One welcome result of the pharmaceutical innovation crisis is a shift from blockbuster drugs to rare disease drugs. We are doing our own part to promote rare disease research, as there are over 6800 rare diseases. The shift is driven by the ability to target niche markets with a higher price tag, the incentives granted by the Orphan Drug Act, and a desire to move away from drug areas hit hard by generics.

Pharmaceutical Research and Manufacturers of America (PhRMA), a trade group for the industry, released a study revealing that “5,000 new medicines are in the pipeline globally … 70 percent are potential first-in-class medicines.1” Among rare diseases, or those with the orphan drug designation, the number of projects has increased to 140 annually over the last 10 years, compared to just 64 annually in the preceding decade. If this trend continues then rare diseases may experience a sort of renaissance of research and better health outcomes.

Higher impact drugs haven’t always driven the pharma industry, so how exactly are pharmaceuticals going to show a profit on targeted drugs?

The answer: The Orphan Drug Act, passed in 1983, provides valuable incentives such as market exclusivity, tax benefits, and research grants to companies that participate. When combined with the investment towards research by the NIH, the government has played a large role in promoting orphan drug development. The Act also provides a relatively competition-free market for the drug developer, as market exclusivity lasts seven years after FDA approval. Competitors must also prove “that their drug is therapeutically superior… when compared to the present drug2“, effectively allowing a monopoly on that rare disease market. The major downside of drug exclusivity is that the patients most in need of the treatment may have limited access due to overpricing, especially in cases where patients don’t have healthcare.3 But what is the value of creating a new drug that nobody can afford?

Nevertheless, investment into rare disease requires risk and capital from pharmaceuticals, and it is better to have the hope of treating a child’s affliction than having no options at all. As John Lechleither, chairman of PhRMA, states: “we depend on policies that enable and encourage the risk-taking that is necessary… for us to make billion-dollar betters with a time horizon of around a decade.4” Let us be thankful that rare diseases are getting the attention they deserve.

References

  1. Robust Biopharmaceutical Pipeline Offers New Hope for Patients. PhRMA. http://www.phrma.org/pipeline
  2. http://en.wikipedia.org/wiki/Orphan_Drug_Act_of_1983
  3. Orphan Drug Act: Background and Proposaed Legislation in the 107th Congress. CRS Report for Congress. http://www.law.umaryland.edu/marshall/crsreports/crsdocuments/RS20971.pdf
  4. Johnson L. Study: Hundred of rare disease drugs in testing. Yahoo! News. http://news.yahoo.com/study-hundreds-rare-disease-drugs-testing-231625052–finance.html