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Why being an “Orphan” can be a benefit for pharmaceuticals

Date: 21 January 2020
Author: John Kotsanas
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John Kotsanas is a technical specialist from AthenaIP, associated with FB Rice. AthenaIP is a specialist searching and watching service, providing searching skills in all areas of intellectual property.

Regulatory Exclusivity is a form of Intellectual Property (IP) protection available for pharmaceutical compounds, which is provided by numerous jurisdictions across the globe.  Recently, we published an article considering the types of Regulatory Exclusivity available for newly developed pharmaceutical compounds (see IP Rights in the Pharmaceutical sector: Not exclusively the domain of patents).  The focus of this article will be on an additional form of Exclusivity which exists, that applicable for Orphan Diseases.
 

What is an Orphan Disease?

The term Orphan Disease can be considered synonymous to that of a “Rare Disease”. In practice this refers to a disease where the number of people affected comprises only a small proportion of the overall population. What constitutes an Orphan Disease varies jurisdictionally, with some jurisdictions applying a definition based on a fixed ratio of the population, while others apply a definition based on the overall number affected within the population.  This can result in some diseases being designated Orphan within certain jurisdictions, while not being considered as such in others.
 
A result of this low population prevalence, as well as the high cost of developing new pharmaceuticals, is that pharmaceutical companies have historically invested fewer resources to discovering treatment options for Orphan Diseases.  To compensate for the perceived economic “unattractiveness”, some jurisdictional authorities offer incentives to induce research into Orphan Disease treatments.  One such incentive is providing additional Exclusivity term for pharmaceutical compounds which receive approval to treat Orphan Diseases.  This is known as Orphan Exclusivity.
 

What is Orphan Exclusivity?

In our previous article we discussed the types of Regulatory Exclusivity applicable for newly approved pharmaceutical compounds.  Orphan Exclusivity relies on a similar set of principles, and can be considered functionally similar to that of Market Exclusivity.  Several facets unique to Orphan Exclusivity are noted below:
  1. Orphan Exclusivity prevents others from marketing the compound in question for that approved Orphan Disease. What constitutes the “compound” can differ based on the jurisdiction, with some jurisdictions only permitting minor variations (e.g., different salts, esters or glycosylation patterns) while other jurisdictions permit “similar” entities (products which many not share all the same molecular structural features but act via the same mechanism for treating the same Orphan Disease). This contrasts the overall protection for the compound “as a whole” provided by Regulatory Exclusivity applicable to newly approved pharmaceutical compounds.
  2. The initiation of the Orphan Exclusivity term begins at the regulatory approval date for the treatment of that Orphan Disease.  This however, does not have to be the same date as the first approved use of the compound. In many instances treatment for the Orphan Disease is approved years later, following subsequent clinical studies. 
  3. The term provided by Orphan Exclusivity is independent of other Exclusivities, existing or expired, the compound may be subject to.
  4. A compound can have numerous Orphan Disease approvals, each of which will have their own independent Orphan Exclusivity term running concurrently. 
  5. It is possible to have an Orphan Exclusivity term exceed the duration of the Regulatory Exclusivity term provided when the compound was first approved.
A list of provisions available in selected jurisdictions can be found in the table below:
 

Jurisdiction

Orphan Exclusivity provisions

Australia No Orphan Exclusivity provisions currently exist.
Europe
(European Medicines Agency)
10 years Orphan Exclusivity from initial approval of that Orphan Disease indication.
Japan

10 years Post Marketing Surveillance (PMS) from initial approval of that Orphan Disease indication.
*Japan’s PMS provisions are functionally similar to Regulatory Exclusivity provided in other jurisdictions.

New Zealand  No Orphan Exclusivity provisions currently exist.
United States 7 years Orphan Exclusivity from initial approval of that Orphan Disease indication.
 

 

Conclusion:

As set out above, some jurisdictions offer significant periods of Orphan Exclusivity as an incentive for pharmaceutical companies to develop therapies for Orphan Diseases.  These incentives apply irrespective of whether the compound is specifically developed for that condition, or if a previously known compound is subsequently approved for an Orphan Disease.  The additional Exclusivity term is linked to the regulatory approval date for the treatment of the Orphan Disease, meaning it is possible for a pharmaceutical compound to obtain protection for an Orphan Disease which exceeds the Exclusivity term it received at its first approval. This additional Exclusivity can be crucial as it may prevent a rival company from marketing their generic version of a reference pharmaceutical compound for the treatment of that Orphan Disease. Hence, a pharmaceutical company can maintain a monopoly for treating an Orphan Disease with its pharmaceutical compound, allowing it to attempt to obtain a desired economic return of investment without fear of competition.
Tags:  Pharmaceuticals, IP rights, IP protection, R&D, patents, investment incentive, regulatory exclusivity, data exclusivity, market exclusivity, provisions, intellectual property

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