Vital Signs The Analyst's Perspective - April 2016 Issue 

Vital Signs The Analyst's Perspective - April 2016 Issue 

  • May 2016 •
  • 6 pages •
  • Report ID: 3898037 •
  • Format: PDF
Trends in Orphan New Molecular Entities – Half are First in Class Source: Health Affairs, March 2016

Orphan drugs are defined as “drugs that are used to treat rare diseases or conditions which (A) affect less than persons in the United States or (B) more than in the United States where there is no reasonable expectation that the cost of developing and marketing in the United States for such a disease or condition will be recovered from sales in the United States for such a drug.”1 In 2015, a total of drugs were approved by the FDA, of which , or %, were for orphan indications. Over half of the new orphan indication approvals were oncology related.

The Analyst’s Perspective by Barbara Gilmore, Senior Industry Analyst, Life Sciences According to the FDA, once an orphan drug designation has been granted, the company developing the drug is eligible for numerous financial incentives, including but not limited to tax deductions for clinical trial expenditures, waiver of FDA user fees for the orphan indication, and seven extra years of exclusivity once the drug is approved for the orphan indication.

The FDA has recently reviewed trends in orphan new molecular entities (NME) for the period 1983–2014. From the time Congress passed the Orphan Drug Act in 1983 until 2014, the FDA approved drugs as NMEs. According to the FDA economist Kathleen Miller, over were first in class and % received a priority review. In total, the group of approved drugs did address the unmet medical needs of many diseases. Trends that emerged from the FDA study indicated that although orphan approvals have spanned all therapeutic categories, there has been a much greater focus on oncology therapies ( %) in recent years, followed by metabolic disorders ( %), infectious diseases ( %), neurological disorders ( %), and hematological disorders ( %). It was speculated that the advances in the identification of genomic subgroups in the oncology tumor milieu were responsible for driving the increase in orphan oncology NMEs.

There is growing belief in the reimbursement segment of the healthcare industry, as well as in the US Congress, that the costs of drugs are out of control, resulting in an enormous drug spend that is benefiting only a fraction of the population. When the prices for approved drugs garner blockbuster status, it is an understandable concern. It is safe to conclude that revenues generated from orphan drugs will be scrutinized as more of these drugs are approved as secondary indications, where a non-orphan indication already is in place.