European Union Orphan Drug Regulation Reform Under the EU Pharmaceutical Package: Changes and Strategic Implications for Pharma Companies

The European Union (EU)’s orphan medicinal product (OMP) framework has been a cornerstone of innovation for rare diseases for more than two decades. The current regulation offers ten years of market exclusivity per orphan drug designation (ODD), alongside fee reductions and regulatory support. This has enabled companies to sequentially develop the same molecule across multiple rare indications, each supported by a standalone marketing authorization application.

This paradigm is set to fundamentally change in 2028. The revised EU Pharmaceutical Package will replace the “one indication, one application, one exclusivity period” model with a single global marketing authorization per product covering all orphan indications.

This article reviews how the EU Pharma Package will change the EU orphan drug regulation and the implications of these changes for companies planning to launch new rare disease treatments.

Current EU Orphan Drug Regulation Framework: Market Exclusivity and Indication-Based Approvals

Under the existing regulation, each orphan indication can be pursued independently:

• Standalone orphan designation applications per indication
• 10 years of orphan market exclusivity (OME) per authorized orphan indication
• OME applied sequentially when indications are authorized at different times
• Strong alignment between regulatory incentives and stepwise development strategies

This framework has shaped how companies approach rare disease portfolios. Many have intentionally staggered development programs, starting with a smaller, well-defined orphan population to de-risk development, followed by expansion into additional rare indications. Each approval resets the exclusivity clock, supporting long-term lifecycle value while gradually expanding patient access.

The cumulative effect of OME has been a central pillar of business case justification for companies developing platform molecules (e.g., enzyme replacement therapies, monoclonal antibodies, or gene-modulating compounds) applicable across multiple rare diseases.

The Upcoming Changes: A Structural Reset of Orphan Incentives

OME under the new rules will be capped at a maximum of 11 years for the first orphan indication, with the possibility of one additional year per new orphan indication, up to a maximum of two additional indications. In practice, companies will move from potentially decades of cumulative exclusivity to a maximum of 13 years for the same product.

The revised pharmaceutical legislation introduces a global marketing authorization for OMPs. The implications are significant for drug developers of rare disease treatments that are targeting a marketing authorization application in EU by mid-2028 and beyond:

• One marketing authorization per product, regardless of the number of orphan indications for this product
• Max of 11 years of OME for the first orphan indication
• Nine years for all new OMP
• Two additional years if the medicinal product is a breakthrough OMP (see the article “The EU Pharmaceutical Package: Impact on Orphan Medicinal Products” for more details)
• 13 years (maximum OME), regardless of how many rare diseases are targeted. One year per additional orphan indication is allowed, capped at two additional indications on the top of the 11 years of the OME.

This shift in 2028 will affect any company developing a medicine for multiple rare indications in the EU. Strategic decisions made today, particularly in pipeline design and sequencing, will determine future patient access, development efficiency, and return on investment.

Strategic Implications: Rethinking Development Pipelines

This new approach fundamentally changes the incentive structure and the strategic mindset for OMP developers targeting the EU market. Developing additional orphan indications no longer leads to resetting OME but to marginal extensions, while development costs, complexity, and risk remain substantial and even increase over time.

The intent of the EU Pharma Package is to encourage earlier, broader patient’ access and reduce perceived inefficiencies in staggered submissions. However, for industry, this creates a tension between bringing new alternatives to patients and improving their health status vs. maintaining the economic sustainability of orphan innovations. The result may be a reduction in new therapeutic options for patients in the EU suffering from rare diseases.

Pharmaceutical companies developing OMPs for the EU market for multiple rare indications must now rethink their approach across three dimensions:

• Indication sequencing
• Portfolio prioritization
• Integrated developed planning

Indication sequencing strategy under the new EU orphan exclusivity rules

Under the new system, the first approved orphan indication becomes strategically critical, as it anchors the exclusivity clock (nine or 11 years of OME). Companies may lose two years of OME if the indication does not fit within the scope of breakthrough OMP.

Choosing to start the regulatory approval process with a targeted rare disease with no existing treatment whit but limited commercial potential may undermine long-term ROI. Conversely, delaying approval of a new therapeutic option to optimize sequencing could slow patient access.

Portfolio prioritization under the 13-year exclusivity cap

Companies must make explicit trade-offs given that only two additional orphan indications are incentivized via exclusivity extensions. Not all rare indications may justify full development; some may require alternative access strategies (e.g., compassionate use, investigator-sponsored studies).

Integrated development planning for multi-Indication orphan products

Development programs will increasingly need to be designed holistically, with multiple orphan indications planned in parallel rather than sequentially.

This increases upfront costs and complexity but may be the only way to balance access and value creation in the EU market.

How Pharma Companies Should Adapt to the EU Orphan Drug Reform

Start strategic planning early

Early dialogue between R&D, regulatory, market access, and corporate strategy functions is essential. Assess orphan portfolios well before pivotal trials, mapping:

• All potential orphan indications.
• Existing therapeutic options, relative unmet need, feasibility, development cost, and time to approval.
• Strategic importance of being first (breakthrough OMP) vs. subsequent indications.

Redefine the role of incentives

Orphan incentives can no longer be viewed solely as cumulative exclusivity. Companies should:

• Integrate OME with pricing, reimbursement, and lifecycle management strategies.
• Consider whether certain indications serve as access enablers rather than revenue drivers.

Tailor company’s strategies to its profile

Approaches should vary based on company size and type:

• Small and mid-sized biotechs may prioritize a single, high-impact orphan indication to secure early approval and partnership or acquisition.
• Large pharma companies with diversified portfolios may pursue parallel development of two to three orphan indications to maximize the limited exclusivity extensions.
• Platform-based innovators may need to accept that not all rare indications will be commercially viable under the new framework, requiring sharper focus.
  
  

Engage proactively with regulators

Early scientific advice and orphan designation discussions will be critical to:

• Clarify expectations on global applications.
• Align development plans with regulatory timelines.
• Avoid missteps that could lock in suboptimal exclusivity outcomes.

Conclusion: Strategic Repositioning Under the Post-2028 EU Orphan Drug Framework

The post-2028 EU Pharma Package orphan drug framework marks a decisive shift from incremental, indication-by-indication optimization to strategic, product-level decision-making. The new model aims to improve patient access and system efficiency, but it also compresses incentives and raises the stakes of early development choices.

Orphan drug strategy for the EU market must become a core element of corporate strategy, balancing mission-driven patient access with disciplined portfolio management and financial sustainability.

Those who adapt early by rethinking pipelines, redefining incentives, and integrating cross-functional decision-making will position themselves to continue delivering transformative therapies to rare disease patients in a changing European landscape.

About Alira Health’s Rare Disease Center of Excellence

Rare diseases present unparalleled challenges for patients. At Alira Health, we help biotech and pharma companies develop and commercialize rare disease treatments with the intense focus on the unique needs of rare disease patients that is crucial to your success. With a continuum of patient-centric solutions, we work with you to successfully develop and provide life-changing treatments to the patients.

From clinical trial patient recruitment and retention to crafting a patient-centric product strategy, our transversal team stands by you every step of the way.

Alira Health’s full lifecycle of rare disease services includes regulatory, full-service CRO, market access, real-world evidence, and commercial solutions.