A booming market — looking at the growth of the orphan drug market and its drivers
With worldwide orphan drug sales predicted to grow at a significant rate and each drug fetching a hefty price tag, I look at this market and its drivers in a bit more detail…
According to the latest orphan drug report from EvaluatePharma,1 worldwide orphan drug sales are expected to grow at double the rate of that anticipated for the non-orphan drug market.
So, what exactly is an orphan drug? Orphan drugs are those that have been specifically developed for the treatment or prevention of a ‘rare’ disease — one which is considered to be life-threatening or permanently disabling medical conditions affecting less than 5 in 10,000 people.
Previously, pharma companies would focus more on the conditions that were affecting much larger patient populations. However, to tackle rare diseases affecting much smaller numbers of patients globally, incentives were introduced to motivate more companies to perform the lengthy and costly work of developing the required orphan drugs.
Financial incentives set out in law — available in the US since 1983, Japan in 1993 and the EU in 1999 — to encourage pharma companies to put the time and money into developing orphan drugs for these small patient populations, include options such as reduced research and development costs and funding.
Additionally, companies that gain approval for marketing authorisation of an orphan drug also gain market exclusivity. In Europe, companies are granted 10 years of exclusivity from the time of approval, which is the same for the Japanese market. In the US, this is a little less at seven years.
This exclusivity means that regulatory bodies cannot approve the same product for the same orphan indication, leading to a significant control over what cost the companies can command for these drugs.
In the latest EvaluatePharma analysis the mean cost per patient for orphan drugs came in at just under $150,000 per patient last year, which is four times that of the cost of non-orphan drugs. The most expensive drug (Soliris) actually weighed in at a cost of more than $500,000 per year.
But, these prices could be coming into dispute, as the report also highlighted that, year-on-year, there is a reduction on the amount of price increases each orphan drug can command. This pushback could be the result of a rise in pressure from government and patient groups around drug pricing with some looking more closely at the incentives offered and questioning whether it is fair for big pharma to receive this aide.
Yet, with demand continuing to be strong the market growth is still looking healthy overall. And with several drugs for rare diseases being touted as ‘ones to watch’ as predicted blockbusters for this year perhaps the question from the mid-noughties of ‘is this the end of the blockbuster?’will transform into ‘which orphan drug will be the next top blockbuster?’— only time will tell…
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