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Flawed legislation has helped create a new profit model for the drug industry

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Flawed legislation has helped create a new profit model for the drug industry

Research shows how EU law helps companies to reap billions of euros
Experts say system is the result of flawed legislation
The findings could lead to reform in Europe

European legislation designed to help patients with rare diseases has yielded lucrative results for the drug industry, finds an investigation published in The BMJ and the Dutch Journal of Medicine today.

Twenty years ago, the EU passed a law to motivate the drug industry to develop medicines for rare diseases (“orphan medicines”). Companies making orphan medicines were awarded 'market exclusivity' giving them a de facto 10 years monopoly on sales.

But research by The Investigative Desk (a non-profit organisation for investigative journalism) has found that since 2001, average annual sales of all orphan drugs has increased from €133m to €723m in 2019.

The European Commission is also set to publish a review that suggests most of these drugs would have been launched anyway without favourable monopoly rights. The findings could lead to reform in Europe.

Journalists Daan Marselis and Lucien Hordijk say the EU orphan legislation has yielded lucrative results for the drug industry, helping companies transform the traditional blockbuster model into a “nichebuster” model, in which products treating diseases that affect only small patient groups still manage to generate more than a billion euros annually.

They analysed global sales data of 120 (of 174) orphan medicines registered in the EU in the past 20 years and found that in 2019 alone, there were 20 such nichebusters with an orphan designation in the EU - up from three in 2009.

Medicines for rare cancers are particularly lucrative, they say, with an average turnover of €1.1bn - twice the turnover of medicines for other rare diseases.

The EMA was asked to comment on our findings but stated that “it would not be appropriate to comment on the [European] Commission study before it is published.” 

But experts say the excessive protection of orphan medicines is the result of flawed legislation. Sven Bostyn, associate professor of biomedical innovation law at the University of Copenhagen, said market exclusivity “gives companies an unprecedented tool for sealing off markets.”

The high prices of orphan medicines have caused increasing controversy in even the most prosperous EU member states, while studies have shown that access to orphan medicines in the EU is unequal.

Whether the EMA can effectively battle the misuse without the legislation itself being altered remains to be seen, write Marselis and Hordijk, but they say behind closed doors the EMA seems unhappy with the results of the orphan legislation. 

[Ends]

29/07/2020

Notes for editors
Investigation: From blockbuster to “nichebuster”: how a flawed legislation helped create a new profit model for the drug industry
Journal: The BMJ

Link to Academy of Medical Sciences press release labelling system:
https://press.psprings.co.uk/AMSlabels.pdf

Peer reviewed? No
Evidence type: Investigation
Subjects: Orphan drugs

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