The industry is increasingly focused on developing treatments for uncommon ailments:
There’s good reason for big pharma’s attraction to rare disease treatments. Revenue from these products has been outpacing sales of mainstream drugs for the last decade, a trend that’s expected to continue for the next 30 years, continuing a trend from last decade. So-called “orphan drugs” (given this moniker because they are for diseases that historically were overlooked by the big drug companies) are protected against competition from generics for seven years in the US, compared to five years for non-orphan products.
The approval process for orphan drugs is also often fast-tracked, lessening the risks of lengthy, expensive and failed developments. Since 1983, when these advantages and generous tax credits for orphan drugs were introduced in the US, an estimated 350 drugs for 200 rare diseases have been approved by the US Federal Drug Administration. No doubt this has improved countless lives, even if Botox (originally a treatment for uncontrollable blinking and spasms, but now largely used for Cosmetic purposes) and Cialis, the erectile dysfunction product, were both originally awarded orphan status.
But John McDuling warns that trouble may lie ahead:
Insurance companies in the US are typically willing to reimburse the costs of orphan drugs, because they are by definition rarely used, they tend to address life threatening treatments, and they are often prescribed to children and young adults, two groups that are predominantly healthy and therefore usually covered. But this policy could change as more money flows into the sector, attracted by the fat profits on offer, and more rare disease treatments are unearthed.
The are rising concerns that orphan drug treatments could be driving up the costs of healthcare for everyone. Already in Europe, where health care is universal, but public finances are stretched, governments are questioning high reimbursement rates for rare disease treatments. As the world’s biggest economy struggles to reform its own absurdly expensive healthcare system, orphan drugs could soon be in the line of fire in the US as well.
The Dish 