Orphan drug

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An orphan drug is a pharmaceutical agent that has been developed specifically to treat a rare medical condition, the condition itself being referred to as an orphan disease.

In the US and EU it is easier to gain marketing approval for an orphan drug, and there may be other financial incentives, such as extended exclusivity periods, all intended to encourage the development of drugs which might otherwise lack a sufficient profit motive.[1][2] The assignment of orphan status to a disease and to any drugs developed to treat it is a matter of public policy in many countries, and has resulted in medical breakthroughs that may not have otherwise been achieved due to the economics of drug research and development.[3]

According to Thomson Reuters in their 2012 publication "The Economic Power of Orphan Drugs", there has been increased investing in orphan drug Research and Development partly due to the U. S. Orphan Drug Act of 1983 (ODA) and similar Acts in other regions of the world and also driven by "high-profile philanthropic funding."[4][5] The period between 2001 to 2011 was the "most productive period in the history of orphan drug development, in terms of average annual orphan drug designations and orphan drug approvals."[5]:660 For the same decade the compound annual growth rate (CAGR) of the orphan drugs was an "impressive 25.8 percent, compared to only 20.1 percent for a matched control group of non-orphan drugs."[4]:6 By 2012 the market for orphan drugs was worth USD$637 million compared to the USD$638 million matched control group of non-orphan drugs, Thomson Reuters.[4]

By 2012,

"the revenue-generating potential of orphan drugs [was] as great as for non-orphan drugs, even though patient populations for rare diseases are significantly smaller. Moreover, we suggest that orphan drugs have greater profitability when considered in the full context of developmental drivers including government financial incentives, smaller clinical trial sizes, shorter clinical trial times and higher rates of regulatory success."

— Gaze and Breen 2012

Orphan drug legislation[edit]

Orphan drugs generally follow the same regulatory development path as any other pharmaceutical product, in which testing focuses on pharmacokinetics and pharmacodynamics, dosing, stability, safety and efficacy. However, some statistical burdens are lessened in an effort to maintain development momentum. For example, orphan drug regulations generally acknowledge the fact that it may not be possible to test 1,000 patients in a phase III clinical trial, as fewer than that number may be afflicted with the disease in question.

Since the market for any drug with such a limited application scope would, by definition, be small and thus largely unprofitable for pharmaceutical companies, government intervention is often required to motivate a manufacturer to address the need for an orphan drug.[1]

In 2015 Gibson et al published the results of their qualitative study of "34 key Canadian stakeholders which including drug regulators, funders, scientists, policy experts, pharmaceutical industry representatives, and patient advocates in which they investigated contributing factors to the growing interest of the pharmaceutical industry in "niche markets"[6] such as orphan drugs.

The intervention by government on behalf of orphan drug development can take a variety of forms:

  • Tax incentives.
  • Enhanced patent protection and marketing rights.
  • Clinical research financial subsidization.
  • Creating a government-run enterprise to engage in research and development (see Crown corporation).

Currently there are more than 400 orphan designated drugs in clinical trial process. Majority of these drugs are being developed in the US followed by Europe. The US dominate the development of orphan drugs with more than 300 orphan designated drugs being under clinical trial process.[7]

  • Orphan Designated Drugs in Clinical Phase: 600[7]
  • Marketed Orphan Designated Drugs: 281[7]
  • Highest Number of Drugs in Phase-2 Trial: 231[7]
  • US Dominates Clinical Trial Process: 350 in Pipeline (Research till Registration)[7]
  • Indication for Clinical Trials for Orphan Drug: More than 30% for Cancer Treatment
  • Share of Biological in Orphan Drug: More than 60%[7]
  • Key Market: US (Sales > US$ 40 billion)[7]

United States[edit]

Orphan Drug Act[edit]

Main article: Orphan Drug Act

The Orphan Drug Act (ODA) of January 1983, passed in the United States, with lobbying from the National Organization for Rare Disorders and many other organizations,[8] is meant to encourage pharmaceutical companies to develop drugs for diseases that have a small market.[9] Under the ODA orphan drug sponsors qualify for seven-year FDA-administered market Orphan Drug Exclusivity (ODE), "tax credits of up to 50% of R&D costs, R&D grants, waived FDA fees, protocol assistance[5]:660 and and may get clinical trial tax incentives.[9]

Orphan drug designation means that the sponsor qualifies for certain benefits but it does not mean the drug is safe and effective and legal to manufacture and market in the United States.

Rare Diseases Act[edit]

In 2002 the Rare Diseases Act was signed into law. This legislation amended the Public Health Service Act to establish the Office of Rare Diseases. It also increased funding for the development of treatments for patients with rare diseases.[10]

European Union[edit]

The European Union (EU) has enacted similar legislation, Regulation(EC) No 141/2000, in which pharmaceuticals developed to treat rare diseases are referred to as "orphan medicinal products". The EU's definition of an orphan condition is broader than that of the USA, in that it also covers some tropical diseases that are primarily found in developing nations.[11] Orphan drug status granted by the European Commission gives marketing exclusivity in the EU for 10 years after approval.[12] The EU's legislation is administered by the Committee on Orphan Medicinal Products of the European Medicines Agency (EMA).

Regulatory harmonization[edit]

In an effort to reduce the burden on manufacturers applying for orphan drug status, the FDA and EMA agreed in late 2007 to utilize a common application process for both agencies. However, the two agencies will continue to maintain separate approval processes.[13]

Other countries[edit]

In addition to the United States and the European Union, legislation has been implemented by Japan, Singapore, and Australia that offers subsidies and other incentives to encourage the development of drugs that treat orphan diseases.[14]


Under the ODA and EU legislation, many orphan drugs have been developed, including drugs to treat glioma, multiple myeloma, cystic fibrosis, phenylketonuria, snake venom poisoning, and idiopathic thrombocytopenic purpura.

The ODA is nearly universally acknowledged to be a success.[3] Before Congress enacted the ODA in 1983 only 38 drugs were approved in the USA specifically to treat orphan diseases.[2] In the USA, from January 1983 to June 2004, a total of 1,129 different orphan drug designations have been granted by the Office of Orphan Products Development (OOPD) and 249 orphan drugs have received marketing authorization. In contrast, the decade prior to 1983 saw fewer than ten such products come to market. From the passage of the ODA in 1983 until May 2010, the FDA approved 353 orphan drugs and granted orphan designations to 2,116 compounds. As of 2010, 200 of the roughly 7,000 officially designated orphan diseases have become treatable.[3] Some critics have questioned whether orphan drug legislation was the real cause of this increase (claiming that many of the new drugs were for disorders that were already being researched anyway, and would have had drugs developed regardless of the legislation), and whether the ODA has really stimulated the production of truly non-profitable drugs; the act also received some criticism for allowing some pharmaceutical companies to make a large profit off of drugs that have a small market but still sell for a high price.[9]

Although the European Medicines Agency grants market access its 27 member states, in practice, medicines only reach the market when each member state decides that its national health system will reimburse for the drug. For example, 35 orphan drugs reached the market in Belgium, 44 in the Netherlands, and 28 in Sweden in 2008. 35 such drugs reached the market in France and 23 in Italy in 2007.[15]

Orphan diseases[edit]

Main article: Rare disease

A rare disease, also referred to as an "orphan disease", is any disease that affects a small percentage of the population. Most rare diseases are genetic, and thus are present throughout the person's entire life, even if symptoms do not immediately appear. Many rare diseases appear early in life, and about 30 percent of children with rare diseases will die before reaching their fifth birthday.[16] With a single diagnosed patient only, ribose-5-phosphate isomerase deficiency is presently considered the rarest genetic disease. No single cutoff number has been agreed upon for which a disease is considered rare. A disease may be considered rare in one part of the world, or in a particular group of people, but still be common in another.

Research has found that as many as one-in-ten Americans suffers from rare disease.[17] Over 55 million people are estimated to suffer from a rare disease in Europe and in the US. Global estimates are between 5000 to 7000 rare diseases. New rare diseases are discovered every week and many have no treatments available. Currently, 350 orphan drugs have been approved for sale in the US.[18]

Cystic fibrosis[edit]

Main article: Cystic fibrosis

In the 1980s, cystic fibrosis patients rarely lived beyond their early teens. However, drugs like Pulmozyme and Tobramycin, both developed with aid from the ODA, revolutionized treatment for cystic fibrosis patients by significantly improving their quality of life and extending their life expectancies. Now, cystic fibrosis patients often survive into their thirties and some into their fifties.[10]

Homozygous familial hypercholesterolemia[edit]

The 1985 Nobel Prize for medicine went to two researchers for their work related to homozygous familial hypercholesterolemia, an orphan disease that causes large and rapid increases in cholesterol levels. Their research led to the development of statin drugs that are commonly used to treat high cholesterol.[14]

Wilson's disease[edit]

Main article: Wilson's disease

Penicillamine was developed to treat Wilson's disease, a rare hereditary disease that can lead to a fatal accumulation of copper in the body. This drug was later found to be effective in treating arthritis.[14] Bis-choline tetrathiomolybdate is currently under investigation as a therapy against Wilson's disease.


Numerous advocacy groups such as the National Organization for Rare Disorders, Global Genes Project, Children's Rare Disease Network, Abetalipoproteinemia Collaboration Foundation, Zellweger Baby Support Network, and the Friedreich's Ataxia Research Alliance have been founded in order to advocate on behalf of patients suffering from rare diseases with a particular emphasis on diseases that afflict children.[3]

Industry involvement[edit]

Key orphan drug developers are Synageva BioPharma, Swedish Orphan Biovitrum, Shire plc, GlaxoSmithKline, Pfizer, Novartis, Genzyme, Lundbeck, Prosensa, Agilis Biotherapeutics, QOL Medical, BioMarin and Alexion Pharmaceuticals. These pharmaceutical companies work together with national bodies such as the U.S.'s National Organization for Rare Disorders (NORD), Avella Specialty Pharmacy[19] and the European Organization for Rare Diseases (EURORDIS) to advance this field.

Research centers[edit]

The Center for Orphan Drug Research at the University of Minnesota College of Pharmacy provides help to small companies with insufficient in-house expertise and resources in the areas of drug synthesis, formulation, pharmacometrics, and bio-analysis.[20] The Keck Graduate Institute Center for Rare Disease Therapies (CRDT) in Claremont, California, supports projects to revive potential orphan drugs whose development has stalled by identifying barriers to commercialization such as problems with formulation and bio-processing.[20]


According to a 2014 report by Andreas Hadjivasiliou, published by Evaluate Pharma, in the last few years, the orphan drug market has become increasingly lucrative because the cost of clinical trials for orphan drugs is substantially lower than for other diseases—trial sizes are naturally much smaller than for more common diseases with larger numbers of patients— and there is a lack of alternative therapies for rare diseases. Small clinical trials and little competition place these "orphan agents" at an advantage when they come up for regulatory review. There is a further reduction to the cost of development because of the tax incentives in the Orphan Drug Act 1983. On average the cost per patient for orphan drugs is "six times that of non-orphan drugs, a clear indication of their pricing power."[1] Partly as a result of the 1983 US Orphan Drug Act, Japan adopted it in 1993 as did the European Union in 2000.[1]

The 2014 Orphan Drug report that orphan drug designations continue to increase rapidly. There are soaring forecasts for sales of orphan drugs and the percentage of sales of total share of prescription drug sales is increasing at rapid rate. By 2020 the total is predicted to be $176 billion.[1]

Although there are much smaller orphan disease populations are the smallest, the cost of per-patient outlays are the largest. Hadjivasiliou argues that there will be more pressure on pharmaceuticals that "represent the biggest budgetary drain" particularly as more people with rare diseases—in the United States for example—will be eligible for public subsidies through the Affordable Care Act.[1]

Evaluation criteria for public-funding of orphan drugs[edit]

By 2007 the use of economic evaluation methods regarding public-funding of orphan drugs, using estimates of the incremental cost-effectiveness, for example, became more established internationally.[21] The QALY has often been used in cost-utility analysis to calculate the ratio of cost to QALYs saved for a particular health care intervention.[22][23] By 2008 the National Institute for Health and Care Excellence (NICE) in England and Wales, for example, operated with a threshold range of £20,000–£30,000 per Quality-adjusted life year (QALY).[24] By 2005 doubts were raised about the use of economic evaluations in orphan drugs.[21] By 2008 most of the orphan drugs appraised had cost-effectiveness thresholds "well in excess of the ‘accepted’ level and would not be reimbursed according to conventional criteria."[24] As early as 2005 McCabe et al argued[25][26] that rarity should not have a premium and orphan drugs should be treated like other pharmaceuticals in general.[25][26] Drummond et al[26] argued that the social value of health technologies should also be included in the assessment along than the estimation of the incremental cost-effectiveness ratio.


By 2008 if an orphan drug cost more than £30,000[clarification needed] NICE required other arguments for funding.[24]

In 2015 NICE held consultations with "patient groups, the Department of Health, companies, learned societies, charities and researchers" regarding the appraisal of medicines and other technologies. There was a call for more research into new processes including the [27]

"model of pharmaceutical research and development, the expectations that companies and patient groups have about how risk and reward is shared between the industry and a publicly funded NHS, and in the arrangements for commissioning expensive new treatments."

— NICE 2014

See also[edit]


  1. ^ a b c d e f Hadjivasiliou, Andreas (October 2014), "Orphan Drug Report 2014" (PDF), EvaluatePharma, retrieved 28 June 2015 
  2. ^ a b Rich Daly (5 September 2002). "House Offers Incentives For Development of 'Orphan' Drugs". Congressional Quarterly Daily Monitor. 
  3. ^ a b c d Armstrong, Walter (May 2010). "Pharma's Orphans". Pharmaceutical Executive. 
  4. ^ a b c Laura Gaze, Jennifer Breen (2012), "The Economic Power of Orphan Drugs" (PDF), Thomson Reuters, retrieved 29 June 2015 
  5. ^ a b c Kiran N. Meeking, Cory S.M. Williams, John E. Arrowsmith (15 August 2012), Orphan drug development: an economically viable strategy for biopharma R&D, doi:10.1016/j.drudis.2012.02.005, retrieved 29 June 2015 
  6. ^ Shannon Gibson, Hamid R Raziee, and Trudo Lemmens (19 March 2015). "Why the Shift? Taking a Closer Look at the Growing Interest in Niche Markets and Personalized Medicine". World Medicine Health Policy 7 (1): 3–27. doi:10.1002/wmh3.131. Retrieved 29 June 2015. 
  7. ^ a b c d e f g Global orphan drug market to reach US$ 120 billion by 2018, New Delhi: Kuick Research, 7 Feb 2014, retrieved 20 March 2014 
  8. ^ Henkel, John (1999). "Orphan Drug Law Matures into Medical Mainstay". FDA Consumer. U.S. Food and Drug Administration. Retrieved 14 February 2009. 
  9. ^ a b c Pollack, Andrew (30 April 1990). "Orphan Drug Law Spurs Debate". The New York Times. Retrieved 15 February 2009. 
  10. ^ a b Illingworth, Patricia; Cohen, Jillian; Illingworth, P (2004). "Orphan Drug Policies: Implications for the United States, Canada, and Developing Countries". Health Law Journal 12: 183–200. PMID 16539081. 
  11. ^ "Orphan disease definition - Medical Dictionary definitions of popular medical terms easily defined on MedTerms". Medterms.com. 2002-08-25. Retrieved 2010-06-07. 
  12. ^ Lang, Michelle. "Pervasis drug candidate gets EU orphan drug status". Mass High Tech. Retrieved 1 March 2011. 
  13. ^ Donna Young (2007-11-28). "U.S., EU Will Use Same Orphan Drug Application.". BioWorld News (Washington). Archived from the original on 2007-12-11. Retrieved 2008-01-06. In an attempt to simplify the process for obtaining orphan status for medications targeting rare diseases, the FDA and the European Medicines Agency (EMA) have created a common application. ... U.S. and European regulators still will conduct independent reviews of application submissions to ensure the data submitted meet the legal and scientific requirements of their respective jurisdictions, the agencies said. 
  14. ^ a b c Andrew Duffy (23 February 2002). "ORPHAN DISEASES A RARE OCCURRENCE: A desperate search for help; County family joins long list with rare diseases in seeking a miracle". Windsor Star (Ontario). 
  15. ^ Denis, Alain; Mergaert, Lut; Fostier, Christel; Cleemput, Irina; Simoens, Steven (2010). "Issues Surrounding Orphan Disease and Orphan Drug Policies in Europe". Applied Health Economics and Health Policy 8 (5): 341. doi:10.2165/11536990-000000000-00000. 
  16. ^ siope.eu
  17. ^ Andrew Duffy (25 January 2002). "Rare diseases' troubling questions". Cobourg Daily Star (Ontario). 
  18. ^ clinuvel.com
  19. ^ Christopher Geoffrey McPherson (1 July 2014). "Avella Specialty Pharmacy attorney fulfills dream through medicines". AZCentral. Retrieved 5 July 2014. 
  20. ^ a b Wechsler, Jill (July 2008). "Celebrating 25 Years of Orphan Drugs". Pharmaceutical Technology. 
  21. ^ a b Drummond MF, Grubert N. (2007), International Trends in the Use of Health Economic Data, Spectrum Report, Decision Resources, Waltham MA 
  22. ^ "Measuring effectiveness and cost effectiveness: the QALY". NICE. 20 April 2010. Retrieved 15 Jun 2015. 
  23. ^ "Guide to the methods of technology appraisal 2013". NICE. 2013. Retrieved 15 Jun 2015. 
  24. ^ a b c Drummond, Michael F (2008), "Challenges in the economic evaluation of orphan drugs", Eurohealth (World Health Organization) 14 (2): 16– 257 
  25. ^ a b McCabe C, Claxton K, Tsuchiya A. (2005). "Orphan drugs and the NHS". British Medical Journal 331 (4): 1016–19. 
  26. ^ a b c McCabe C, Tsuchiya A, Claxton K, Raftery J. (2007). "Assessing the economic challenges posed by orphan drugs: a comment on Drummond et al.". International Journal of Technology Assessment in Health Care 23 (3): 397–404. 
  27. ^ "NICE calls for a new approach to managing the entry of drugs into the NHS", NICE, 18 September 2014 

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