Orphan drugs no longer niche

By 2020 orphan drugs are expected to account for 19 per cent of the total share of prescription drug sales in the US, Japan and Europe, excluding generics, reaching $176 billion in annual sales, according to a new report from market intelligence firm Evaluate.

At a growth rate of almost 11 per cent per year, the orphan drug market is set to be more than double the 5 per cent growth rate of the overall prescription market excluding generics. The report also includes pricing estimates. In 2014, the average orphan drug cost per patient per year was $137,782 compared to an average of $20,875 for a non-orphan drug.

“Orphan drugs are no longer a niche segment of the market,” said Anthony Raeside, Evaluate’s head of research. “Although orphan populations are, by definition, the smallest, they represent big per-patient outlays, and insurers will be looking carefully at new tools to arrest cost growth as more and more orphan drugs launch.”

Financial incentives have helped bolster the market. Prior to the US Orphan Drug Act 1983, 38 orphan drugs were approved. Today, 468 indications have been approved for 373 drugs.

The success of the US Act led to its adoption in Japan in 1993 and the European Union (EU) in 2000. Benefits include market exclusivity of at least seven years in the US, or 10 years in the EU, plus reduced R&D costs in the US via tax credits and grants for phase I-III trials. Lack of alternative treatments give orphan agents an advantage at regulatory review and, once on the market, they typically command prices six times higher than non-orphan drugs per patient.

The report found that a record 260 orphan drug designations were granted in the US in 2013, with Pharmacyclics’ leukaemia drug Imbruvica ranked as the most promising new orphan drug approved by the US FDA in that year.

Vertex’s cystic fibrosis drug VX-809 in combination with Kalydeco was 2013’s most valuable R&D orphan drug based on net present value, with projected sales of $4 billion by 2020.

The report also suggests that Bristol-Myers Squibb is set to leapfrog Novartis as the leader in orphan drug sales in 2020 thanks to cancer immunotherapeutic Opdivo.

The Orphan Drug Report 2014 is based on market intelligence and consensus forecasts from EvaluatePharma and can be downloaded at www.evaluategroup.com/orphandrug2014.

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