LONDON--(BUSINESS WIRE)--Technavio analysts expect the global orphan drugs market 2015-2019 to exceed USD 157 billion by 2019, growing at a CAGR of over 10%, according to their latest report.
An orphan drug is a medicinal product aimed at treating rare diseases or disorders. According to WHO, orphan or rare diseases are the pathological conditions that affect 0.65-1.00 in 10,000 people. There are around 6,000 orphan diseases, of which 80% are genetic. As pharmaceutical companies spend millions of dollars to develop a new drug, the attention of companies is diverted toward the development of new drugs called non-orphan drugs that are used for a huge patient population. Therefore, the development of orphan drugs has been economically incentivized through US law via the Orphan Drug Act of 1983.
According to Barath Palada, lead analyst at Technavio for vaccines research, “Shorter development timelines, high rates of regulatory approval, and government incentives are making orphan drug development as economically feasible as non-orphan drug development even though the patient pool is smaller.”
Technavio’s lead healthcare and life sciences research analysts have identified the following four factors that will drive the global orphan drugs market:
- Shorter development timelines
- Assistance from regulatory bodies
- Incentives for developing orphan drugs
- High return on investment
Shorter development timelines
The shorter development timelines are expected to have a positive impact on the growth of the market for orphan drugs during the forecast period. The clinical trials of orphan drugs are significantly shorter than those of non-orphan drugs. The average time from Phase II to launch is 3.90 years for orphan drugs, compared with 5.42 years for non-orphan drugs.
The clinical trials involving orphan diseases involve fewer patients than those for non-orphan diseases, which leads to a shorter and faster development process. Also, orphan drugs not only present the benefit of shorter development timelines, but also face comparatively fewer regulatory hurdles. Therefore, compared to non-orphan drugs, orphan drug development is less expensive and presents more cost benefits.
Assistance from regulatory bodies
Assistance from regulatory bodies is expected to have a positive impact on the growth of the market for orphan drugs during the forecast period. The assistance and support from regulatory bodies in both the EU and the US is expected to be extremely valuable in further development work.
For instance, the Committee for Orphan Medicinal Products (COMP), which is a committee at the European Medical Agency (EMA) responsible for reviewing applications from people or companies seeking orphan medicinal product designation, is stepping into another stage of its role in the life cycle of orphan products and in the field of rare diseases. This regulatory authority aims to integrate the views of patients, expand international cooperation, and collaborate with health technology assessment bodies for a better understanding of orphan designation.
Similarly, the orphan medicinal products regulation was introduced in the EU to incentivize the development of medicines for rare diseases.
Incentives for developing orphan drugs
The Office of Orphan Products Development (OOPD) aims to develop and evaluate drugs, biologics, and devices that seem promising for the treatment and/or diagnosis of rare diseases or conditions.
The OOPD provides incentives to companies that develop drugs for rare disorders. It formed the Orphan Drug Designation Program (ODDP), which grants orphan status to drugs and biologics that are proven to be effective and safe to treat rare diseases that affect fewer than two million people.
The Orphan Products Grants Program (OPGP) is one of the two extramural grant programs that fund clinical research tests to check the efficacy and safety of drugs, medical devices, and biologics.
High return on investment
Major pharmaceutical companies are faced with many obstacles in the development of orphan drugs such as a limited disease-affected patient population, the patent expiry of branded drugs, stringent rules and regulations, a drying product pipeline, decreased R&D productivity, and high regulatory barriers.
“However, the success of Soliris, a major brand orphan drug, has motivated vendors to expand their product pipeline, which eventually leads to a high ROI. In addition to incentives, increased market exclusivity, tax credits, and the waiver of FDA fees as per the Orphan Drugs Act, 1983 have all propelled the growth of the market,” says Barath.
Browse Related Reports:
- Global Acquired Orphan Blood Diseases Therapeutics Market 2015-2019
- Global Cephalosporin Drugs Market 2015-2019
- Global Gaucher Disease Market 2015-2019
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