Orphan drugs, no longer orphan?

In Market Access, Partnering & Investment by Simon Reid

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Have orphan drugs found a home? It seems that this is the case for a lot of rare disease therapies being developed, as pharma and biotechs, along with investors, have understood that producing orphan drugs can be a potent money maker.

It all started with the first orphan drug approved by the FDA from Genzyme to treat Gaucher’s Disease and when the company decided to charge an unprecedented $200,000 a year which was covered by insurance. Twenty years later, more drugs were granted orphan designation and consequently more orphan drugs available to patients. One of the reasons why this became a more profitable field is the established accelerated approval based on proving effectiveness through surrogate endpoints.

In this new scenario, the main issue seems to be how accelerated development of orphan drugs affect healthcare costs overall.

The answer lies on the fact that developers can charge high prices for orphan drugs. Therefore, if the government is going to encourage drug makers to produce orphan drugs and put no limits on prices, we will quickly see healthcare costs go even more out of control.

A new system that addresses all rare diseases and orphan drugs stakeholders needs to be discussed and established, especially in the reimbursement field, otherwise developing orphan drugs won’t be a sustainable business anymore. The other factor of course is the development of a copy of the drug – making orphan drugs more affordable through time. Or is it time to take away incentives and encourage developers to discover expanded indications like Novartis does?

What do you think?