Development of new drugs and medical devices in Japan is a lengthy and costly process. For example, it is said that only 1 out of 30,591 new drug candidate compounds are approved for manufacture and sale.
This creates difficulties for development of drugs that are needed for only a small number of patients, for example, pharmaceuticals for intractable diseases such as multiple sclerosis (MS), amyotrophic lateral sclerosis (ALS) and acquired immune deficiency syndrome (AIDS). These are called orphan drugs. A similar situation exists for medical devices, such as implantable ventricular assist devices. Even though the medical needs are high, due to the small number of patients, return on investment in research and development is difficult. This leads to insufficient research and development efforts in general.
In 1993, the full-fledged public effort began to promote research and development by setting up the program to assist R&D efforts by private corporations.
This NIBIO program begins with approval by the Minister of the Ministry of Health, Labour and Welfare (MHLW) of the designation of orphan drugs or orphan medical devices, and follows up with guidance and advice on testing and research, grants, tax incentives, priority review and extension of the reexamination filing period.
In 1993, NIBIO picked up the development and promotion works that had been managed by the former Organization for Pharmaceutical Safety and Research (OPSR), providing guidance and advice and issuing grants for experimental research projects. In April 2005, NIBIO started the support program to develop orphan drugs and orphan medical devices.
The National Institute of Biomedical Innovation, in order to promote research and development of orphan drugs (1) issues grants, (2) provides guidance and advice and (3) provides grant certification.
[Source: "Pharmaceutical Industry Textbook 2012" (in Japanese), Japan Pharmaceutical Manufacturers Association]
The purpose of this program is to make available to the medical field, as soon as possible, safe and effective orphan drugs and orphan medical devices, through grants to defray research and development costs and to provide guidance and advice on the testing and research needed for approval.
1 Obtaining the designation as an orphan drug or orphan medical device for rare diseases
Designation as an orphan drug or orphan medical device by the Minister of MHLW is not the same as approval for manufacture and sale. It is ordinarily granted during the development phase. To obtain this designation, all of the following requirements must be met, based on Article 77-2 of the Pharmaceutical Act:
[Reference: Director's Notice No. 725, August 25, 1993 Director General of the Pharmaceutical Affairs Bureau, MHLW]
The definition of the regulation about the number of patients with the disease indications being less than 50,000 was revised and the method for calculating the number of such patients was clarified. Now, designation can be obtained for the following new drugs if the estimated number of patients who would be using the product is less than 50,000 at the time the application is filed:
[Reference: Excerpts from notice No. 0331007 by the Director of the Evaluation and Licensing Division, Pharmaceutical and Food Safety Bureau, MHLW, March 31, 2006)
◇Figure 1: Process of the orphan drug and orphan medical device research and development promotion program
A company that intends to obtain the designation to develop an orphan drug or an orphan medical device needs to file the application for designation approval with the Evaluation and Licensing Division of the Pharmaceutical and Food Safety Bureau of MHLW or the Office of Medical Device Examination Management of the Evaluation and Licensing Division of the Pharmaceutical and Food Safety Bureau of MHLW with an attachment that shows that it satisfies the requirements stated earlier. The Minister of MHLW approves the designation based on the recommendation from the Pharmaceutical Affairs and Food Sanitation Council.
2 Development status of orphan drugs and orphan medical devices
Table 1 shows the current status of orphan drugs and orphan medical devices designated for rare diseases, from program inception to April 4, 2013. The details for orphan drugs are listed in Table 4. Details for orphan medical devices are listed in Table 5.
◇Table 1: Status of approval of designation, development, and revocation by the fiscal year of designation for both orphan drugs and medical devices
Table 1 tracks the status changes for designated orphan drugs or orphan medical devices listed by fiscal year when the designation was obtained. "Approved status" signifies that the Minister of MHLW has approved the item for manufacture and sale. "In development" is for items in process of development. "Revoked" is for items for which the designation was revoked.
For example, 8 items obtained orphan drug designation in FY 2001. Since then, 4 items were approved while designation for 4 other items was revoked because the development effort was ended. On the other hand, 15 items were designated as orphan drugs in FY 2010. Within the following two years, 7 of these were approved and 8 items are in development, working toward approval for manufacture and sale.
Some items have more than one designation number. For instance, a corporation with a designated item that is merging or being acquired may file the application for a new designation for the same item. In such a case, this table uses the fiscal year of the original designation. This can also occur when there are multiple fiscal years for approval for manufacture and sale, for example when indications or effectiveness for different patient groups for the same item involve different development schedules. Table 1 also shows only the fiscal year for the first approval obtained.
3 Incentives to promote orphan drug and orphan medical device research and development
Once a product obtains the designation of orphan drug or orphan medical device, it is eligible for the following incentives to promote research and development by MHLW, Pharmaceuticals and Medical Devices Agency, and NIBIO.
When a corporation receives an orphan drug or orphan medical device designation, NIBIO provides grant funding to defray necessary project development costs, the so-called "Grant to Assist Research and Development of Orphan Drugs and Orphan Medical Devices." The cost to be defrayed is the direct cost of the necessary R&D from receipt of the designation through approval for manufacture and sale. The maximum grant amount is half of the actual cost. However, drugs for AIDS treatment are eligible to receive grants after filing the application for approval for manufacture and sale, if the corporation is required as a condition of approval to provide clinical trial data after manufacturing and sales have commenced.
After the grant application is filed by a corporation seeking to develop the item, NIBIO investigates the contents, purpose, cost, and test plan to come up with the specific grant sum. The period of grant availability is, as a basic principle, three fiscal years starting from the fiscal year the grant was first disbursed. For instance, for a grant provided starting fiscal year 2013, the corporation can receive funding through fiscal year 2015.
After obtaining approval for manufacturing and sales, the corporation receiving the grant funds may be asked to donate to NIBIO a portion of the profits from the orphan drug or orphan medical device for a fixed time period after it is provided to the medical field. In such a case, the total donation amount should not exceed the total amount of grant funding received by the corporation. NIBIO uses this revenue for its program of supporting orphan drugs and orphan medical devices.
This grant is also categorized as a specific subsidy under the Small Business Innovation Research (SBIR) program based on the New Business Promotion Act. Small to medium sized corporations that receives this grant also qualifies to receive the supportive measures for commercialization of research, such as expansion of the loan guarantee facility under the Special Provisions of the Small and Medium-sized Enterprise Credit Insurance Act.
From 1993 through April 4, 2013, 300 drugs and 23 devices were designated as orphan drugs and orphan medical devices respectirely.
Out of the above, grant applications were filed for 152 drugs and 14 devices. Approximately 12 billion yen in total grant funding was provided. Approval was given for 95 orphan drugs and 6 orphan medical devices. Figure 2 shows the total amount of grant funding and the number of items by fiscal year. In FY 2012, 21 items received grants totaling 880 million yen.
◇Figure 2: Trends in grants issued
◇Grants provided to support R&D of orphan drugs in FY 2011
◇Grants provided to support R&D of orphan drugs in FY 2012
Table 2 shows the annual schedule for the grant program. For details of application documents and the contents of expenses covered by grants, please read the guide that can be downloaded from the NIBIO website and contact NIBIO if you have further questions.
In addition to the investigation schedule shown in Table 2, at any time, spot investigations for progress status or accounting may be conducted.
In collaboration with MHLW and Pharmaceuticals and Medical Devices Agency (PMDA), NIBIO provides guidance and advice regarding grants to help defray R&D costs for developers of orphan drugs and orphan medical devices. In this role, NIBIO may attend the developer's meeting at Pharmaceuticals and Medical Devices Agency.
Tables 3-1 and 3-2 show the role division for consultations. NIBIO plays a consulting role from the time of obtaining the orphan drug or orphan medical device designation through the filing of the application for approval for manufacture and sale.
NIBIO provides consultation free of charge.
◇Table 3-1: Role division for consultation services for orphan drugs
|MLHW Pharmaceutical and Food Safety Bureau (PFSB) Evaluation and Licensing Division||Consultation on filing the application for designation (prior to obtaining designation)|
|NIBIO||Consultation on development support from the time the designation is obtained to the time of filing the application for manufacture and sale|
|PMDA||Consultation on R&D up to the time of filing the application for manufacture and sale|
◇Table 3-2: Role division of consultation services for orphan medical devices
MLHW Pharmaceutical and Food Safety Bureau (PFSB) Evaluation and Licensing Division
Office of Medical Device Examination Management
|Consultation on filing the application for designation (prior to obtaining designation)|
|NIBIO||Consultation on development support from the time the designation is obtained to the time to file the application for manufacture and sale|
|NIBIO||Consultation on R&D up to the time of filing the application for manufacture and sale|
Based on the Special Taxation Measures Law, NIBIO approves and certifies the grant sum applied of the expenses for R&D carried out during the grant period by development corporations working on orphan drugs or orphan medical devices.
When the certification is obtained, after deducting the grant amount, the rest of the total amount of R&D expense for orphan drugs or orphan medical devices which received the support grant money is eligible for a tax incentive of 12% as a tax abatement. For more details about application procedure, please read the guideline that can be downloaded at the NIBIO website. If you need further clarification, please contact NIBIO.
he information about designation and approval of orphan drugs and orphan medical devices are publicly available on NIBIO's website. The orphan clinical trials website provides information about orphan drugs and orphan medical devices and available grant funding.
◇Table4 List of products designated as orphan drugs for rare diseases
◇Table5 List of products designated as orphan medical devices for rare diseases
(Note) As of November 21, 2012, where there is a dash, the item is in the development process with testing and research or in the examination process, or else the designation was revoked; therefore approval for manufacture and sale was not granted.
◇Promotion of development of orphan drugs and orphan medical devices Japanese version (pdf file)
◇Promotion of development of orphan drugs and orphan medical devices English version (pdf file)
Department of Research Promotion, Section of Development Promotion
National Institute of Biomedical Innovation
7-6-8, Saito-Asagi, Ibaraki City, Osaka-Fu, Japan
[Clinical Trial projects for rare diseases website (orphan clinical trial website)]