Financial Feasibility of Orphan Drugs Confirmed by Study

Drugs developed to treat rare diseases have the potential to produce as much lifetime revenue as medication used for more common health conditions, according to a study published by Thomson Reuters yesterday.

The report compared the total value of orphan drugs from 1990 to 2030 and found that government incentives, shorter clinical trials and high rates of regulatory success make top orphan drugs as financially worthwhile as non-orphan drugs.

Rare diseases affect from a handful to up to 200,000 patients and include illnesses such as Wilson’s disease, Cystic fibrosis, and Homozygous familial hypercholesterolemia.

Present estimations indicate that 250 new rare diseases are discovered yearly and a variety of orphan drug therapies are already attaining blockbuster status.

Thomson Reuters states that Roche and Biogen Idec’s Rituxan (rituximab), which has gained noteworthy sales for the treatment of two rare diseases, chronic lymphocytic leukemia and non-Hodgkin’s lymphoma, in addition to the non-orphan indication rheumatoid arthritis, has a lifetime revenue potential of $154 billion, second only to Pfizer’s cholesterol blockbuster Lipitor (atorvastatin), with a lifetime revenue potential of $197 billion.

The study points out that the orphan drug market was worth just more than $50 billion internationally at the end of 2011, and expenditure on orphan drugs currently make up 6% of total pharmaceutical sales, assuming a total market value of $880 billion.  The compound annual growth rate (CAGR) of the orphan drug market between 2001 and 2010 was 25.8%, in comparison to just 20.1% for a matched control group of non-orphan drugs.

Thomson Reuters commented that the data, in combination with the growing number of orphan drug approvals, suggests that the CAGR of launched rare drugs “will outshine that of the non-orphan control drugs over the next 30 years.”  Kiran Meekings, life sciences consultant at Thomson Reuters and co-author of the report, noted that the statistics provide “economic validity to the importance of targeting rare diseases in the global pharmaceutical market.”

He added that not only do “such focus help those affected by rare diseases, of which there are 25 million people in the USA alone, it also furthers the aim of precision medicine.”  It also “substantiates the envisioned high returns on the R&D investment, particularly for drugs with multiple orphan disease approvals.”

Although the revenue generating power of orphan drugs will decrease when they move into the generics market, they are protected by additional exclusivities, such as the US’s seven-year Orphan Drug Exclusivity (ODE), which can begin running later in a product’s life cycle if the new indication is approved after the initial launch.

Links:
www.thomsonreuters.com
www.pharmatimes.com
blog.pharmexec.com
www.reuters.com

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