Orphan drugs are intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating disease condition affecting an extremely small proportion of the population. Without incentives it is unlikely that the marketing of the product would generate sufficient return of investment to justify the necessary investment.
Today descriptions exist of about 7,000 rare diseases which each year affect some 30 million Europeans, or 6-8 per cent of the population of the EU.
A special legislation, Regulation (EC) No 141/2000, has been introduced to stimulate research and development, making it possible to develop orphan drugs. The rationale behind this regulation is the basic principle that all patients suffering from rare diseases are entitled to treatment of the same quality as patients with more common diseases.
The United States was the first country to introduce special legislation for orphan drugs, the Orphan Drug Act (ODA) in 1983. Ten years later, the number of approved orphan drugs had increased tenfold. The US Orphan Drugs Act was followed by similar laws in Japan in year 1993, Australia in year 1998, and the EU in year 2000.
These legislations have proved successful, helping millions of people suffering from rare diseases to live a better and longer life. One of the key characteristics of these regulations is market exclusivity for an approved orphan drug. In the EU exclusivity means that the company obtains sole rights for the product and the indication in the market for ten years after the product has been approved for sale. The legislation protects the product and the companies against copies, but not against new, better products, which benefit the patients