In a way to support and encourage pharma companies to work upon developing drugs or medical devices in rare diseases, several country regulatory agencies are coming up with various benefits such as faster approvals, fee concessions, and financial benefits, etc.

These countries include the US, Europe, Japan, Australia, South Korea, and most recently, India. Incentives offered by regulatory agencies in the USA and Europe were discussed in a previous article.

Check out the first article in this series Rare Diseases: Regulatory Incentives for Development of Orphan Drugs – US & EU

In this article, we are going to go through the regulations in Japan and Australia for orphan drug designation in rare diseases. The details on the incentives from China, South Korea, Russia, and India will be covered in the next article in this series.

Orphan drugs and rare diseases

As we have already discussed in the previous article, an orphan drug is a pharmaceutical agent developed to treat orphan diseases or rare diseases which, because they are so rare, would not be profitable to produce without government assistance. In order to encourage development and research, a supportive legislative and regulatory framework (often known as orphan drug designation) has been adopted for medicines for rare diseases in a number of countries and regions.

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Japan – Orphan drug regulations

In Japan, a disease is considered to be a rare disease, if it occurs in fewer than 1 in 2,500 people. 

The MHLW (Ministry of Health, Labour, and Welfare) makes orphan drug designation and approval decisions on a case-by-case basis. 

Criteria for orphan designation status in Japan

  • The number of patients who may use the drug or medical device should be less than 50 000 in Japan.
  • Should establish a theoretical rationale for the use of the product for the target disease, and the development plan should be appropriate.
  • The drugs or medical devices should be indicated for the treatment of serious diseases, including difficult-to-treat diseases. In addition, they must be drugs or medical devices for which there are high medical needs satisfying one of the following criteria.
    • There is no appropriate alternative drug/medical device or treatment
    • High efficacy or safety is expected compared with existing products

Incentives or benefits for orphan drugs in Japan

  • Financial benefits 
    • Subsidy payment: Orphan drug/medical device applicants can receive subsidies through the National Institute of Biomedical Innovation (NIBIO) to reduce the financial burden of product development and R & D expenses. 
    • Lower fee: Lower user fee categories for PMDA’s consultation are applicable to designated orphan drugs.
    • Tax benefit: Twelve percent of study expenses for orphan drug/medical devices incurred during the NIBIO subsidy payment period (not including subsidies granted by NIBIO) can be reported as a tax credit.
  • Regulatory benefits 
    • Guidance and consultation: Orphan drug/medical device applicants can receive guidance and consultation from the Ministry of Health, Labour and Welfare (MHLW), the Pharmaceuticals and Medical Devices Agency (PMDA), and NIBIO on research and development activities. PMDA provides a priority consultation system for designated orphan drug/medical devices.
    • Priority review: Designated orphan drugs and medical devices will be subject to expedited review for marketing authorization to ensure that they are supplied to clinical settings at the earliest possible. Categories of lower user fees are applicable to review for marketing authorization of designated orphan drugs.
  • Marketing benefits
    • Extension of re-examination period: After orphan drug/medical device designation and approval, the re-examination period for the drugs will be extended up to 10 years for drugs and up to 7 years for medical devices.

Process for orphan designation in Japan

Read more about Rare Diseases: Clinical Trials & Drug Development

Australia – Orphan drug regulations

in Australia, a disease is considered to be a rare, if occurs in fewer than 1 in 2,000.

Criteria for orphan designation status in Australia

  • If the medicine is intended to treat the condition which affects fewer than 5 in 10,000 individuals in Australia when the application was made.
  • If it is not likely to be financially viable for the sponsor to market the medicine in Australia unless each fee referred to in paragraph 45(12)(c) of the regulations were waived in relation to the medicine.
  • If the medicine is intended to prevent or diagnose the condition which would not be likely to be supplied to more than 5 in 10,000 individuals in Australia during each year that it is included in the Register.

Incentives or benefits for orphan drugs in Australia

  • Financial benefits: 
    • Fee waiver: The sponsor needs to pay the determination application fee if submitting an application for orphan drug designation at the same time as an application for priority determination or provisional determination. This fee will be refunded if orphan drug designation is approved.
    • Evaluation fee: Evaluation fees are waived for prescription medicine registration applications if a related orphan designation is in force.
    • Designation Extension: There is no fee for applications to extend orphan drug designation.
  • Regulatory benefits
    • Provide a consistent and transparent process for assessment against the eligibility criteria
  • Marketing benefits
    • Market exclusivity: Orphan-designated medicines which fulfill the criteria for the designation are granted 5 years of market exclusivity protection.

Understand how to manage the challenges faced in Clinical Trial Logistics for Rare Disease Clinical Trials

Process for orphan designation in Australia

Overview of Japan & Australia regulatory incentives

Criteria Japan Australia
Legal framework Regulation Orphan Drug Regulation (1993) Orphan Drug Policy (1998)
Administrative authorities involved Orphan Drug Division (ODD) TGA
Prevalence of the disease (per 10,000 individuals), justifying the orphan status 411
Marketing exclusivity 10 Years 10 Years
Tax credit or benefit 6% for any type of study
+ limited to 10% of
the company’s
corporation tax
Grants for research NoNational Grants
Reconsideration of applications for orphan designation Yes Every 6 months
Technical assistance for elaboration of the application file YesNo
Accelerated marketing procedure YesYes

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Way forward

Utilize these incentives to your advantage in the development of medicines for rare diseases, or orphan drugs, as they are commonly known.

Interested in knowing more about these benefits from other countries?

Find out in the next articles in this series about incentives and support mechanisms for rare diseases in