How the EU Pharma Package will reshape orphan drug regulation

The EU Pharma Package provides for far-reaching changes to the current regulatory regime for orphan drugs. Until now, orphan drug legislation has mainly been enshrined in Regulation (EC) No. 141/2000 on orphan medicinal products and in Regulation (EC) No. 847/2000. The Proposed Regulation integrates orphan drug legislation, and as a result repeals and replaces Regulation (EC) No 141/2000.^[1] The central provisions relating to orphan drugs can be found in Articles 63 to 73 of the Proposed Regulation. 

For innovators, this means that the new regime is more or less an update of Regulation (EC) No. 141/2000, rather than a readjustment of incentives and obligations.

Recognition of special status remains central

As is already the case under Articles 3 and 5 of Regulation (EC) No 141/2000, the draft orphan drug status requires official recognition of the medicinal product as an orphan medicinal product. The relevant substantive requirements are set out in Article 63 of the Proposed Regulation. Specifically, a medicinal product is designated as an orphan drug if:

• it serves to diagnose, prevent or treat a life-threatening or chronically debilitating condition;
• the condition affects not more than 5 in 10,000 persons in the Union; and
• either there is no satisfactory method for diagnosing, preventing or treating the condition that has been authorised in the Union, or the product has a significant benefit compared to an existing method.

The European Commission also has the power to clarify these requirements by means of implementing acts.

The Proposed Regulation further provides for a sub-category of orphan drugs named “breakthrough orphan medicinal product” in Article 70, where:

• there is no medicinal product authorised in the Union for the orphan condition; and
• the use of the orphan medicinal product results in a clinically relevant reduction in disease morbidity or mortality for the relevant patient population.

What is new is that the profitability criterion previously applied in the regime of Regulation (EC) No. 141/2000 is no longer applicable. The recognition of orphan drug status can therefore no longer be based on the fact that, without incentives, placing the medicinal product on the market in the EU would probably not generate sufficient return to justify the necessary investment.

According to the Proposed Regulation, an orphan drug designation shall be valid for seven years only and can be extended where evidence of ongoing and promising studies is provided (Article 66 of the Proposed Regulation).

In addition, orphan drug status can be transferred to another sponsor, subject to prior approval by the European Medicines Agency (EMA) (Article 65 of the Proposed Regulation).

Market exclusivity becomes more differentiated with the EU Pharma Package

The main economic incentive remains market exclusivity, during which the EU and its Member States are not allowed to accept or grant marketing authorisation applications for similar medicines for the same therapeutic indication.

This is where the biggest change compared to the regulations in Regulation (EC) No. 141/2000 can be found. The new legal framework follows a differentiated approach (Article 71 of the Proposed Regulation):

• While the previous regime under Regulation (EC) No. 141/2000 was based on ten years of market exclusivity for an indication, the current draft status in Article 71 of the Proposed Regulation provides for only nine years for orphan drugs.
• For certain particularly innovative orphan drugs or orphan drugs that address a high unmet medical need (so-called "breakthrough orphan medicinal products"), the term of protection is to be eleven years.
• For orphan drugs that have been approved on the basis of bibliographic data, market exclusivity of only four years applies.

The Proposed Regulation also provides for an extension of twelve months if the marketing authorisation holder obtains a marketing authorisation for one or more new therapeutic indications for a different orphan condition at least two years before the expiry of the exclusivity period (Article 72 para. 1 of the Proposed Regulation). Such a prolongation may be granted twice. The extension option does not apply to orphan medicinal products that have been authorised on the basis of bibliographic data.

This is another major difference with the previous regulations. Previously, market exclusivity could be obtained separately and in full for each therapeutic indication for an orphan drug. Now, subsequent approvals for other indications can only lead to an extension of the market exclusivity period.

According to the previous legislation, however, exclusivity could be reviewed after six years and shortened under certain conditions. The Proposed Regulation no longer provides for this six-year review.

Furthermore, the Proposed Regulation provides that the submission, validation and examination of marketing authorisation applications for similar medicinal products is permitted in the last two years before the expiry of market exclusivity for orphan medicinal products (Article 71 para. 6 of the Proposed Regulation). Generics and biosimilars can therefore enter the market immediately after the expiry of market exclusivity and thus earlier than before.

The incentives remain attractive, the obligations remain high

In addition to exclusivity, the EU Pharma Package and the Proposed Regulation provide further funding instruments for orphan drugs. This includes, in particular, "protocol assistance", i.e. scientific advice from the EMA on studies, development strategy, environmental aspects and proof of additional benefits. This is particularly relevant for small and medium-sized enterprises (SMEs) because it allows regulatory dead ends to be identified much earlier. In addition, there are planned fee reductions and the basic eligibility for funding for EU-wide and national research and development measures.

However, the Proposed Regulation makes it clear that orphan drugs will not be privileged in terms of current obligations. Marketing authorisation holders are subject to the same pharmacovigilance, risk management, continuous updating of product information and notification of start of marketing, distribution interruptions or withdrawals as other centrally authorised products. Subsequent requirements, such as further safety or efficacy studies, also remain possible.

Companies should sharpen their orphan drug strategy now

Overall, the Proposed Regulation indicates that regulatory protection for marketing authorisation holders of orphan medicinal products will be weaker in the future. Innovators of orphan drugs should therefore see the Proposed Regulation as an invitation to prepare early and in a structured manner.

For example, precise control of the timing and sequence of further indication developments becomes more important, because additional orphan indications no longer justify independent new exclusivity periods, but only lead to an extension of the current deadline under strict conditions. Against this background, it should make sense in line with the legislative objective to focus on "breakthrough" medicines for rare diseases that are eligible for a maximum market exclusivity of eleven years.

Companies should also be prepared for generics and biosimilars to enter the market earlier.

In the future, forward-looking scientific and economic planning of market exclusivity, additional indications, possible renewals and the competition window will therefore be of considerable importance in the last two years of protection.

Position in the United Kingdom

In parallel to the changes in the EU, significant UK reform is also anticipated with the intention of promoting the discovery, development, and approval of therapies for rare diseases. In November 2025, the MHRA proposed a new Rare Disease Therapies Regulatory Framework to “… support earlier, more frequent, and iterative engagement with developers, providing structured regulatory flexibility where conventional approaches are not feasible”.^[2] A public consultation on the proposed framework was launched in May 2026 and will run until 30 July 2026, with the MHRA aiming to finalise a refined and implementable model by the end of 2026.^[3]
 

^[1] Commission Regulation (EC) No 847/2000 shall continue to apply unless and until repealed as regards orphan medicinal products that are covered by this Regulation. Commission Regulation (EC) No 847/2000 of 27 April 2000 lays down the provisions for implementation of the criteria for designation of a medicinal product as an orphan medicinal product and definitions of the concepts 'similar medicinal product' and 'clinical superiority' (OJ L 103, 28.4.2000, p. 5).

^[2] Policy paper “Rare therapies and UK regulatory considerations”: https://www.gov.uk/government/publications/rare-therapies-and-uk-regulatory-considerations/rare-therapies-and-uk-regulatory-considerations

^[3] Open consultation “Draft rare disease therapies regulatory framework”: https://www.gov.uk/government/consultations/draft-rare-disease-therapies-regulatory-framework/draft-rare-disease-therapies-regulatory-framework