350 million people worldwide with rare diseases

Some people assume that finding treatments for rare diseases offers little economic incentive for biopharmaceutical companies. If these diseases are so rare, the argument goes, who is going to buy the product.

But that is a misconception. Research into rare disease treatment can be quite lucrative. They actually have a large potential market size with high market growth rate compared with the overall prescription drug market. And the severity of unmet need and general lack of competition in these categories leave potential to charge a premium making rare disease treatments are an attractive option for biopharma. 

Consider the facts: 

1. Roughly 30 million people in the US and another 30 million people in the EU suffer from rare diseases. Even with more than 400 products on the market today and a number of new products being approved, there are still a lot of latent unmet medical needs. 

2. The US Food and Drug Administration (FDA) and other governmental agencies now offer explicit economic incentives to develop orphan drugs as a way to encourage research and development in this important sector. 

3. This category is currently experiencing high market growth, with some estimates suggesting it will double the non-orphan drug prescription market in terms of compound annual growth rate for the next 5-10 years. 

4. The drug companies appreciate that there is a correlation in treating a severe unmet medical need and return on investment. This is an area they can ensure premium pricing based on developing a premium product. 

However there are clinical, economic, and humanistic challenges biopharma companies must overcome for any orphan drug to be successful. 

There are four critical issues to consider: 

Value based pricing: Orphan drugs command premium pricing, but that pricing also draws added scrutiny from regulators, physicians and patients. Biopharma companies must remain cognizant of stakeholders concerns, and price these products in a value-based way if they want them to be adopted. 

Ensuring coverage. Many of the big payers in the EU and US look at rare disease as such a small sample that they want to steer clear of making exclusive decisions about coverage, using step edits, prior authorization, or other types of payer controls to manage their risks. They are also pushing more costs to patients as a way to control utilization of the product. All of these issues need to be considered as part of the go-to-market plan. 

Biopharma companies need to strategize how they can ensure adequate coverage for the product across different payers. 

Providing access. Coverage doesn’t ensure access. Once a product is priced and coverage is optimized, they need to think about access and adoption. This includes making sure patients can access not only the drug, but also proper diagnostic mechanism, triage, and centers of excellence focused on that rare disease. 

Adoption. Once the price is set, coverage is granted and you are achieving access, you need to be sure the physicians and the patients are adopting the medication. A misconception persists that rare diseases ‘fly under the radar’ in healthcare systems and thus don’t warrant the attention of health technology assessments. HTAs and CER can provide evidence of value. However, unique challenges for rare diseases include lack of patients and data, and the fact that risk-benefit may be considered differently. 

Many times we see a drop off in persistence with these medications, so biopharma companies should consider what go-to-market strategies will encourage adherence among patient populations.

Topics in this blog post: Biopharma, Orphan Drugs, Market Access, Payers, EMA, FDA, Rare Diseases