Orphan drugs are economically viable – studies show

22 August 2012 (Last Updated August 22nd, 2012 18:30)

Orphan drugs, developed to treat rare diseases, have the potential to generate as much revenue as drugs used for more common health conditions, according to a Thomson Reuters study.

Orphan drugs, developed to treat rare diseases, have the potential to generate as much revenue as drugs used for more common health conditions, according to a Thomson Reuters study.

The paper titled "The Economic Power of Orphan Drugs" assessed the viability of drugs developed to cure rare diseases such as Cystic fibrosis, Wilson's disease and Homozygous familial hypercholesterolemia, which may only affect around 200,000 patients.

The paper found that developmental drivers such as government incentives, shorter clinical trials and high rates of regulatory success do in fact make top orphan drugs as economically viable as mainstream medications.

Thomson Reuters Life Sciences consultant and co-author of the report Kiran Meekings, PhD said that this new data gives economic validity to the importance of targeting rare diseases in the global pharmaceutical market.

"Not only does such focus help those affected by rare diseases, of which there are 25 million people in the United States alone, 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," Meekings said.

The reported cited orphan drug Rituxan (oncology) as having a lifetime revenue potential of $154bn, second only to the blockbuster drug Lipitor, which has a lifetime revenue potential of $197bn.

The compound annual growth rate for the orphan drug market between 2001 and 2010 was 25.8%, compared to 20.1% for non-orphan drugs.

Manning & Napier senior analyst and life sciences managing director Brian Lester said that the higher value of companies that have a strong orphan-drug strategy shows an increasing level of optimism about the profit potential of the rare disease market.

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

The data was aggregated by Thomson Reuters Life Sciences consultants who performed an economic analysis of orphan versus non-orphan drugs in collaboration with Pfizer.