Part 2: The Challenges of Bringing Orphan Drugs to Market

Orphan drug access  

Though proven to be effective, safe, and fulfilling a true unmet need, all too often orphan drugs fail to be approved or available where and when they are needed. Due to budgetary issues, this is proving to be an ongoing dilemma for companies aiming to bring an orphan drug to market in the EU. Several factors are in play:

• Orphan drug designation, protocol assistance, and marketing authorisation are part of a centralised procedure in the EU and the US
• In the EU, therapeutic value assessment, pricing, and reimbursement for these agents remain within the realm of member states’ responsibility—in essence, orphan drugs in the EU go through 2 approval processes and many drugs do not make it through due to pricing issues
• In the US, orphan drug approval or rejection is under the sole purview of the FDA, and pricing negotiations are handled through CMS (Centers for Medicare & Medicare Services) and other insurers—for very expensive drugs, specific conditions may be set to prevent over-use

Key issues surrounding EU-member-state pricing negotiations

1. Each state negotiates pricing separately
2. Some member states do not have the expertise to perform the complicated therapeutic value assessments required
3. Some companies may negotiate with member states that grant a higher price—which they then use as a reference price in further negotiations 
4. With NICE in the UK taking over orphan drug pricing review in 2013, it remains to be seen how pricing and reimbursement will be handled, as many countries tend to model approval or denial on NICE action

• NICE has a long-standing history of being very tough on approving (or rejecting) high-priced non-orphan drug products
• They say they will develop “interim methods for the first few drug assessments and will take forward a consultation exercise in 2013/14 to ensure the process put in place is robust, transparent, and consistent.”
• The agency does not expect to entirely re-invent the work of AGNSS (the prior review agency for most orphan drugs in the UK); NICE will need to build upon the “decision-making framework that AGNSS has developed to ensure that the needs of people with rare and very rare conditions are properly considered.”

Orphan drug post-approval expansion strategies

The “PROs” of orphan drugs include market exclusivity, fast-track approval status, and financial advantages. The “CONs” are that sales for an orphan drug with a single indication are limited unless there is a future strategy for expansion in place.

The graphic below, which is adapted from Datamonitor CMHC2548, illustrates some key expansion considerations.

Each of the 3 scenarios has an upside potential in terms of sales. Scenario 1 is very attractive, as it can provide quite rapid expansion into a new, larger market.

Gleevec/Glivec is a good example of success for the second scenario—obtaining multiple orphan drug indications. In the case of Gleevec/Glivec, this has resulted in a $4-billion-a-year blockbuster. (It would be best to keep in mind that a Gleevec/Glivec-like success is the exception, and certainly not the rule). With the current trend toward development of molecularly targeted agents, it may be necessary to invent additional expansion strategies. Very highly targeted agents, meant to address a specific single gene or even base-pair malfunction (for example Kalydeco from Vertex), may not be “expandable” into other disease sectors. However, the methodology developed to produce an agent like Kalydeco could be leveraged to address other genetic errors in an effort to develop other product targets.

When to develop the expansion strategy

In an ideal world, an expansion strategy would be considered before a decision is taken to develop or acquire an orphan drug. However, that said, there is no “bad” time to develop or evolve an expansion strategy.

Orphan drugs appear to have become much more common over the last decade, and with blockbuster drugs facing the patent cliff, orphan drugs will likely be the wave of the future.

Check back for the third blog in this series: “Creative Thinking in an Orphan-drug World.”

What do you feel are the top-priority challenges that must be addressed in orphan drug development, access, and promotion? Leave a comment and let’s talk about it.