<div>With one-third of all new approved drugs over the past five years in the US addressing rare diseases, the last decade is said to have been the most productive period in the history of orphan drug development. Rare diseases are often referred to as orphan diseases, and a drug that has been developed specifically to treat a rare medical condition is designated as an orphan drug.<br /><br />For a long time now, pharmaceutical companies have been staying away from developing orphan drugs because of spiralling costs of development and stringent regulations, and that orphan drugs offer limited market size. Rare Disease India (RDI), a volunteer-driven online entity, describes a rare disease as one that has fewer than 100 patients per 1,00,000 population. Today, approximately 7,000 rare diseases have been estimated across the globe. One in every 10 Americans is affected with a rare disease. In India, 72 lakh people are estimated to be affected by rare diseases, as per the RDI data.<br /><br />The US in 1983 became the first country to propose a legal framework to encourage the development of orphan drugs. The US, the EU, and Japan are said to have the most well-defined frameworks for the development of orphan drugs. While the assignment of orphan status to a disease or drug is a matter of public policy of any country, overall the framework allows for incentivising pharmaceutical companies. This has resulted in medical breakthroughs that may not have otherwise been achieved. In the US, when a drug is given the orphan status, it enjoys market exclusivity for seven years, and in the EU and Japan it is 10 years.<br /><br />“There are basically two strategies to encourage orphan drug development. The push strategy and the pull strategy. Under the push strategy, pharma companies are given grants to design and conduct trials, and the pull strategy involves tax credits and other financial incentives,” said Christopher Milne, Director of Research and Research Associate Professor at the Tufts Center for the Study of Drug Development. <br /><br />Moreover, “orphan drugs typically take fewer resources to develop”, he notes. He adds that for orphan drugs, the sample size required for trials is generally a third of that of non-orphan drugs. <br /><br />“For orphan drugs, the sample size would probably be a 100, whereas for non-orphan drugs, it will be around 500,” he says. Another thing is that for rare diseases, marketing expenses are less. It is said that half of the orphan drugs that were approved over the last 10 years have been from Big Pharma, and a quarter of the biologics approves have been orphan drugs. Despite the limited market, Big Pharma and biologics are becoming very active in the space. Biologics account for a major share of the orphan drugs market (over 50 per cent).<br /><br />No pricing mechanism<br /><br />Another trigger for the development of orphan drugs, one that probably overrides the others, is that there is no regulation on the pricing mechanism for orphan drugs. “Discussions on an inclusive and standardised pricing mechanism for orphan drugs have remained just that — discussions”, said Milne. “We are seeing prices rising to even as much as $100,000 per year,” he added. On an average, orphan drugs are priced higher than non-orphan drugs, and now with more indications being discovered and more drugs being developed, payers may have to bear the heat.<br /><br />In the US, medical reimbursements are covered within the the state’s public health policy, “On an average, price sharing for an orphan drug is twice that of a non-orphan drug,” said Joshua Cohen, Research Associate Professor at the Tufts Center for the Study of Drug Development. While in the case of non-orphan drugs, price sharing is about 10 per cent for the patient, for orphan drugs, the patient may have to bear up to 20 per cent, he said. “Pricing is mostly a pre-market exercise, and is up to the discretion of the pharma company,” he said. About the burden it lays on insurers, he said, “Since the market size is limited, it is really about how much of an impact it has on the overall budget. Has it come to a stage where they can’’t afford it? Until this point, they are not as concerned about prices.”<br /><br /> Many orphan drugs target life threatening conditions, which makes patients also less price sensitive. “Since orphan drugs should not be used off label, it cannot be used in a manner not specified in the FDA’s approved packaging label. But when the number of indications for an orphan drug goes up, it increases the demand for the drug, additionally it increases the burden on payers because the proportion of patients in need of the drug rises,” he said. It has been found that nearly 15 per cent of the approved orphan drugs subsequently add more common diseases to their treatments. However, “Even though they may cost a lot of money, if you look at what they could potentially save in terms of hospitalisation, medical procedures, etc., they potentially seem more economical — over the time it saves the system more money,” Cohen states.<br /><br />“The orphan drug market is basically a western concept to encourage and incentivise the pharmaceutical industry to develop drugs that have a small proposed markets for consumption,” says Dr Gopal Dabade, who is an active member of the All India Drug Action Network, a group of NGOs which has moved the Supreme Court for affordable drugs. “Here, we don’t even have a clear design of the pattern of diseases, which makes it difficult to enlist ‘orphan diseases’,” he said. And as for as pricing is concerned, “In India there is the Drug Price Control Ordinance of 2013, that applies to drugs that have a market of above some limit. So there is no question of fixing of prices of drugs that have a small market,” said Dr Dabade.<br /><br />The Stempeucel factor<br /><br />Earlier this year, Stempeutics Research, a group company of Manipal Education and Medical Group, and a Joint Venture with Cipla Group, received an Orphan Drug Designation (ODD) from the European Union for its drug Stempeucel for the treatment of Thromboangiitis Obliterans. “Thromboangiitis Obliterans or Buerger's disease is a rare and severe disease affecting the blood vessels of the legs. It is considered as an orphan indication in the US, the EU, and Japan,” said B N Manohar, CEO of Stempeutics.<br /><br />Stempeucel had to prove its efficacy against Ilomedin. The active ingredient in Ilomedin, Iloprost was given the ODD earlier for the indication in the EU. “It took the company seven years to develop the stem-cell based drug, for which it was given the ODD based on phase-2 data from India,” he said. “Being stem-cell based, it addresses the root of the problem and not just the symptoms. It is a regenerative drug,” he said. “It is administered as a one-time injection, which takes about half an hour to one hour. <br /><br />Hopefully a second injection will not be required.” In the EU it is priced in the range of $25,000-$30,000, and in the US, we would hope to price it somewhere in the range of $60,000 - $90,000, he said. “The price is higher in the US because the reimbursement is higher there.” But even with high prices, the fact that the treatment is curative and ideally a one-time deal, makes it more economical, he says. The US and the EU are estimated to have 1,00,000 patients each, while in India, 2,00,000 patients are estimated to be suffering from the disease. Reports say that if launched, a vial of Stempeucel is set to cost Rs 1 lakh in India. <br /><br />In a commentary published last month in the American Journal of Clinical Oncology, it is said that Rituximab, the number-one selling orphan drug, generated $3.7 billion in domestic sales in the US in 2014. Of the 41 drugs approved by the FDA in 2014, 18 are said to have had orphan status designations. Orphan drugs are expected to generate sales totaling $107 billion in 2015, and the number is set to reach $176 billion in 2020. Expected growth in the orphan drug market, at 5.3 per cent between 2014-2020, which is almost double that of the overall prescription drug market. Orphan drugs are set to account for 19.1 per cent of global prescription sales in 2020, excluding generics, up from 6.3 per cent in 2000. <br /><br />What works for India?<br /><br />Drug development is considerably less expensive to conduct in India<br />Orphan drugs are often derived from already approved drugs or at least ones that have been previously studied.<br />Drugs in the field of gene therapy, that are curative, are entering the market. This reduces long-term costs to the healthcare system<br />Pharma companies are quite optimistic about the Indian market, and are willing to place their bets here<br /><br />India has a long way to go<br /><br /> Even with a broad capacity in biopharmaceutical R&D, it is mostly focused on developing generics or providing API and other R&D services for the brand name drug industry.<br />India has to deal with health challenges, hence it can afford very small per capita health spend on orphan diseases<br />Additionally, in India medical expenses are still primarily paid from out-of-pocket<br /> Most importantly, India does not have a regulatory framework for orphan drugs<br /><br /><br /></div>
<div>With one-third of all new approved drugs over the past five years in the US addressing rare diseases, the last decade is said to have been the most productive period in the history of orphan drug development. Rare diseases are often referred to as orphan diseases, and a drug that has been developed specifically to treat a rare medical condition is designated as an orphan drug.<br /><br />For a long time now, pharmaceutical companies have been staying away from developing orphan drugs because of spiralling costs of development and stringent regulations, and that orphan drugs offer limited market size. Rare Disease India (RDI), a volunteer-driven online entity, describes a rare disease as one that has fewer than 100 patients per 1,00,000 population. Today, approximately 7,000 rare diseases have been estimated across the globe. One in every 10 Americans is affected with a rare disease. In India, 72 lakh people are estimated to be affected by rare diseases, as per the RDI data.<br /><br />The US in 1983 became the first country to propose a legal framework to encourage the development of orphan drugs. The US, the EU, and Japan are said to have the most well-defined frameworks for the development of orphan drugs. While the assignment of orphan status to a disease or drug is a matter of public policy of any country, overall the framework allows for incentivising pharmaceutical companies. This has resulted in medical breakthroughs that may not have otherwise been achieved. In the US, when a drug is given the orphan status, it enjoys market exclusivity for seven years, and in the EU and Japan it is 10 years.<br /><br />“There are basically two strategies to encourage orphan drug development. The push strategy and the pull strategy. Under the push strategy, pharma companies are given grants to design and conduct trials, and the pull strategy involves tax credits and other financial incentives,” said Christopher Milne, Director of Research and Research Associate Professor at the Tufts Center for the Study of Drug Development. <br /><br />Moreover, “orphan drugs typically take fewer resources to develop”, he notes. He adds that for orphan drugs, the sample size required for trials is generally a third of that of non-orphan drugs. <br /><br />“For orphan drugs, the sample size would probably be a 100, whereas for non-orphan drugs, it will be around 500,” he says. Another thing is that for rare diseases, marketing expenses are less. It is said that half of the orphan drugs that were approved over the last 10 years have been from Big Pharma, and a quarter of the biologics approves have been orphan drugs. Despite the limited market, Big Pharma and biologics are becoming very active in the space. Biologics account for a major share of the orphan drugs market (over 50 per cent).<br /><br />No pricing mechanism<br /><br />Another trigger for the development of orphan drugs, one that probably overrides the others, is that there is no regulation on the pricing mechanism for orphan drugs. “Discussions on an inclusive and standardised pricing mechanism for orphan drugs have remained just that — discussions”, said Milne. “We are seeing prices rising to even as much as $100,000 per year,” he added. On an average, orphan drugs are priced higher than non-orphan drugs, and now with more indications being discovered and more drugs being developed, payers may have to bear the heat.<br /><br />In the US, medical reimbursements are covered within the the state’s public health policy, “On an average, price sharing for an orphan drug is twice that of a non-orphan drug,” said Joshua Cohen, Research Associate Professor at the Tufts Center for the Study of Drug Development. While in the case of non-orphan drugs, price sharing is about 10 per cent for the patient, for orphan drugs, the patient may have to bear up to 20 per cent, he said. “Pricing is mostly a pre-market exercise, and is up to the discretion of the pharma company,” he said. About the burden it lays on insurers, he said, “Since the market size is limited, it is really about how much of an impact it has on the overall budget. Has it come to a stage where they can’’t afford it? Until this point, they are not as concerned about prices.”<br /><br /> Many orphan drugs target life threatening conditions, which makes patients also less price sensitive. “Since orphan drugs should not be used off label, it cannot be used in a manner not specified in the FDA’s approved packaging label. But when the number of indications for an orphan drug goes up, it increases the demand for the drug, additionally it increases the burden on payers because the proportion of patients in need of the drug rises,” he said. It has been found that nearly 15 per cent of the approved orphan drugs subsequently add more common diseases to their treatments. However, “Even though they may cost a lot of money, if you look at what they could potentially save in terms of hospitalisation, medical procedures, etc., they potentially seem more economical — over the time it saves the system more money,” Cohen states.<br /><br />“The orphan drug market is basically a western concept to encourage and incentivise the pharmaceutical industry to develop drugs that have a small proposed markets for consumption,” says Dr Gopal Dabade, who is an active member of the All India Drug Action Network, a group of NGOs which has moved the Supreme Court for affordable drugs. “Here, we don’t even have a clear design of the pattern of diseases, which makes it difficult to enlist ‘orphan diseases’,” he said. And as for as pricing is concerned, “In India there is the Drug Price Control Ordinance of 2013, that applies to drugs that have a market of above some limit. So there is no question of fixing of prices of drugs that have a small market,” said Dr Dabade.<br /><br />The Stempeucel factor<br /><br />Earlier this year, Stempeutics Research, a group company of Manipal Education and Medical Group, and a Joint Venture with Cipla Group, received an Orphan Drug Designation (ODD) from the European Union for its drug Stempeucel for the treatment of Thromboangiitis Obliterans. “Thromboangiitis Obliterans or Buerger's disease is a rare and severe disease affecting the blood vessels of the legs. It is considered as an orphan indication in the US, the EU, and Japan,” said B N Manohar, CEO of Stempeutics.<br /><br />Stempeucel had to prove its efficacy against Ilomedin. The active ingredient in Ilomedin, Iloprost was given the ODD earlier for the indication in the EU. “It took the company seven years to develop the stem-cell based drug, for which it was given the ODD based on phase-2 data from India,” he said. “Being stem-cell based, it addresses the root of the problem and not just the symptoms. It is a regenerative drug,” he said. “It is administered as a one-time injection, which takes about half an hour to one hour. <br /><br />Hopefully a second injection will not be required.” In the EU it is priced in the range of $25,000-$30,000, and in the US, we would hope to price it somewhere in the range of $60,000 - $90,000, he said. “The price is higher in the US because the reimbursement is higher there.” But even with high prices, the fact that the treatment is curative and ideally a one-time deal, makes it more economical, he says. The US and the EU are estimated to have 1,00,000 patients each, while in India, 2,00,000 patients are estimated to be suffering from the disease. Reports say that if launched, a vial of Stempeucel is set to cost Rs 1 lakh in India. <br /><br />In a commentary published last month in the American Journal of Clinical Oncology, it is said that Rituximab, the number-one selling orphan drug, generated $3.7 billion in domestic sales in the US in 2014. Of the 41 drugs approved by the FDA in 2014, 18 are said to have had orphan status designations. Orphan drugs are expected to generate sales totaling $107 billion in 2015, and the number is set to reach $176 billion in 2020. Expected growth in the orphan drug market, at 5.3 per cent between 2014-2020, which is almost double that of the overall prescription drug market. Orphan drugs are set to account for 19.1 per cent of global prescription sales in 2020, excluding generics, up from 6.3 per cent in 2000. <br /><br />What works for India?<br /><br />Drug development is considerably less expensive to conduct in India<br />Orphan drugs are often derived from already approved drugs or at least ones that have been previously studied.<br />Drugs in the field of gene therapy, that are curative, are entering the market. This reduces long-term costs to the healthcare system<br />Pharma companies are quite optimistic about the Indian market, and are willing to place their bets here<br /><br />India has a long way to go<br /><br /> Even with a broad capacity in biopharmaceutical R&D, it is mostly focused on developing generics or providing API and other R&D services for the brand name drug industry.<br />India has to deal with health challenges, hence it can afford very small per capita health spend on orphan diseases<br />Additionally, in India medical expenses are still primarily paid from out-of-pocket<br /> Most importantly, India does not have a regulatory framework for orphan drugs<br /><br /><br /></div>
