Asia has huge potential for orphan drug medications and treatments. Asia’s population is nearly 4 billion, close to two-thirds of the world’s 6.4 billion inhabitants. Most Asian countries are experiencing GDP growth over 5% and Japan’s economy is growing for the first time in a decade. While some Asian countries such as Japan and Singapore have highly advanced healthcare systems, others, such as China and Indonesia, are still striving to improve their systems. As each Asian country’s healthcare system differs, the potential for an orphan drug’s success will also vary throughout the region. Some Asian countries are very aware of rare diseases and thus health insurance coverage, expedited registration and exclusive marketing periods are well defined for orphan drugs. Other Asian countries are only now beginning to look at rare diseases, and what they can do to help their citizens afflicted with them.
Japanese healthcare standards are among the highest in the world; Japanese consumers spend close to $300 billion per year on healthcare. Though this number is far less than the $1.8 trillion spent by US consumers every year, Japan’s demand for better and safer healthcare is rising as its elderly population continues to grow. Subsequently, the Ministry of Health, Labor and Welfare has become more aware of the need to improve the regulatory and safety environment for pharmaceuticals.
The Orphan Drug Development Program in Japan was initiated by the MHLW in 1993 to support the development of life-saving, but generally non-profitable, drugs. To date, the MHLW has designated approximately 182 orphan drugs, 97 of which have also been approved as new drugs.
The Orphan Drug Development Program has enabled numerous orphan drug developers to enter the Japanese market, including a number of small, mid-size, and large foreign drug companies. Of the 182 designated orphan drugs, close to half of the drug developers are non-Japanese companies, demonstrating the utility of the orphan drug procedure for foreign companies in Japan. The majority of the orphan drugs approved in Japan are used for treating infectious diseases, hematological diseases, neuromuscular diseases, and diseases common in children or infants.
A drug must meet the following three conditions in order to be considered for orphan drug designation in Japan:
1. The drug is used to treat a rare disease or condition affecting less than 50,000 people in Japan. (In the U.S., it is less than 200,000 people.)
2. The drug treats a disease or condition for which there are no other treatments available in Japan, or the proposed drug is clinically superior to drugs already available on the Japanese market.
3. The applicant should have a clear product development plan and scientific rationale to support the necessity of the drug in Japan.
Drug companies that are granted orphan drug designation are eligible to receive the following benefits:
1. The MHLW has a consultation service specifically for orphan drug designation applicants, which is free of charge.
2. The applicant may receive financial aid from the Japanese government for the collection of supporting data, such as clinical trials, bridging studies, etc. Specifically, the applicant may receive financial aid for as much as 50% of the cost of the clinical trials, as well as tax exemptions of up to 6% of research costs and 10% of corporate tax.
3. The application will be placed on a fast-track approval process, which generally proceeds much smoother than that of regular drugs. In theory, the fast-track approval process takes 10 months while the approval for regular drugs takes at least 12 months.
4. The applicant will be granted a 10-year period of marketing exclusivity in which no generic drugs may be placed on the market. However, 10 years is the maximum period of marketing exclusivity; it is possible that the MHLW could reduce this period, depending on the case.
5. Product renewal for orphan drugs is every 10 years, compared to every 6 years for other drugs.
The MHLW determines the amount of clinical data required for an orphan drug application and approval on a case-by-case basis. Of course, Japanese data is most valuable. Japanese data is considered supportive in terms of getting the product approved. Generally, foreign or Asian (non-Japanese) data is considered more as reference data by the MHLW.
In Japan, as in other Asian countries, it is particularly important to identify doctors or Key Opinion Leaders (KOLs) who may be interested in your orphan drug. In order to obtain the strongest support for your product, it is best to target doctors focused on the specific disease/condition your drug treats. Backing from relevant Japanese associations can also be very important.
Through a great deal of communication with the MHLW, the applicant will finalize their orphan drug designation dossier. The applicant, in most cases, needs to get the orphan drug designation before they can get product approval. Once the MHLW qualifies the dossier as adequate and complete, they will officially accept the application.
After the drug is designated as an orphan drug, the applicant is able to discuss the development of a Japanese clinical study plan with the MHLW through a consultation service. Once clinical trials are completed, a New Drug Application (NDA) can be submitted.
It is important to keep in mind that while Japan has orphan drug legislation, this legislation has room for interpretation. The MHLW makes orphan drug designation and approval decisions on a case-by-case basis. This is especially true when determining the number of Japanese clinical trials required for approval.
Recent orphan drugs approved in Japan include Glaxo’s Lexiva for HIV infection, Genzyme’s Fabrazyme for Fabry disease, and Novartis’s Visudyen for age-related macular degeneration.
Taiwan’s pharmaceutical market is currently valued at around $2.75 billion and the Taiwanese government is continuing to improve drug regulations and standards in order to attract more foreign enterprises and investment. In early 2005, the amount of Western drug imports to Taiwan had risen over 100% since 2004 to NT 1.45 billion (US $44 million), according to the Ministry of Economic Affairs.
The health standards in Taiwan are among the best in Asia, and the country boasts a high life expectancy – about 75 years for men and 80 for women. As of 2005, Taiwan had over of 20,000 medical care institutions, with over 50 hospital beds for every 10,000 citizens. The patient to doctor ratio was approximately 750 to 1 in 2004.
Taiwan’s Department of Health (DOH) is responsible for ensuring the availability and efficiency of medical treatment in Taiwan. The DOH monitors the National Health Insurance program and hospital operations and coordinates among local health agencies. The Bureau of Pharmaceutical Affairs and the Bureau of Controlled Drugs are in charge of establishing laws and policies for the management of pharmaceuticals in Taiwan.
On February 9, 2000, Taiwan’s Legislative Yuan implemented the Rare Disease and Orphan Drug Act to improve the diagnosis, treatment and prevention of rare diseases in Taiwan. In particular, the Act aims to provide patients with easier access to pharmaceuticals for the treatment of rare diseases by promoting the supply, manufacturing and R&D of these products. To carry out the Act, the Department of Health (DOH) established the Committee for the Review and Examination of Rare Diseases and Orphan Drugs.
Pharmaceuticals designated as orphan drugs are not required to undergo clinical trials for approval in Taiwan as long as the drug has already been approved by the US FDA. If the drug has not received US FDA approval, local clinical trials in Taiwan will be required. The application must be submitted by a subsidiary of the manufacturer who has an office in Taiwan or by a local Taiwanese agent (local distributor, local company office or independent third party). The DOH’s review process takes 6-10 months to complete.
In Taiwan, pharmaceuticals approved as orphan drugs are granted a 10-year marketing exclusivity period, in which the DOH will not accept registration applications for any similar drugs.
The ability for patients to quickly obtain medication for a rare disease is still an issue in Taiwan. Some conditions are officially classified as “rare diseases” under the Rare Disease Prevention and Medicine Law in Taiwan, entitling patients to full financial coverage for medication. Since many of these orphan drugs are very expensive, hospitals do not provide the drugs without prior reimbursement approval from the Bureau of National Health Insurance. The Bureau requires 4.5 working days to review a patient’s diagnosis report before granting reimbursement for any drugs.
In general, it should be noted that Taiwan has been very generous with respect to reimbursement for a variety of rare diseases. Reimbursement levels have been very reasonable and often cover the entire cost of the medication and office visits. There are many patient or parent groups that have successfully lobbied the Taiwanese government for such monies.
The Korean pharmaceutical market is currently valued at around $6.5 billion, the third largest in Asia behind that of Japan and China. While the market has been growing steadily at 7-9% per year for the past several years, the Korea Food and Drug Administration (KFDA) continues to work on the internationalization and improvement of the country’s pharmaceutical regulations. In May 2005, the KFDA entered into a Memorandum of Understanding with the World Health Organization to participate in an International Program on Chemical Safety for pharmaceuticals and other medical products. Additionally, the KFDA has released English versions of over one dozen Korean pharmaceutical regulations, which are now available on the KFDA website (www.kfda.go.kr).
In Korea, orphan drugs are supplied to patients by pharmaceutical companies or the Korea Orphan Drug Center. As of October 2002, over 130 orphan drugs have been approved by the KFDA.
The requirements for orphan drug designation in Korea are as follows:
• Less than 20,000 people in Korea suffer from the disease/condition, or there is no available treatment for the disease/condition in Korea.
• If the product is manufactured in Korea, the total production should be less than 5 billion won (U.S. $5 million). If the drug is manufactured outside of Korea and imported for sale, the total imports of the drug should be less than U.S. $5 million.
The orphan drug application process takes around 6 to 9 months to complete. Approved orphan drugs are generally granted about 6 years of marketing exclusivity, depending on the government’s decision.
In general, Korea has reimbursed orphan drugs at about one-half to two-thirds of the actual cost of the drug and doctor visits. Patient and parent groups have also lobbied the Korean government with some success.
Recent orphan drugs approved in Korea include Abbott’s Kaletra capsules and solutions for HIV infection and Schering Plough’s Bonefos (solutions and capsules) for treatment of hypercalcemia and osteolysis due to malignancy.
Hong Kong boasts a small but wealthy population and the country’s healthcare standards are among the highest in Asia. The pharmaceutical market is valued at around $1.6 billion and offers advanced technologies and a very high standard of care. While there is some Hong Kong-based drug manufacturing, more advanced drugs are generally imported.
The Department of Health (DOH) is responsible for health legislation and policy in Hong Kong. The DOH is made up of a number of smaller divisions, including the Medical Device Control Office, Center for Health Protection, Dental Service, Radiation Health Unit, and Pharmaceutical Service. The Pharmaceutical Service is responsible for drug registration and drug import/export control in Hong Kong.
An orphan drug applicant may register their drug under the New Chemical Entity (NCE) registration process, which was established for new, life-saving drugs. In this case, the application will be processed immediately and reviewed by the Hong Kong Department of Health (DOH) Pharmaceutical Licensing Committee. This Committee only meets four times a year, so applicants should make an effort to submit their application several weeks prior to a Committee meeting to reduce processing time.
A second registration process is available for those applicants which cannot meet the NCE application requirements. The second option, registering under the “normal” registration process, takes 6-9 months to complete.
Like Hong Kong, Singapore is small but economically advanced, offering a highly-developed healthcare system. The country also serves as an Asian hub for many medical companies. A number of large pharmaceutical companies, such as Pfizer and GlaxoSmithKline, have established a presence in Singapore, and continue to expand their manufacturing and research facilities.
The Health Sciences Authority (HSA) was established in April 2001 to ensure the quality, safety, and efficacy of drugs, medical devices, cosmetics, and other health-related products in Singapore. In January 2004, the Center for Drug Administration (CDA) was established under the HSA. The CDA was formed by merging two previously-existing agencies: the Center for Pharmaceutical Administration (CPA) and the Center for Drug Evaluation (CDE), which were both responsible for the regulation and evaluation of medical products in Singapore. The CDA’s mission is to further simplify and streamline the evaluation and registration processes of pharmaceuticals in Singapore.
While Singapore’s Medicines Act, which regulates pharmaceuticals in the country, specifically mentions orphan drugs, that portion of the law has never been “activated.” Therefore, the definition of an orphan drug is not 100% clear in Singapore and companies can encounter difficulty receiving orphan drug designation.
The following information will be supportive in making an orphan drug claim.
• The drug is used in life-threatening conditions and plays a critical role in the management of that condition.
• The disease/condition currently affects a very limited number of patients.
• A rough estimate of the number of patients affected by the disease/condition should be provided.
If the drug meets the above conditions and is designated as an orphan drug by the Ministry of Health, it will be given top priority during the registration process. Approved orphan drugs are granted a 10-year period of marketing exclusivity. To date, reimbursement of orphan drugs in Singapore has been very challenging.
As the Asian pharmaceutical markets grow, so too will opportunities for orphan drugs in Asia. Asian governments are becoming more aware of the importance of orphan drugs, and reimbursements for these products will increase in the future. Each Asian market, however, is different, and one must study each Asian country’s orphan drug regulations and markets to be successful.
Ames Gross is President and founder of Pacific Bridge Medical and is recognized nationally and internationally as a leader in the Asian medical markets. To learn about the services that Pacific Bridge Medical offers to help medical companies with business development and regulatory issues in Asia, please visit www.pacificbridgemedical.com.