Ask the Expert: Working with Regulators to Develop Orphan Drugs

Welcome to the Ask the Expert video series. This series is an extension of the PharmTech Group’s long-running print column in which industry experts answer common quality and regulatory questions from the industry. This video series expands on topic areas to include development and manufacturing concerns to help those working in the industry better understand bio/pharmaceutical requirements. Have a question you would like answered? Send it to PTProjects@mmhgroup.com, and it may appear in a future episode or print column.

In this episode of the Ask the Expert video series, Susan J. Schniepp, Distinguished Fellow, Regulatory Compliance Associates, a Nelson Labs Company, and Siegfried Schmitt, Vice President, Parexel, answer the question:

“We are a medium sized company and are looking to develop a new drug and are thinking of applying for orphan drug status. Do you have any suggestions for working regulators?”

For medium-sized pharmaceutical companies considering developing a drug for orphan drug designation, the transition from traditional development to rare disease therapy requires a shift in regulatory, clinical, and operational planning. An orphan drug is defined by the size of the population it treats; in the United States, this generally refers to conditions affecting 200,000 or fewer people,1 while the European Union uses a threshold of approximately five in 10,000.2

What are the regulatory and financial incentives

According to Schniepp and Schmitt, the orphan drug designation route offers government-backed incentives designed to offset the limited blockbuster potential of these products. These include financial support that includes government funding, grants, and tax credits. In the US, fees under the Prescription Drug User Fee Act may be waived for orphan drug developers. Regulators also offer more support for applications and faster approval timelines.

What challenges does the Orphan Drug pathway bring?

Orphan drugs must meet the same rigorous quality and compliance standards as traditional drug approvals , Schmitt and Schniepp emphasize. An accelerated approval process often means manufacturers must be more agileto apply high-level quality systems within a shorter timeframe.

Orphan drugs may also introduce specific manufacturing complexities. Producing smaller batches for clinical trials or commercial use is often more difficult than large-scale production.

Smaller companies without internal facilities may need to utilize contract development and manufacturing organizations (CDMOs). However, CDMOs may find it harder to integrate low-volume runs into their schedules compared to large-scale large tank production.

Because the patient population is small and globally dispersed, distributing small batches of product to far-reaching locations may also be a logistical hurdle.

Patient enrollment for rare-disease treatment development may be difficult, especially if multiple companies are competing for the same eligible participants. Medium-sized firms lacking regulatory experienceshould seek external expertise, according to Schmitt, and work in close collaboration with regulatory authorities. While these therapies may be commercial risks, they may lead to the discovery of broader indications for other diseases, Schniepp suggests, making them even more worthwhile to pursue.

References

1. FDA. Office of Orphan Products Development. FDA.gov. Oct. 1, 2024 https://www.fda.gov/about-fda/office-chief-medical-officer/office-orphan-products-development (accessed Feb. 17, 2026).
2. EMA. Orphan Designation. Overview. Ema.europa.eu. https://www.ema.europa.eu/en/human-regulatory-overview/orphan-designation-overview (accessed Feb. 17, 2026).

About the experts

Susan J. Schniepp is distinguished fellow at Regulatory Compliance Associates and a member of PharmTech’s Editorial Advisory Board.

Siegfried Schmitt, PhD, is vice president, Technical at Parexel and a member of PharmTech’s Editorial Advisory Board.

Transcript

Editor's note: This transcript is a lightly edited rendering of the original audio/video content. It may contain errors, informal language, or omissions as spoken in the original recording.

Hi, everyone. Welcome back to Ask the Expert. I'm Sue Schniepp, and I'm with Nelson Labs, and I'm with my colleague, Siegfried Schmitt, with Parexel, and we're here to talk about, I think Siegfried has a question on orphan drugs. So, let's go for it, Siegfried.

Thank you, Sue. Yes, thanks for the introductions. In fact, yes, the question that came in is:

"We are a medium-sized company, and we are developing a new drug, and we are currently thinking of perhaps applying for orphan drug status with the regulators. Would you have any suggestions, comments, recommendations in that context?"

So, Sue, maybe you would like to start off with this.

Well, that's interesting, 'cause sometimes companies do choose the orphan drug route. Now, there's some advantages to choosing that. So first, we should clarify, an orphan drug is a drug that's treating a condition in people. In the United States, I think it's two hundred thousand or less people are affected by the condition, and I think it's a little different in the European Union.

It's, like, five in a thousand or something, or do you know, Siegfried, what that...?

I don't know the precise figure, but I know that there are slight differences between EU, US, and I believe also in other jurisdictions. You have not exactly the same threshold. Right.

But I believe in most cases, when you're looking at an orphan drug designation, you're probably looking at a rather small population that is affected by the particular disease for which you're developing your drug. Right.

So having clarified that, then the thing that always comes to mind with me is there's a couple of advantages. So, if you go the orphan drug route, you do get assistance from governments, because they realize that if you develop the orphan drug, you probably will not make a lot of money on it, right?

It's not gonna be your next blockbuster because of how few people you're going to really affect with the drug. Once they get out on the market, they're high-priced too, but they are reimbursed typically by insurance. But, you still need to meet all the standards of quality when you're developing an orphan drug.

The thing that I think you need to work the closest with the regulators on are on your clinical trials, because it can be difficult to get patients enrolled in your clinical trial, and that's what the success of your drug is based on.

You know that better than I do, Siegfried.

Well, you're right, Sue. You need to think about where you can find eligible patients, and of course, not every eligible patient will also want to take part in a trial. And interestingly, just because you may be developing a drug for a rare disease, doesn't mean that you're probably the only company doing that.

There are often many competing companies developing drugs for a similar rare disease. So, it's not that you're out there on your own, and you are without competition.

As you quite rightly say, you need to work closely with the regulators, and the regulators offer a lot of support there. And what is also very important is you have to have the same quality and compliance standards as if you go the normal drug approval route.

Yes, you have advantages time-wise. You don't have to wait as long for approval as you have to do with the normal approval pathway, but because things happen faster, you also have to be more agile. You have to work harder and faster to have the same standards, the same levels of quality, and just apply them in a shorter timeframe.

So, perhaps this is something that some companies may not fully understand, particularly when we look at the type of companies that often develop these rare disease drugs.

Very often, these are fantastic scientists, spin-offs from universities, perhaps, and as this particular person who put the question forward said, they're a medium-sized company, and that means they may not have as many people with the right experience in regulatory affairs, in bringing drugs to market, et cetera. So perhaps you need more external help there. What do you think, Sue?

I think so. I think it is a desirable route to go, too, though, because you do get some advantages. I know even in the EU, right, as a developer, so you do get funding, right? And you do get some tax credits, at least in the US. I don't know if you do in the EU.

I think both. We have a Prescription Users Drug Act here, where you pay a fee, and those fees are waived for people who are developing orphan drugs and as you said, grants or help from other sources.

So, I think it's kind of, it's not where I've actually played in the game, but I understand the attraction of it. If you are doing that, oftentimes, too, and I'd like to hear your comments on this, once the orphan drug is developed, it can go on to prompt, develop [other drugs] I think the statins came out of the development of an orphan drug; although, I'd have to check that.

But it started with an orphan drug that they somehow found at the time. I can't remember what it was for. I'm gonna have to look up my history, but they found at the time it lowered the cholesterol of the patients that were getting the orphan drug, and that turned into the statin that we now prescribe readily to patients with cholesterol. Am I remembering that right, Siegfried?

I don't know this particular case, but it's quite possible, because very often you'll find, that a particular drug that you developed for one indication is very helpful with another indication you didn't even know about, you didn't think about. So that doesn't have to come from an orphan drug designation, but it could indeed.

So, I think what companies need to weigh up very carefully is, yes, you have lower fees, you have expedited pathways, you have, much more support for your applications if you go the orphan drug route. But on the other hand, it comes with obligations, as I said, to do things faster, but to the same high standards.

Whether this is, the best possible way, again, is something you need to discuss on a regulatory perspective, but also from a commercial perspective indeed. So, it all has to be balanced out to be right.

Yeah, and your commercial perspective, I like in terms of, sometimes you don't have access. This is where it gets a little bit tricky, too. You need to make sure that you have a contract manufacturer if you're doing that route. You don't have access toa manufacturing facility. You're a smaller company, right, without that, so you're gonna have it contracted. You need to make sure that you have space on their line, line time. It's harder for a contract manufacturer to produce a smaller batch clinical trial material, than it is to produce, you know, a large batch.

At least from my experience, I would say it's easier to do, you know, a big tank and thousands of vials than a smaller clinical trial.

Indeed, and also, once you commercialize your product, again, we know it is a small population that you are servicing here, and, so the batch size, again, with a CDMO will be relatively small.

But it's also the distribution of the product, because it's very likely that your population is distributed, spread out, maybe all over the world, and it can be more challenging to distribute smaller size product batches, than it would be if you have a large commercial product.

Yep, exactly. Well, I don't really have any other advice for people other than, you know, it could be a viable pathway. Just make sure you get the right help and assistance, and work closely with your authorities.

That's exactly it. Seek help, seek expertise. If you don't have it inside, there are plenty outside, and also the regulators.

So, thank you, Sue.

Thanks, Siegfried. I look forward to our next conversation.