Will Pharma Companies Continue to Adopt Orphan Drugs?
A report recently published by Evaluate titled “Are Orphan Drugs Losing Their Sparkle” might sound apprehensive, but it highlights why pharma companies can still expect plenty of promise and activity within the orphan drug sector.
In 2023, almost 60% of FDA new drug approvals were for orphan drugs developed to treat rare diseases - incentivized by the Orphan Drug Act - despite concerns caused by market or pricing pressures. Predicted sales for orphan drugs are estimated to grow from $185 bn in 2024 and reach almost $270 bn by 2028, with just the top three drugs - Darvalex (J&J), Trifacta (Vertex Pharmaceuticals) and Hemlibra (Roche & Chugai Pharmaceuticals) - expected to contribute $57 bn to the 2028 target.
The gap between orphan and non-orphan drug sales is narrowing, and orphan drug sales growth is likely to decline to single digits, compared with almost 11% growth in the decade up to 2023. Their slowing growth can be attributed to a multitude of reasons: high drug prices are drawing increasing scrutiny from payers, who are prioritizing broader health issues over rare diseases; market saturation is causing increased competition from challenger brands; but most notably, the growing pressures bought about by the Inflation Reduction Act (IRA) are fuelling uncertainty.
Despite the challenges, the sector still attracts significant investment - highlighted by major acquisitions such as AbbVie’s $63 bn acquisition of Allergan, which was partially motivated by the latter’s orphan drug portfolio. A shift toward neglected therapy areas including CNS, immunomodulatory and musculoskeletal conditions is also likely to provide additional growth opportunities.
Although growth projections, innovation, and investment from leading pharmaceutical companies suggest a promising future for orphan drugs, the sector will face certain challenges over the next decade, including regulatory and legislative changes related to the IRA and Orphan Drug Act.
The following article originally appeared in Evaluate.
Over the last decade, orphan drugs have consistently outpaced their non-orphan counterparts in growth. They’ve doubled their market share in global prescription drug sales, climbing from less than 10% in 2014 to nearly 20% today. This year, they’re on track to generate an impressive $185 billion and are projected to hit around $270 billion by 2028.
But the gloss is wearing off and the growth advantage for orphan drugs is starting to narrow. Although orphan drug sales have increased by nearly 11% annually up to 2023, this rate is expected to just scrape double digits through the rest of this decade.
Still, the market for niche products remains strong. The ten most valuable orphan drugs are set to generate over $57 billion in total by 2028. But it’s worth noting that the Inflation Reduction Act and other potential regulatory shifts could impact the landscape.
This report explores the leading players, key pipeline drugs and the current state of the orphan drug market, offering insights into where things are heading.
For more, please find the original story source here.
