An orphan disease is one which has not been accepted by the pharmaceutical sector due to insignificant financial gains in producing and marketing them.
As per the US health department, an orphan disease could be a rare disease (affecting less than 200,000 personnel) or a common disease (tuberculosis, cholera, typhoid, and malaria) that has been overlooked since it exists in the developing nations.
According to the National Organization for Rare Disorders (NORD), “it is estimated that there are roughly 7,000 different types of rare diseases, which affect over 30,000,000 patients”.
New diseases are constantly being defined in medical journals, and the total rare diseases are also linked to the methodology utilized in segregating the various diseases.
In 1983, the Orphan Drug Act of 1983 was established. According to the act, the FDA comprehends the divergence between a standard disease and an orphan disease. The FDA has given several financial benefits to firms committed to developing the orphan drugs.
Some of them are:
- Market exclusivity from approval for 7 years.
- 50% tax credit on R&D costs.
- R&D grants given for Phase I through Phase III clinical trial.
- Waived user fees for companies.
- Fast track approval process.
Hence, at present, several companies are developing products catering to rare and orphan diseases. For e.g. in 2013, out of 35 drugs validated by the FDA, 16 drugs were for the orphan diseases.
The sales revenue from orphan drugs globally was US$ 94 billion in 2014. According to Evaluate Pharma, by 2020, orphan drugs will amount to 19.1% of drug sales through prescription internationally with revenue generated estimated at being US$ 176 billion.
However, orphan drugs are very expensive for patients, costing between US$ 200,000 and US$ 400,000 for each patient in the US.
Since the number of patients is less for rare diseases in comparison to normal diseases, drug firms have to keep the prices high in spite of subsidies to regain the R&D expenditures. Again, drug firms keep the orphan drug prices high due to lack other options.
Coordination among communities suffering from rare diseases is an example of what can be achieved. Health care reform, the bargaining power of patients and the growth potential in the international markets are resulting in a paradigm shift in the potential for orphan drugs/diseases.
Increasingly, robust partnerships are being established between industries, regional/international organizations representing the patients, clinical centers, regulatory authorities with an objective to expedite treatments, enhance the clinical trial design, and improve the quality of care.
Insurance firms based in the US are ready to compensate the costs of orphan drugs since they are often prescribed to children and young adults (representing a healthy population).
However, the policy could be revamped with an increase in the fund flows into the sector (more profits and the discovery of rare diseases). There is a growing concern that the orphan drug medication could be increasing the costs of health care for all.
For instance, in Europe, health care is comprehensive, putting pressure on the existing public finances; key stakeholders from various governments are opposing the high remuneration rates for rare disease medications. In the coming years, orphan drugs could be subjected to scrutiny in the US too.