Orphan drug market to reach US$127bn by 2018, says Evaluate report

18-Jun-2013

Orphan drugs are expected to contribute 15.9% to the overall prescription drug market in 2018, excluding generics, up from 5.1% in 1998

The worldwide orphan drug market is set to reach US$127 billion by 2018 (+7.4%), accounting for nearly 16% of total prescription drug sales, according to a new report from Evaluate, which is headquartered in London, UK.

This predicted growth rate, finds The Orphan Drug Report 2013, is double that of the overall prescription drug market, excluding generics, which is forecast to grow at 3.7% a year. Orphan drugs are expected to contribute 15.9% to the overall prescription drug market in 2018, excluding generics, up from 5.1% in 1998.

The report finds that there was a notable uplift in the number of US orphan designations from 2003 to 2010. This growth, and therefore R&D investment in this area, is due to superior R&D productivity in the orphan drug sector, says Anthony Raeside, Head of Research at Evaluate.

The success of a second wave of pioneers in orphan drug development, such as Amgen, Biogen Idec, Genentech (Roche), Genzyme and Schering-Plough proved that significant returns could be made in smaller patient populations, through higher prices from innovative new drugs.

High R&D costs in developing primary care products, coupled with high profile clinical and regulatory failures and the continuing growth of generics in primary care markets has further drawn Big Pharma into the orphan sector.

Orphan drugs currently offer a greater return on investment than non-orphans

The report confirms the hypothesis that orphan drugs currently offer a greater return on investment than non-orphans. The current stock of Phase III/Filed orphan products is expected to yield a return on investment of x10.3 compared with x6.0 for non-orphans. This significantly better ROI is primarily due to the fact that orphan drugs require an average Phase III trial size of 528 patients compared with 2,234 for non-orphans.

Evaluate estimates the average Phase III cost to be $85m compared with $186m for the key Phase III trial. When factoring in the potential 50% US tax credit, this can reduce the orphan cost to $43m compared with $186m for a non-orphan.

Interestingly, the report does not find orphan drug development time to be any quicker, with an average of 2.75 years between the start of Phase III trials to filing with the US Food and Drug Administration.

The number of new orphan drug designations declined in 2012 to 188, from a peak of 203 in 2011, the report finds, which could signal a slowdown in investment in the sector.

Other main points from the report are that Novartis is expected to maintain its leading position in orphan drug sales over the next five years, while Bristol-Myers Squibb, GSK and Sanofi are set to climb up the orphan sales ranking table.

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Roche’s Rituxan (rituximab) for the orphan treatment of non-Hodgkin B-cell lymphona will be the leading orphan drug in 2018 with sales of $6.9bn. Celgene\'s Revlimid for multiple myeloma and myelodysplastic syndromes is set to be a close second with $6.6bn in worldwide sales.

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