Orphan Drugs Renaissance

Orphan drugs predicted to reach $250 Billion by 2024, representing 20% of the world prescription market with a strong CAGR of 12% y/y, according to EvaluatePharma orphan drug report. Although the treated orphan drug population is relatively small, the budget impact is mounting and igniting debates around the world. The attributed factors among others are, orphan drugs mean treatment cost per patient per year in the US is $150K, which is about 5 times higher than of a non-orphan drug, a fact that does not aid the argument. Although orphan drugs’ clinical development is relatively longer than non-orphan by approximately 25% because of difficulties to allocate patients, the number of patients anticipated to participate in clinical trials of orphan drugs is 50% less than non-orphan. Consequently, delivering a cost reduction of about 50% of the overall development costs. Moreover, the probability of successful registration of orphan drugs in the US is 50% higher than of non-orphan drug. It is not surprising to see President Trump administration working hard to reduce the hiking drug prices by presenting the initiative to exercise a global price reference system that hopefully will eliminate the deviation of two folds that the US is paying over drugs compare to the OECD average prices. The usual suspect in this scrutinizes journey is orphan drugs budget impact, which is looming on the US healthcare future expenses with over 60% of the future new drugs pipeline until 2024 predicted to be of orphan drugs. One could expect that the massive predicted budget impact won’t stay unchallenged with wide reforms to be exercised. The best advocate of orphan drugs is the fact that 50% of orphan drugs directed to treat infants and children, where 30% of those children won’t live to see their 5th birthday. Those sensitive figures are playing a vital role in sociological humanitarian aid to support the mission of saving lives. While only 5% out of 7000 orphan diseases have an approved FDA therapy, and 80% of the orphan diseases are genetic by origin, one can expect an apocalyptic future as a result of a budget impact that will lead to budget insufficiency. Genetic treatments are known to be very effective, but with it very complex and expensive to produce (e.g., Novartis Zolgensma indicates for the treatment of patients with SMA with a tag price of $2.1M USD). Larger amount of companies are participating in the race of introducing new genetic solutions for rare diseases that will predominantly change the drug price map upwards. It’s our essential responsibility to find the right balance between encouraging the R&D of new drugs to serve orphan disease and their cost and government budget impact to prevent apocalyptic financial events. I believe that the avenue of finding the right balance approach needs to rely on pay per success hybrid approaches, supported by ACER and pharmacoeconomics studies to illuminate the fair value price of a given orphan drug. As the world population increasing, exponentially the number of patients with rare diseases attends to increase. The globalization and development of rural areas will convey additional rare disease patients that suffer from a lack of accessible diagnostic and treatment, to the circle of potentially treated patients. Orphan drug companies need to work closely with stakeholders and to apply a creative solution that will allow safe and effective treatment to those low-income patients in need. As a summary, although the US is paying more for their drugs compare to other countries, it is the humanitarian and social responsibilities of the habitant of the world to be more susceptive towards higher orphan drug price acceptance where the socio-economical level allows that. Nevertheless, the innovative orphan drugs companies need to think long terms and more realistically while they are drafting their price strategy not to contribute more to the partially justified price debate, in their endeavor to increase shareholders’ value. 

up icon