugs by furnishing other examples of repackaging, rebranding or recycling existing chemicals in order to gain profits. Evoking the "unintended consequence of exploitation of the rules for profit" the authors concede that while industry needs encouragement to develop orphan products, it must "accept value based pricing when it arrives in the next [UK] Pharmaceutical Price Regulation Scheme." The authors call for a mechanism similar to the French Agence Générale des Equipements et Produits de Santé, which allows for the legitimate fabrication and distribution of unlicensed rare disease products when a licensed product is not available. They also state that physicians should be allowed to "prescribe a drug that meets the individual patient's needs but is not licensed for the specific indication, even if a licensed medicine exists for the same indication". Other stakeholders, however, point out the benefits of licensing - including the obligation to monitor product safety and efficacy and track disease outcome. Licensing also provides vital post-marketing information and helps capture elusive data essential to such small populations.
What is "fair"?
Another BMJ article on the topic explores whether a Competition Law investigation is needed to determine whether orphan drug pricing is fair. Such an investigation could look at profit margins, return on investment, or manufacturer cost base, for example. Asserting that "current high pricing hinders access to treatment and contravenes the aim of the Orphan Regulation", the authors lament the fact that the Orphan Drug Regulation failed to "create an oversight body to regulate prices and protect consumers from market abuse, by contrast with other state sanctioned monopolies". Article 102 of existing competition law "prohibits abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it. ... Such abuse may, in particular, consist in: (a) directly or indirectly imposing unfair purchase of selling prices or other unfair trading conditions...". However, no conclusive definition of "fair" is provided within Article 102. Despite this, the authors assert that "...the Article 102 investigation route could offer the most direct and effective mechanism to curb excessive pricing even if no abuse in ultimately found". It must be remembered, as stakeholders would certainly agree, that "A sufficient profit motive must be preserved to ensure that the industry continues to attract the necessary capital to fund drug development". The authors conclude by suggesting that "while competition law potentially offers a direct and effective route to address the difficult problem of orphan drug pricing, it may also inspire a less contentious resolution: the prospect of regulatory action could motivate a constructive dialogue on acceptable pricing levels, and even result in further EU orphan legislation."
Apples and oranges
One must be careful not to mix apples with oranges. The Orphan Drug Regulation was designed to promote the research and development of orphan medicinal products at the EU level with the understanding that price issues would continue to be determined at the Member State-level. The complex question of pricing has, in fact, been under scrutiny at the EU level since the Orphan Drug Regulation was adopted in 2000, and continues to be a priority for policy makers and other stakeholders. Recent evidence of this can be found in the March 2010 Call for Tender concerning the creation of a mechanism for the exchange of knowledge between Member States and European authorities on the scientific assessment of the clinical added value for orphan medicines (learn more). Furthermore, the EU Health Pharmaceutical Forum Final Conclusions and Recommendations, Improving Access to Orphan Medicines for All Affected EU Citizens put forward ideas to ensure the timely and equitable access for all EU citizens to orphan medicines (learn more). Finally, the proposal for the creation of a Working Party within the European Medicines Agency for the assessment of the Clinical Added Value of Orphan Drugs (CAVOD) seeks to increase collaboration between Member States and EU-level authorities. The BMJ articles serve as a reminder to move forward the process of making orphan products accessible and affordable while continuing to encourage their development.