Sobi is active in the market for specialty pharmaceuticals and orphan drugs.
Estimated size of orphan drugs market
The global market for orphan drugs is estimated at USD 84.9 billion, of which the US accounts for about half1). Europe is the second largest market. The global market is expected to expand at an annual average rate of 5.7%, and amount to USD 112.1 billion in 20141).
Orphan drug market in Europe 2005 - 2015
Orphan drugs have a high degree of differentiation and are sold in low volumes compared with pharmaceuticals for general use and generic preparations. There is seldom more than one orphan drug for the treatment of a rare disease.
Rare diseases affect a small number of patients who are often geographically spread but can be reached through networks of specialist doctors.
Since these diseases are often life-threatening, prompt action is required in distributing often small volumes of the pharmaceuticals.
The market is relatively fragmented, with the ten largest orphan drugs companies accounting for about one third of the total global market.
Key competitive advantages
Key competitive advantages in this market include:
- Strong local presence
- A knowledgeable market organisation
- Good relations with governmental and regulatory authorities as well as key stakeholders such as specialist physicians and patient organisations.
Legislation and guidelines relating to orphan drugs have been enacted to support the need and importance of developing new treatments for rare and often serious illnesses. This has resulted in new treatments and a rapid increase in the number of approved orphan drugs.
- In 1983 the US passed legislation to promote the development and marketing of orphan drugs.
- Similar legislation was passed in Japan in 1993, Australia in 1998 and in the EU in 2000.
- Other markets such as Russia, India and China have initiated discussions regarding orphan drug legislation.
The development of orphan drugs is often marked by close cooperation among key stakeholders, such as specialist physicians, patient organisations and drug companies.
Rising costs for health and medical care in many countries have led governments and other payers to set priorities resulting in price reductions.
Orphan drug prices are determined through negotiation between the authorities and holders of the marketing license and are often based on health-economics analyses.
As the prices of orphan drugs are considerably higher per patient than in the case of traditional pharmaceuticals, not as many patients are required to make a potential drug attractive in terms of revenue, which is the intention of the legislation.
Orphan drug status
Orphan drug status means that a company that has developed an orphan drug which reaches the market first, receives market exclusivity for ten years in the EU and seven years in the US, with an option for extension under certain circumstances.
Named patient use
Even during the period when a drug is in clinical testing, individual patients may gain access to the product. This is called named patient use and is rising steadily. This means that patients with serious or life-threatening diseases that lack approved treatment gain access to treatments that have not yet gone through a formal regulatory approval process in the specific country, but may be approved in some other jurisdiction worldwide.
1) Global markets for orphan drugs Phm038c 2010, Bcc Research.