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26/05/2016

Study finds orphan drugs economically viable

Science & Policymaking

Study finds orphan drugs economically viable

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Orphan drugs, pharmaceutical agents that are developed specifically to treat rare diseases, have the potential to generate as much lifetime revenue as drugs used for more common health conditions, according to a new study.

The conclusion came in the newly released report – The Economic Power of Orphan Drugs – by Thomson Reuters.

Even though the number of patients benefiting from orphan drugs is significantly smaller, life sciences researchers found that developmental drivers such as shorter clinical trials, government incentives and high rates of regulatory success make the best orphan drugs as economically viable as non-orphan ones.

"This new data gives economic validity to the importance of targeting rare diseases in the global pharmaceutical market," said Kiran Meekings, life sciences consultant at Thomson Reuters and co-author of the report.

"Not only does such focus help those affected by rare diseases," she said, "it also furthers the aim of precision medicine and substantiates the envisioned high returns on the R&D investment, particularly for drugs with multiple orphan disease approvals."

Current estimates indicate that 250 new rare diseases are identified annually. Rare diseases include illnesses such as Cystic fibrosis, Wilson's disease, and Homozygous familial hypercholesterolemia.  

"The higher value of companies that have a strong orphan-drug strategy reflects the increasing degree of optimism for the sale-and-profit potential of the rare disease market," said Brian Lester, senior analyst and managing director of the life sciences group at the financial services firm Manning & Napier.

"We expect the orphan disease business model to sustain a competitive edge over the traditional primary care business model in the future," Lester said.

Background

Orphan drugs are intended to treat diseases that are so rare that companies are reluctant to spend their R&D resources to develop them under usual marketing conditions, as they expect relatively low profit from sales or even financial loss.

EU orphan drugs regulations aim to offer incentives for the pharmaceutical and biotechnological industry to develop and market these drugs.

Further Reading