New York, NY — The growing appeal of orphan drugs to manufacturers isn’t a groundbreaking story, but a new report identifies some head-spinning facts behind the focal shift from blockbuster to rare-disease drugs. The latter of these is defined as those drugs “intended for the safe and effective treatment, diagnosis or prevention of rare diseases/disorders that affect fewer than 200,000 people in the U.S., or that affect more than 200,000 persons but are not expected to recover the costs of developing and marketing a treatment drug.” The FDA’s incentives for such products are so compelling that, last year, FDA Commissioner Scott Gottlieb unveiled the Orphan Drug Modernization Plan, for eliminating his agency’s backlog of requests for orphan-drug designation. And, according to marketing insights firm Flaum Navigators, the allure of orphan drugs goes far beyond FDA incentives and faster approvals.  

Depression, diabetes, and other widespread, chronic diseases are often seen by pharmaceutical companies as most profitable, given their enormous patient numbers, and the fact that those patients tend to continue taking their needed drugs for many years. But research may soon illuminate that many of the “big” diseases are actually products of many smaller diseases, combined. Accordingly, what may seem like a rare-disease state now may turn out to find outsized benefits and sales down the line. 

As Flaum Navigators principal Sander Flaum writes, “How else can we explain the wide variability in response and tolerability to drugs in broad therapeutic categories?” For instance, non-Hodgkin’s lymphoma is now recognized as a collection of other diseases, each with a corresponding best regimen. 

Why This Matters

With many investments in R&D outgrowing their likely profits, and the NYSE Arca Pharmaceutical Index underperforming the S&P 500 by 30% over the last two years, many drug companies are likely looking for a revenue spike. Orphan drugs may offer just that—if not a blockbuster-caliber jump—with some PR perks too. 

As Flaum writes, “When you develop medications for diseases for which there are no approved treatments, let alone cures, you’re getting back to the roots of what made our industry so great.”

About the Author:

Ben helps spark innovative healthcare thinking as Associate Director of Innovation. Previously on the editorial staff of Vanity Fair, he brings experience in engaging, rigorous storytelling to the healthcare world. Ben’s goals are to move brands to rethink their roles, own their evolving narratives, and maintain vital and vigorous consumer relationships.