Estimated impact of EU Orphan Regulation on incentives for innovation

Emilie Neez, Arianna Gentillini, Richard Dutton, Adam Hutchings
October 2020

The European Commission is currently reviewing the 2000 Regulation on orphan medicinal products (OMP). It is critical that any consideration of reform of the Regulation should be informed by a robust understanding of the relationship between incentives, investment, innovation and patient access. To that avail, this study adopts a risk-adjusted Net Present Value analytical approach to evaluate the economic case for OMP development, given the current incentives framework and in its absence. We suggest that investment in OMP development remains a marginal economic decision in most cases. Furthermore, we found that over half of products developed between 2000-2017 are attributable to the Regulation.

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