Orphan Drugs Lucrative

The market for drugs that target rare diseases is expected to rival big pharma blockbusters in the coming decades.

By | August 24, 2012

image: Orphan Drugs Lucrative Dreamstime, Henrischmit

Drugs for treating rare diseases can be as lucrative for drug companies as big blockbusters such as Lipitor, according to a report by Thomson Reuters. With a global market valued at $50 billion annually and with over 200 new rare diseases discovered every year, orphan drugs are expected to “outshine” their non-orphan counterparts over the next 30 years, the report said.

New indications for the rare diseases chronic lymphocytic leukemia and non-Hodgkin’s lymphoma, for example, are a major reason why Roche and Biogen Idec's Rituxan (rituximab), which was originally intended for the treatment of rheumatoid arthritis, is expected to make a lifetime revenue of $154 billion, Pharma Times reported—not a bad haul compared to the $197 billion Pfizer's Lipitor is expected to make over its lifetime.

Such examples provide "economic validity to the importance of targeting rare diseases in the global pharmaceutical market," Thomsom Reuter’s Kiran Meekings, who co-authored the report, told Pharma Times.


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Avatar of: Steven Grossman

Steven Grossman

Posts: 1

August 24, 2012

I think the general conclusion of T-R report is probably correct---orphan drugs is a market segment that will continue to grow and has the capability of providing satisfactory ROI to companies developing orphans. However, I have problems with the type of extrapolations being made by the report--which suggests that past profits and CAGR are sustainable into the future.

First, the rarity of $200k to $400k per year drugs is what makes it feasible for companies to charge that amount. As insurers are faced with more of these and they take some larger chunk of PPPM (per patient per month) insurance premiums, there is bound to be a market adjustment. Second, within a decade (not necessarily sooner as some weirdly predict), there will be enough of a biosimilar market to start affecting ROI and CAGR. I think life will still be very good for successful orphan developers--but not at the level achieved by extrapolating past growth.

I have addressed the future of orphan drugs in my current blog column (, as well as maybe 3 other columns this year. You may also want to google a column I did about 18 months ago called "Drug Pricing 101." Drug pricing is more than just "what the market will bear" or "what savings we generate to the health care system." Steven Grossman

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