The sales orphan drugs are forecast to grow 12.3 percent annually over the next five years, about double the rate forecast for the non-orphan drug market, according to a new report by EvaluatePharma.
The orphan drug designation is awarded by regulatory agencies to experimental treatments for diseases affecting a small population of patients and comes with financial and regulatory incentives to develop such treatments. In the United States, an orphan indication is granted based on a patient population of less than 200,000. The European Union and Japanese classifications are similar.
One driver of growing interest in orphan drugs is the emergence of gene therapies for rare diseases. Large biopharmaceutical companies are paying big money to be at the forefront of the next-generation of gene therapy in the wake of the 2018 approval of Spark Therapeutics’ gene therapy Luxturna for a rare genetic eye disorder. And other such therapies expected to come on the market in the near-term.
Evaluate forecasts that orphan drugs will make up one-fifth of worldwide prescriptions drug sales by 2024, amounting to $242 billion. Much of this will go either to big pharmaceutical or big biotech companies, which dominate the oncology space and have been rapidly buying the companies developing gene and cell therapies.
Despite growing pricing pressures, increased use of complicated pricing schemes, and the rise of value-based pricing, developing orphan drugs makes financial sense to companies. The mean annual cost of orphan drugs in the United States in 2018 was 4.5 times higher than the mean annual cost of a non-orphan drug, $150,854 compared to $33,654, according to Evaluate’s analysis. This is down about 1 percent from 2017.
Orphan drugs targeting the smallest populations are the costliest. The revenue per patient for Soliris (eculizumab), marketed by Alexion Pharmaceuticals to treat Paroxysmal nocturnal hemoglobinuria, and Naglazyme (galsulfase), marketed by BioMarin Pharmaceuticals to treat Maroteaux-Lamy disease, both earned sales of more than $500,000 per patient per year.
Oncology continues to be the dominant indication for orphan drug sales, while blood, central nervous system, and respiratory indications account for more than 50 percent of the non-oncology orphan drug market. This category is also dominated by big pharmaceutical companies.
Looking ahead, oncology indications also dominate the orphan drug R&D landscape, along with cell and gene based therapies. Among therapies in late-stage development or with applications to begin mareting filed, Evaluate considers Vertex’s triple combination for cystic fibrosis as the most valuable orphan drug in development, projecting sales of $4.8 billion by 2024. The top 20 list also includes several gene therapies, including Novartis’ Zolgensma for spinal muscular atrophy 1, bluebird bio’s LentiGlobin for hemophilia b, BioMarin’s Valoctocogene/Roxaparvovec for hemophilia a, and uniQure’s AMT-061 for hemophilia b. These are expected to have annual sales between $0.5 and $1.6 billion by 2024.