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The status of orphan drugs

Orphan drugs are a classification of medicines for rare diseases. The market for those medicines is relatively small due to the low number of patients. Since development of pharmaceuticals is expensive, special incentives have been created to encourage pharma and biotech companies to conduct research. As a result a special orphan status was developed in the US in 1983. In Europe it took nearly two more decades since an orphan legislation was not introduced until 2000.

“The orphan classification has been extremely successful. Without it the pharmaceutical industry would never have conducted this much research on rare diseases. One must remember that there has been, and still is, an enormous need from the patients for better medicines targeted at rare, life threatening or serious debilitating diseases. We still have about 7,000 orphan diseases for which there is no cure,” says Bo Jesper Hansen, chairman of the board at Swedish orphan Biovitrum (sobi).

One form of orphan classification

In order to be granted “orphan designation” in Europe, a drug has to fulfil certain criteria. First and foremost the medicine has to target a rare disease with a prevalence of less than 5 per 10,000 citizens. Furthermore, the disease must be life threatening or seriously debilitating. Finally there should not be any drugs on the market today. If there already are drugs on the market the new drug has to prove “significant benefits” over existing drugs.
“There is only one form of orphan classification. Either a drug fulfils it or it does not. We are not trying to give special incentives to certain rare diseases,” says Kerstin Westermark, professor and senior expert at the Swedish Medical Products Agency.
In Europe in total, 1,537 drugs have applied for orphan status and 1,056 have been granted it during the last decade. During the last years more and more orphan applications have been filed and more positive approvals have been given. In total, about 70 medicines with orphan status have received final approval on the market in Europe by regulatory agencies. That number should be compared to the 400 orphan drugs that have been approved on the market in the us.
“One has to remember that the us has had its orphan system for almost two decades longer than Europe. Give it some time and Europe will certainly catch up,” says Kerstin Westermark.

Majority aimed at oncology

A good indication that the incentives given by orphan designation has led to more research in rare diseases is the fact that in Europe before the year 2000, only eight drugs were approved on the market for what later became orphan indications. In the following decade, about 70 drugs were approved. Of the 70 orphan medicines approved the majority (about 40 percent) have been aimed at oncology, i.e. rare forms of cancer. Alimentary tract and metabolism account for approximately 20 percent of all applications.
“However, we have not striven to give special incentives for oncology in any way. The reason why so many cancer drugs have been approved is simply that many companies have chosen to focus on oncology,” says Kerstin Westermark.
Bo Jesper Hansen stresses the fact that the orphan-legislation has positive effects on many levels.
“I look at orphan as a win-win-win situation. The patients get access to medicines that give hope for an increased life expectancy and increased quality of life. For society as a whole, it creates jobs and for the pharmaceutical companies it gives economic incentives,” says Bo Jesper Hansen.

A number of benefits

A drug with an orphan status has a number of benefits. One is that the company that develops the drug can ask the medical agency for protocol assistance which means that the regulatory agency will give advice on studies that should be conducted to maximize chances of approval. This service is basically free for small research companies whereas larger companies have to pay for it. If the drug is approved on the market, special exclusivity and protection from competition is given during ten years. It does not mean that the drug has a complete monopoly, however a competing drug that wants approval for an indication where there is an orphan drug on the market have to show clinical superiority.
Smaller companies that develop orphan medicines tend to have a lower success rate when it comes to approval on the market compared to larger companies.
“Smaller companies often have less experience in regulatory issues compared to pharma giants. Furthermore, when given advice from regulatory agencies on how the studies should be designed to maximize chances for a positive outcome, bigger companies tend to follow the advice more carefully than small companies and that clearly affects the chances of a positive outcome,” says Kerstin Westermark.

Total market value of 50 billion dollars

The interest from pharma companies for orphan drugs has clearly increased. This should come as no surprise given that according to a recent analysis made by Thomson Reuters, the total orphan drug market is estimated at more than 50 billion dollars worldwide. An example of the enormous commercial potential is Soliris, an orphan drug approved in the us developed by the biotech company Alexion Pharmaceuticals. Soliris is used against paroxysymal nocturnal hemoglobinuria, a rare form of blood disease that may be life threatening. Despite the fact that only 5,000 Americans are affected by it, the drug sold for 541 million dollars in the us last year. Soliris is one of the most, perhaps the most, expensive drug in the world. It costs a staggering usd 500,000 per patient treated. g