European Union - In a bid to encourage the pharmaceutical industry to invest in developing treatments for diseases which are rare or not economically viable, legislation has been adopted to stimulate new treatment options for patients. Pharmaceutical companies may now apply to the European Agency for the Evaluation of Medicinal Products (EMEA) to designate orphan medicinal products. Under the new legislation, companies will be able to request reductions in fees for market authorizations and for alterations to the approval after registration. Companies whose products are granted orphan drug status will be entitled to a 10-year period of market exclusivity.

The prospect of obtaining a 10-year period of market exclusivity for orphan medicinal products in the European Union will provide a strong incentive for sponsors. Pharmaceuticals intended to treat diseases which may have a high prevalence in developing countries, but which are classified as rare in the European Union, such as malaria, may also be designated as orphan medicinal products. A Committee, which includes representatives of patient organizations, has been created to evaluate whether a potential medicine meets the criteria of an orphan drug.

Similar legislation was adopted in the United States in 1983, where the application of tax incentives for companies proved to be effective. However, tax incentives are not possible in the European Union due to the absence of a centralized system of taxation.

Reference: European Commission Press Release. Commission takes measures to help rare disease patients. http://www.eudra.org 27 April 2000.