Orphan drugs to combat impact of patent expiry
Frost & Sullivan believes these drugs will change the landscape of the Pharma industry
The economic recovery process has been difficult for the pharmaceutical industry and factors such as patent expiry, a dry pipeline of new drugs and strict approval guidelines have slowed down growth.
However, Frost & Sullivan believes orphan drugs could be one way of combating the impact of falling revenues resulting from patent expiry of blockbuster drugs.
‘The current economic situation plus the huge generic competition has shifted the focus of pharmaceutical companies and they are moving to a new business model – niche busters – also called orphan drugs,’ says Frost & Sullivan’s healthcare consultant Shabeer Hussain.
This new business model will enable pharmaceutical companies to develop newer areas of therapeutics, diagnosis, treatment, monitoring and patient support.
Orphan drugs will not only help to reduce the impact of revenue loss due to the patent expiry for blockbuster drugs, but clinical trials for orphan drugs are also run efficiently with smaller patient groups, thereby reducing costs significantly.
Incentives for drug development provided by governments, the FDA and the EU commission in special protocols are a further boost for companies developing orphan drugs.
Pharmaceutical and biotechnology companies are also licensing products to maintain revenue, which reduces the cost of developing and marketing orphan drugs.
While the focus on ‘niche busters’ grows, the safety regulations and approval processes will become stricter, putting larger companies in a better position to cope with the increasing demands. Although smaller pharma-biotech companies will struggle to compete with the more powerful competitors in the industry, Hussain believes there will still be assurance for niche players with specialist therapies, technologies, unique capabilities and expertise.
Acquisitions at a global level, aimed at specific niche capabilities with technologies, are likely to be the most effective way of achieving a better partnership and collaboration, as well as a more diverse client space.
‘Biopharmaceuticals are likely to continue to take the major share of the pharmaceutical industry and be in direct competition with the small molecule drugs,’ adds Hussain. ‘These effects will create new consolidated companies, and this evolution will change the landscape of the pharmaceutical industry.’
