European Court of Justice Judgment Relating to Orphan Market Exclusivity

In a recent judgment, the Court of Justice of the European Union (CJEU) has shed light on the scope of the ‘clinical superiority’ criteria providing for a derogation to orphan market exclusivity which is key to protect the orphan molecule from competition for the period of market exclusivity (10 or 12 years as the case may be). Marie Manley, Chris Boyle, and Alix Vermulst examine the impact of this judgment on pharmaceutical companies.

In its judgment of October 4, 2024, the CJEU clarifies whether the concept of “clinical superiority”, required in order to benefit from the legal derogation to the market exclusivity period afforded to orphan medicinal product, should be assessed the same narrow way as the concept of “significant benefit” key to the determination of whether a product qualifies for the orphan designation, which is interpreted strictly.

The interpretation of “clinical superiority” is crucial, as a product qualifying as clinically superior will benefit from the derogation to the 10-year period of orphan market exclusivity granted to orphan medicinal products against marketing authorizations for the same therapeutic indication, in respect of a similar medicinal product. The concept of ‘significant benefit’ constitutes a condition for obtaining the designation of orphan medicinal product, whilst ‘clinical superiority’ is one of the conditions under which a derogation from the market exclusivity of an orphan medicinal product could be granted to a similar medicinal product.

In the case under discussion, VVB UAB applied for marketing authorization for Tobramycin VVB, which contained tobramycin in inhalation solution form, although Tobi Podhaler (owned by Mylan), a similar orphan medicinal product, had been authorized earlier for the same therapeutic indication. VVB therefore sought a derogation from Tobi Podhaler’s orphan market exclusivity, claiming that Tobramycin VVB was clinically superior on the basis that it offered greater safety for those who developed a cough or intolerance to Tobi Podhaler. The European Medicines Agency issued a scientific opinion supporting VVB’s claim of clinical superiority, and the Commission granted marketing authorization for Tobramycin VVB, therefore granting a derogation to Tobi Podhaler’s market exclusivity.

Mylan challenged the Commission’s decision through an action for annulment, principally alleging that ‘clinical superiority’ should have been assessed in line with the strict interpretation applicable to the concept of “significant benefit”. The General Court held that the concepts of ‘significant benefit’ and ‘clinical superiority’ are based on the same criteria -greater efficacy, greater safety, or a major contribution to patient care – but have different purposes and scope. The General Court further added that the criteria are not cumulative.

Mylan’s subsequent appeal to the CJEU was dismissed, as the CJEU confirmed the General Court’s reasoning and interpretation.

Another important aspect of this case related to the assessment of the greater safety criterion for demonstrating ‘clinical superiority’. In this regard, the CJEU confirmed the General Court’s finding that ‘greater safety’, for the assessment of clinical superiority, must be assessed individually, and does not require an assessment of the overall benefit/risk balance of the population as a whole as is the case for ‘significant benefit’. Tobramycin VVB could, therefore, be considered clinically superior based on greater safety for a substantial portion of the target population.

This judgment is highly relevant for pharmaceutical companies as it clarifies the interpretation of the applicable criteria to qualify as an orphan medicinal product when seeking to benefit from a market exclusivity derogation. However, the broad interpretation of the ‘derogation’ criteria will no doubt raise concerns in the pharmaceutical industry, as it undermines the market exclusivity afforded to orphan medicinal products.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.