Orphan Drugs: Success Stories and Market Strategies

Report Highlights

• The total worldwide market for orphan drugs, including sales for nonorphan applications, exceeded $28 billion in 2003.
• This market is expected to rise at an AAGR (average annual growth rate) of 9.1% to reach $43.6 billion in 2008.
• As a percentage of overall global drug sales, orphans are expected to increase their share from 7.0% in 2003 to 7.5% in 2008, as growth of the orphan market outpaces that of the total market.
• As of mid-2003, 221 orphan drugs had been developed for the treatment of rare diseases affecting about 11 million patients.
• Some orphan products have sales in excess of $1 billion annually.

INTRODUCTION

An orphan drug is defined by the U.S. Food and Drug Administration as a product that treats a disease affecting 200,000 or fewer Americans. A disease that affects fewer than this number is considered a rare disease. It is one for which there is not a great deal of incentive to develop products because of the small market. However, there are an estimated 6,000 rare diseases that collectively affect 25 million Americans. Approximately 70% are caused by genetic defects that have life-threatening consequences.

The Orphan Drug Act was implemented in 1983 to provide incentives for companies to develop products to treat diseases that annually affect from less than a dozen to a few hundred thousand people in the U.S. Because of the small patient numbers, these products were not expected to generate sufficient revenues to pay for their development. However, some products that originally were approved as orphan drugs had sales in excess of $1 billion.

This BCC report provides an in-depth look at the life stories of drugs with orphan disease designation(s) that have sales in excess of $200 million. The report examines in detail orphan drugs that have become multimillion-dollar products, provides revenues for leading orphan products, presents current and future strategies of companies developing these products as well as the diseases addressed, describes current and possible future legislation affecting development and marketing of orphan drugs in the U.S. and internationally, and examines the historical and current relationship between the biotech industry and the Orphan Drug Act as well as the future relationship of pharmacogenomics to the Act.

SCOPE OF STUDY

The report contains:

• An overview of orphan drug criteria, the history of the Orphan Drug Act and its influence, and advantages inherent in orphan drug designation
• Detailed discussion of successful orphan products, recently introduced products with an equivalent potential, and selected products in development
• Sales projections through 2008 for many of the 26 products analyzed
• A discussion of applications to specific orphan diseases for which products exist, and sales leaders
• An outline of legislation and regulation, including public and private agencies involved in support and development
• Analysis of the orphan drug industry, outlining leading companies and their successful product strategies.

METHODOLOGY

The base year for this study is 2003. Market figures are based on revenues at the manufacturers' level and are projected at 2003 dollar value (i.e., inflation is not computed into the projection figures).

Data to prepare this study was derived from information obtained from product managers, marketing strategists, research executives, government agency spokespersons and directors of organizations focused on specific orphan diseases. In addition, information also was obtained from others at pharmaceutical and biotechnology companies that have products for orphan diseases on the market or in development.

INFORMATION SOURCES

The information and analysis presented in this report are based on an extensive survey of the pharmaceutical industry as well as a detailed examination of published literature and reports obtained from regulatory authorities, medical research institutions, pharmaceutical trade associations, and national and world health organizations. Key information from the literature was used as to obtain expert opinion on commercial potential and market sizes from industry professionals.

AUTHOR'S CREDENTIALS

Lynn Gray has been a research analyst since 1989 and with BCC since 1996. During that time, she has authored numerous reports in the biomedical field, 18 for BCC alone. BA, University of California, Riverside, 1973.