Tag Archives: Orphan

A Rare Strategic Acrobatic Feat in Covid Time

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‘Keep nose to the grindstone while lifting eyes to the hills.’ Quite a while ago, all-time global management guru – Peter Drucker used this essential acrobatic feat as an example, for the business strategists. This illustration signifies the criticality of harmonizing decisions affecting both the short and the long-term goals of an organization, for a sustainable business excellence.

In most recent times, the pharma major AstraZeneca that has virtually become one of the household names, for developing a Covid-19 vaccine candidate with the University of Oxford, has performed the above acrobatic feat – with precision. During the prevailing unprecedented health crisis, the Company has unequivocally proven that it remains on course – in achieving its dual objectives, as Drucker had prescribed in his management classic – ‘The Practice of Management.’

It happened in tandem – without getting overwhelmed by the disruptive forced of Covid pandemic, unlike most others. Immediately, the Company focused on an urgent objective of saving the humanity – by developing, manufacturing and delivering a Covid vaccine to the world, in a record time. This was possibly a relatively short-term goal. And closely followed the other – a critical strategic decision for the organization’s long-term sustainable business excellence.

I have discussed before, the Company’s first initiative – developing a Covid vaccine candidate with the University of Oxford. Hence, in this article, I shall focus on two other related areas:

  • Deadly impact of rare diseases in some Covid infected young patients.
  • Why not some large Indian companies also explore similar strategies as demonstrated by AstraZeneca – and the reasons behind the same?

Before going into those areas up front, let me start with a brief description of AstraZeneca’s intent to expand its footprint in the of area of rare diseases, besides immunology area to help treat rare types of cancer.

The acquisition:

On December 12, 2020 AstraZeneca announced that to accelerate its strategic and financial development, the company will acquire Alexion valuing $39 billion. Subject to all statutory approvals, the deal is expected to close in the third quarter of 2021. Interestingly, Alexion’s top brand – Soliris, is the world’s one of the most expensive drugs in the world. It is prescribed to treat a rare – life-threatening blood disease paroxysmal nocturnal hemoglobinuria (PNH). Incidentally, rare diseases have also some significant relevance for Covid infected patients. Let me now recapitulate, some key aspects of rare diseases.

Some key aspects of rare diseases: 

Rare Diseases (RD) – also referred to as Orphan Disease (OD), are diseases affecting a small percentage of the population, and include genetic diseases, rare cancers, infectious tropical diseases and degenerative diseases. There is no universally accepted definition of a rare disease, yet. Different countries define these differently. However, the common considerations in the definitions are, primarily, disease prevalence and to a varying extent – severity and existence of alternative therapeutic options.

Impact of some rare diseases in Covid infected patients: 

Since the beginning of the Covid pandemic, people with underlying diseases, such as, hypertension, diabetes, cardiovascular and kidney disorders, are considered to fall in the high-risk group. They are more likely to have severe disease and complications and need to be extra cautious of the infection. Importantly, it has been recently reported that some rare diseases also increase risk of dying during Covid-19 pandemic at a younger age.

For example, as reported on December 07, 2020, recent studies indicate, rare autoimmune rheumatic diseases increase risk of dying during Covid-19 pandemic for younger patients. The researchers also found that women with rare autoimmune rheumatological diseases (RAIRD) had a greater increase in all-cause mortality rates during the pandemic when compared to men with RAIRD. However, there seems to be an India specific issue also in this situation, as well.

India specific issue for Covid infected patients with some rare diseases:

Some India specific issues on RD, could have a significant adverse impact on Covid infected patients in the country. One such critical issues is the ‘Baseline Knowledge of Rare Diseases in India.’ This fact was well captured in an important survey that was published with the same name, as an original article, in the ‘International Journal of Rare Diseases & Disorders,’ on November 06, 2019.

The study noted, among others:

  • Although, rare diseases have recently received worldwide attention, the developing countries are seriously behind in regard to awareness, drug development, diagnosis, and social services, in this area. India, which has one-third of the world’s rare disease population, has no accurate assessment of the problem.
  • The drugs for ‘Rare Diseases (RD), also called Orphan Drugs (OD)’, often cost exorbitant with difficulties in diagnosis and treatments.
  • Indian policymakers want to find out the number of RD and the extent of the population suffering from them and help provide treatment for them, which is a challenging task with 1.45% GDP health care budget for 1.3 billion people.
  • The health care professionals appear to have some awareness as compared with non-healthcare professionals, but even among health care professionals, only one third had a rudimentary understanding of RD and OD, whereas three-fourths have virtually no knowledge of RD.
  • Forty-three percent of health professionals had not seen rare disease patients, and a large percent of practicing physicians had not seen even one rare disease patient in their entire professional practice.

Thus, it is clear from this survey that the most important issues are awareness and diagnosis, as many rare diseases are not diagnosed or possibly misdiagnosed. Besides, the survey also observed, since 1983, many global companies started developing orphan drugs after the Orphan Drug Act implementation. There is none at this time in India, although in 2017, the Drugs & Cosmetic Act. 1945 has been amended to include “rare diseases and orphan drugs”.

The National Policy on Rare Diseases flagged some of these facts:

The ‘National Policy on Rare Diseases 2020,’ for India, released by the Union Ministry of Health on February 07, 2020, acknowledged many of these important facts. It also said, ‘Considering the limited data available on rare diseases, and in the light of competing health priorities, the focus of the draft policy is on prevention of rare diseases as a priority as identified by experts.’

Interestingly, the first of such policy was prepared by India in 2017 and a committee was appointed to review it in 2028. However, recently published the National Policy on Rare diseases, has also noted one more important point. It noted: ‘Paradoxically, though rare diseases are of low prevalence and individually rare, collectively they affect a considerable proportion of the population in any country, which according to generally accepted international research is – between 6% and 8%.’ Currently, India, reportedly, doesn’t have any registry of rare disease, which has now been entrusted to the Indian Council of Medical Research (ICMR) in the National policy.

Common symptoms can hide underlying rare diseases, leading to misdiagnosis:

The above policy has also noted, rare diseases are characterized by a wide diversity of signs and symptoms that not only, reportedly, vary from disease to disease, but also from patient-to-patient suffering from the same disease. Importantly, relatively common symptoms can hide underlying rare diseases, leading to misdiagnosis.

During Covid treatment, similar circumstances could lead to a serious life-threatening situation. The 2020 RD Policy also reiterates: “Early diagnosis of rare diseases is a challenge owing to multiple factors that include lack of awareness among primary care physicians, lack of adequate screening and diagnostic facilities etc.” That said, yet another key question arises – will developing and marketing such drugs be profitable for the pharma industry?

Will developing such drugs be profitable for the pharma industry?

It is worth noting that the National Policy on Rare Diseases 2020, aims more at lowering the incidence and prevalence of rare diseases based on an integrated and comprehensive prevention strategy, rather than ensuring patient access to affordable treatments. Nonetheless, it also says, within the constraints on resources and competing health care priorities, India will try to enable access to affordable health care to patients of rare diseases which are amenable to one-time treatment. In general, the policy suggests, ‘voluntary crowdfunding for treatment’ of rare diseases.

With this being the prevailing situation in India, even during Covid pandemic, an interesting article – ‘How Orphan Drugs Became a Highly Profitable Industry,’ published in The Scientist, noted some important facts in this area. It highlighted: ‘Government incentives, advances in technology, and an army of patient advocates have spun a successful market—but abuses of the system and exorbitant prices could cause a backlash.’

It also articulated, despite higher costs and less-certain returns, investments in drug development on the rare diseases side appear to ‘be bucking the trend.’ The result of the global focus on RD nowadays is: ‘Firms with marketing authorization for orphan products, are now more profitable than those without.’

This also partly explains the financial rationale behind AstraZeneca’s recent acquisition of Alexion Pharmaceuticals, valuing $39 billion.

Conclusion: 

As of December 20, 2020 morning, India recorded a staggering figure of 10,031,659 of new Coronavirus cases with 145,513 deaths. The country has already crossed 10 million in Covid cases as the vaccine approval remains pending. The threat of subsequent waves for further spread of Covid infection continues to loom large in many states. Meanwhile, many studies indicate that comorbidity should now include rare diseases, as well, especially to prevent deaths in younger patients. From this perspective effective diagnosis and treatment of RD are also coming under spotlights. Curiously, the National Policy on Rare Diseases 2020 focuses more on awareness and prevention of RD rather than access to affordable treatment, particularly in Covid infected patients to save precious younger lives. As I wrote previously and still believe, the ‘National Policy on Rare Diseases’ becomes more meaningful with ‘Orphan Drugs Act.’

Vaccines to prevent Covid infections are also expected to get emergency approval in India, shortly. At lease, some of these being available at affordable prices, including AstraZeneca-Oxford vaccine, according to reports. As recent reports indicate the same company, is also entering into RD therapy areas, through a key acquisition, yet another hope looms large. A hope for availability of relevant RD drugs at an affordable price for Covid infected patients, despite other apprehension, as I wrote before.

That apart, purely from the business management perspective, as well, this rare strategic acrobatic feat of AstraZeneca - ‘Keep nose to the grindstone while lifting eyes to the hills,’ during the Covid crisis, I reckon, is exemplary for the practicing managers.

By: Tapan J. Ray     

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

 

Reaping Rich Harvest With Orphan Drugs

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A set of perplexing questions on the drug industry has been haunting many, since long. One such area is intimately associated with the core purpose of this business, as enunciated by each company, often publicly. Just to give a feel of it, let me quote what one of the largest global pharma players – Pfizer articulated in this regard, on April 5, 2019: “Health for All is at the core of our company’s purpose. We advance breakthroughs that change patients’ lives by ensuring they have access to quality health care services and Pfizer’s medicines and vaccines.”

Publicly expressed core purpose of any pharma business being generally similar, it may be construed as the same of the industry, at large. Hence, some baffling questions – not ethical, but purely commercial in nature, float at the top of mind, such as:

  • How the core purpose of business – “Health for All”, gets served when companies bring to the market mostly exorbitantly high-priced drugs, having access only to a minuscule patient population?
  • How are these companies growing at a faster pace and doing better commercially, by focusing more on orphan drugs approved for the treatment of rare diseases, affecting a very small patient population.

At this point, it will be worthwhile to have a quick recap on ‘orphan drug’ and ‘rare disease’. According to MedicineNet, orphan drugs are those which are developed to specifically treat rare medical condition. This rare medical condition is also referred to as an orphan disease. With that preamble, I shall now focus on this knotty area in search of evidence-based answers to – Is it possible to reap a rich harvest in business with orphan drugs for rare disease? And, if so, how?

Is the focus on high priced orphan a strategic business move?

Regardless of an affirmative or negative answer to the above questions, many people are head scratching with anguish while observing this trend in the drug industry. Mainly because, it is possibly the most important industry for most patients, not only while suffering from an ailment, but also before and after it happens, for various reasons.

The anguish increases manifold, when top manufacturers of popular mass-market drugs, such as, the cholesterol blockbuster Crestor, Abilify for psychiatric conditions, cancer drug Herceptin, and rheumatoid arthritis drug Humira, the best-selling medicine in the world, at a later stage seek and receive orphan drug status for these products reaping a rich harvest. The underlying intent being leveraging ‘additional advantages’ for exorbitant pricing and lesser competition. Hence, it is a strategic business move. I shall discuss this point in greater details, as was raised in a Kaiser Health News (KHN) investigation, in this article.

The same feeling gets resonated in several articles and papers, such as the one titled ‘Big Pharma’s Go-To Defense of Soaring Drug Prices Doesn’t Add Up,’ published in The Atlantic on March 23, 2019. It questioned, ‘How is it that pharmaceutical companies can charge patients $100,000, $200,000, or even $500,000 a year for drugs – many of which are not even curative?’ Nonetheless, the strategy is working well, as we shall find below.

More drugs for rare diseases entering the market at a higher price:

Another article, titled ‘Drug Prices for Rare Diseases Skyrocket While Big Pharma Makes Record Profits,’ published by America’s Health Insurance Plans (AHIP) on September 10, 2019 wrote, drugs for rare diseases are now entering the market at higher prices than ever before, ranging from tens-of-thousands to hundreds-of-thousands of dollars per patient. It further wrote, according to a new report by AHIP, ‘out-of-control drug prices mean too many patients are forced to choose between paying for their prescriptions or paying their mortgage. The prices for drugs to treat rare medical conditions are 25 times more expensive than traditional drugs. That is 26-fold increase in two decades.

The rationale behind so high pricing:

To explore the rationale behind the exorbitant pricing of such drugs, let’s examine what the expert organizations, such as the Tufts Center for the Study of Drug Development (CSSD) said in this regard. Quoting a senior research fellow of CSDD, the article - ‘The High Cost of Rare Disease Drugs,’ published by the Genetic Engineering & Biotechnology News (GEN) on March 04, 2014 reported, although biopharma players generally set higher prices for orphan drugs, there is no causal link between cost of development and pricing. Instead, rare-disease drug prices reflect typical supply and demand situation: ‘Few treatment alternatives allow companies to charge what they can, knowing that payers will often ultimately foot the bill.’

It further explained: “The rarity of the disease means that few people are affected. Generally, the fewer disease sufferers there are, the higher the price of the drug. Companies that invest the same amount of money or more in orphan drugs as they would non-orphan drugs, want to recoup their investment.”

The situation in India for such drugs:

The January 05, 2019 issue of The Pharma Letter captures it all in its headline – ‘India lifts price caps on innovative and orphan drugs; major fillip for Big Pharma.’ It said, with the new legislation announced on January 4, 2019, the Indian government has decided to remove price restrictions on new and innovative drugs developed by foreign pharmaceutical companies for the first five years. In a rider, the government notification also states, the provisions of the Drug Price Control Order (DPCO) 2013 will not apply to drugs for treating orphan diseases (rare diseases).

How will it impact Indian patients?

Consequent to the above government decision, as the report indicated: ‘Orphan drugs to treat rare disease, like Myozyme (alglucosidase alfa) and Fabrazyme (agalsidase beta), both from Genzyme, which are used in the treatment of rare genetic diseases, are among a host of medicines that are to be kept out of price control.’

Quoting officials, the paper pointed out, the most challenging part in the fight against rare diseases is access to affordable treatment. As on date, the prices of these drugs tend to vary, e.g., the cost of treatment with enzyme replacement therapies may reach more than $150,000 per treatment per year. Whereas, in some other areas it may even be as much as $400,000 annually. Moreover, most of these drugs are rarely available in India. As a result, Indian patients suffering from rare diseases have to import these drugs directly. This makes affordability of medicines with an orphan drug regulatory status, a major issue for different stakeholders.

Why patient groups are not generally too vocal about this issue?

An interesting paper of 2008-09 brought to the fore the importance of patient organizations to further patient interest in various areas of health care. With the example of rare diseases and orphan drugs, it aptly expressed: ‘by changing the scale of their organizational efforts, patients’ organizations have managed to integrate themselves into the relays of power through which matters of health are thought about and acted upon. Through their formation into coalitions, patients’ organizations have been able to assume a number of important functions in relation to the government of health.’ The paper further added that the orphan drug problem can be thought of as having changed the scale and organizational form of rare disease patients’ groups.

Regrettably, a recent report of October 09, 2019, raised a big question in this area with a startling headline - ‘Big Pharma’s shelling out big-time to patient organizations. Is there any quid pro quo?’ It said, the Senate Finance Committee of the United States, while looking into the drug pricing decisions, ‘is digging into pharma funding for patient advocacy groups, which have been known to speak in tune that are music to the industry’s ears.’ It added, some Big Pharma constituents together contributed more than $ 680 million to hundreds of patient groups and other nonprofits last year.

It’s worth noting, earlier this year, several patient advocacy groups rallied in objection to a Trump-administration plan that would introduce step therapy requiring patients to try cheaper drugs before moving to more costly ones. ‘A Kaiser Health News analysis found that about half of the groups that objected had received funding from the pharmaceutical industry.’ Be that it may, rallying behind high drug prices by patient groups would help the industry only at the cost of patients’ interest. This is beyond an iota of doubt.

The motivation behind marketing more drugs for rare diseases:

There are several motivating factors to market drugs, which also treat rare disease, attaching startling price tags. The top drivers are generally considered, as follows:

  • The company gets seven years of market exclusive rights with the drug marketing approval for a rare or orphan disease. Interestingly, many drugs that now have an orphan status aren’t entirely new, either. Even if, the product patent runs out, USFDA won’t approve another version to treat that rare disease for seven years. This exclusivity is compensation for developing a drug, designed for a small number of patients whose total sales weren’t expected to be that profitable, otherwise.
  • Market exclusivity rights granted by the ‘Orphan Drug Act’ in the United States, can be a vital part of the protective shield that companies create.
  • Leveraging associated free pricing incentive, the concerned company can attach any price tag of its choice to the orphan drug, sans any competition.
  • Interestingly, more than 80 orphan drugs won USFDA approval for more than one rare disease, and in some cases, multiple rare diseases. For each additional approval, the drug manufacturer is qualified for a fresh batch of incentives. 

The system ‘is being manipulated by many drug makers’:

That this system is being manipulated by many drug makers was also established by the Kaiser Health News (KHN) investigation dated January 17, 2017 titled, ‘Drugmakers Manipulate Orphan Drug Rules To Create Prized Monopolies.’ The analysis brought out that ‘the system intended to help desperate patients, is being manipulated by most drug makers. It reiterated, the key driver is to maximize profits, besides protecting niche markets for even those medicines, which are already being taken by millions. Thus, many orphan drugs, originally developed to treat diseases affecting fewer than 200,000 people, come with astronomical price tags.’

Even some familiar brands were later approved as orphan drugs:

The KHN’s investigation also uncovered that many drugs that now have an orphan status aren’t entirely new. Over 70 were drugs first approved by the USFDA for mass market use. These medicines, some with familiar brand names, were later approved as orphans. ‘In each case, their manufacturers received millions of dollars in government incentives plus seven years of exclusive rights to treat that rare disease, or a monopoly’, the investigation revealed.

The same KHN study also cited the example of AbbVie’s Humira – the best-selling drug in the world. ‘Humira was approved by the USFDA in late 2002 to treat millions of people who suffer from rheumatoid arthritis. Three years later, AbbVie asked the FDA to designate it as an orphan to treat juvenile rheumatoid arthritis, which they told the FDA affects between 30,000 and 50,000 Americans. That pediatric use was approved in 2008, and Humira subsequently was approved for four more rare diseases, including Crohn’s and uveitis, an inflammatory disease affecting the eyes. The ophthalmologic approval would extend the market exclusivity for Humira for that disease until 2023, the report highlighted.

The report also indicated, much touted Gleevec of Novartis, a drug that revolutionized the treatment of chronic myeloid leukemia, has nine orphan approvals. Similarly, Botox, started out as a drug to treat painful muscle spasms of the eye and has three orphan drug approvals. It’s also approved as a drug for mass-market for a variety of ailments, including chronic migraines and wrinkles. Despite humongous pricing, recent reports show that drugs with orphan status are eclipsing many new drugs with outstanding commercial success.

Companies focus on orphan drugs for better financial results:

Many top global companies’ sharp strategic focus on orphan drugs, presumably for the above reasons, is paying a rich dividend. This is evident from a number of recent reports, such as, ‘Orphan Drug Report 2019’ of Evaluate Pharma, released in April. The report says, orphan drugs will make up one-fifth of worldwide prescription sales, amounting to $242bn in spending by 2024 – much of it is going to either big pharma or big biotech players. It also found that the drugs prescribed for the treatment of rare diseases now account for seven of the 10 top-selling drugs of any kind, ranked by annual sales.

Another study of October 2019 by Prime Therapeutics LLC (Prime) shows, with more of ultra-expensive drug treatments coming to market, there is a sharp jump in the number of drug super spenders. While small in number, this group of drug super spenders grew 63 percent, which resulted in $800 million in additional drug costs. In the same period, the number of drug super spenders with drug costs over $750,000 increased 38 percent. This explains, why many companies are focusing on orphan drugs for better financial results.

Conclusion:

As the above quoted report of AHIP articulated, the regulators’ primary intent behind creating lucrative incentives for orphan drugs, was to encourage drug makers to develop treatments for rare diseases by earning a modest profit. ‘Unfortunately, drug makers have responded by building lucrative business models that empower them to achieve a gross profit margin of more than 80 percent – compared to an average gross profit margin of 16 percent for the rest of the pharmaceutical industry,’ the report said.

The AHIP study also finds, from 1998 to 2017, orphan drugs were 25 times more expensive than non-orphan drugs, resulting 26-fold increase in average per-patient annual cost, while the cost of specialty and traditional drugs merely doubled. Today, 88 percent of orphan drugs cost more than $10,000 per year per patient, which will be no different even when Indian patients import the same. The paper also revealed, in 2017, seven out of ten best-selling drugs had orphan indications. And among newly launched drugs, the share of orphan drugs increased more than 4-fold, from 10 percent to 44 percent, over a 20-year period.

Coming back to the core purpose of the pharma and biotech business, as defined by the pharma organizations themselves, one would have expected the situation to be much different. Their stated business purpose – ‘Health for All’, does not seem to recognize: “Every patient deserves to get the medications they need at a cost they can afford,’ as AHIP reiterates. Whereas, “drug makers are gaming well-intentioned legislation to generate outsized profits from drugs intended to treat a small population of patients with rare diseases.” In this scenario, reaping a rich harvest with the orphan drug status seems to have become a new normal.

By: Tapan J. Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

Making ‘National Policy For Rare Diseases’ More Meaningful With ‘Orphan Drugs Act’

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In November 2016, while hearing a related case, the Delhi High Court reportedly directed the Union Government to finalize and implement a policy on rare diseases, with a provision for free treatment with the expensive medications, as will be required by patients.

Earlier in 2014, while passing the judgement in response to a petition filed by a seven-year-old son of a rickshaw puller seeking affordable treatment for the rare disease that he is suffering from, the Delhi High Court concluded that, “every person has a fundamental right to quality health care that is affordable, accessible and compassionate.”

Currently, the treatment for rare diseases costs the patients an arm and a leg, ranging between Rs. 40 lakhs (US$ 62,000 approx.) to Rs 1.70 crores (US$ 267,000 approx.), which is way beyond the reach of most Indians.

Subsequently, on May 26, 2017, the Ministry of Health and Family Welfare filed an affidavit before the honorable Court, submitting a copy of the National Policy for Rare Diseases 2017, stating that it will aim to facilitate effective diagnosis and affordable treatment. This development is indeed good news, especially considering around 6 to 8 percent of the world population suffer from ‘rare diseases’, and India is no exception.

The key highlights of the new policy:

As per available information, following are the 10 major highlights of the National Policy for Rare Diseases 2017:

  • The Union Government to create a corpus with an initial funding of Rs 100 crores (US$ 16 million). The State Governments would also provide for a similar fund with a 60 percent contribution from the Centre. This corpus is primarily for the treatment of genetic disorders, excluding rare blood diseases, such as, thalassemia and sickle-cell anemia.
  • For the sustainability of the corpus, Public Sector Units and Corporates will be encouraged for the contribution in these earmarked funds, as part of their corporate social responsibility.
  • Appropriate institutions will be accredited by the government for diagnosis and treatment of rare diseases.
  • To ensure adequate availability and reasonable affordability of the drugs for rare diseases, the Drug Controller General of India (DCGI) will consider amending the Drug and Cosmetics Act with requisite provisions to make clinical trials and import of ERTs possible.
  • The Department of Financial Services to ensure coverage of rare diseases under insurance schemes.
  • Employees State Insurance Corporation (ESIC) will explore whether the ceiling limit of funding the treatments for rare diseases can be increased through suitable amendments.
  • The policy recognizes that rare diseases are, in most cases, serious, chronic, debilitating and life-threatening, often requiring long – specialized treatments, and may also lead to some form of handicap, at times extremely severe in nature.
  • About 50 percent of new cases of rare diseases are in children and responsible for 35 percent of deaths before the age of one, 10 percent between the ages of one, and five years and 12 percent between five and 15 years.
  • As a preventive measure, the policy may consider the feasibility of providing pre-conception and ante-natal genetic counselling and screening programs for diagnosing genetic disorders, which would provide a choice to parents about giving birth to children with genetic disorders, especially for families that have a diagnosed genetic disorder, or a high risk profile for it.
  • The policy gives Indian Council for Medical Research (ICMR) the responsibility of creating a patient registry, as India has no epidemiological data on rare diseases.

Rare diseases – definition:

There is no universal definition of rare diseases. For example, while the US defines a rare disease as one that affects less than 200,000 people nationwide, in China, this number changes to 1 in 500,000 people (or neonatal morbidity of less than 1 in 10,000). India doesn’t yet have a clear definition for the same – not even in its new policy for rare diseases.

However, according to Rare Diseases India (RDI) – a foundation for research on rare diseases and disorders, any disease having fewer than 100 patients per 100,000 population fall into this category. Whereas, those ones affecting 2 patients per 100,000 population are described as ultra-rare diseases.

Rare Diseases in India:

The Organization for Rare Diseases in India (ORD), states that 1 in 20 Indians is affected by such diseases. About 6000 to 8000 rare diseases, mostly genetic in nature, have been identified in India. It was initially estimated that over 31 million Indians are suffering from such disorders in the country, many of which still do not have any cure. Moreover, epidemiological data for most of these ailments is hardly available.

To increase awareness for rare diseases, Rare Diseases Day was observed for the first time in India (New Delhi) on February 28, 2010.

Orphan diseases and orphan drugs:

According to RDI, rare diseases are often referred to as ‘orphan’ diseases. Consequently, the drugs that are specifically developed to treat ‘orphan’ or ‘rare disease conditions’ are called ‘orphan drugs’. The reason being, pharma companies do not generally take such drugs through further stages of development for market launch, or in other words, these are orphaned for economic considerations, though are important to save many precious lives.

Need to encourage orphan drug development in India:

According to SanOrphan SA, Geneva, Switzerland, around 65 percent of rare diseases is serious and disabling. Interestingly, about 250 new rare diseases are discovered each year, corresponding to five new rare diseases per week. As the scenario is no different in India, it prompts the need to encourage development of effective and affordable orphan drugs in the country.

However, without appropriate ecosystem being in place, developing an orphan drug in India, specifically to treat a very small number of such patient populations, through a cost intensive R&D initiative with a low potential of return on investments, is indeed a challenging proposition for many pharma players. Although, in the western world, this trend has started changing now, driven by various other commercial reasons.

Why should ‘Orphan Drugs Act’ follow the National Policy on rare diseases?

National Policy for Rare Diseases is undoubtedly a good beginning, though was brought under the directive of Delhi High Court. Nevertheless, to encourage ‘Orphan Drugs’ development within the country, a robust ‘Orphan Drugs Act’ should now logically follow.

One may well ask, why is this Act is so necessary in India? This is because, the new ‘National Policy for Rare Diseases’ charts just the pathway of a course of action that the Government is planning to take in this area. Policies, as we know, though, are a set of well-articulated intents, do not guarantee that these will be successfully followed to achieve the pre-set long-term goals. Whereas, all legislative Acts or duly enacted laws, are legally enforceable. It is worth noting, while the national policies can be formulated by the government, an Act must be passed by the lawmakers in the Parliament.

Consequently, it is now a well-accepted fact that ‘Orphan Drugs Act’ encourages development of drugs for rare diseases. In an article titled, “What the Orphan Drug Act has done lately for children with rare diseases: a 10-year analysis”, published by the National Center for Biotechnology Information (NCBI), U.S, National Library of Medicine, the authors highlighted that in the U.S. 1138 orphan drugs were designated and 148 received marketing approval, of which 38 (26 percent) were for pediatric diseases, from 2000 to 2009. The percentage of approvals for pediatric products increased from 17.5 (10 of 57) in the first half of the decade, as compared to 30.8 (28 of 91) in the second half. Based on these data, the paper concluded that the incentives provided in the ‘Orphan Drugs Act (ODA)’ of the United States of America, have led to increased availability of specific drugs for the treatment of ‘Rare Diseases’ in the country.

Other countries did – why not India?

1983 signaled the importance of ‘Orphan Drugs’ with the ‘Orphan Drugs Act (ODA) in the U.S.A. A decade after, in 1993, Japan took similar initiative followed by Australia in 1999. Currently, Singapore, South Korea, Canada and New Zealand are also having their country specific ODAs.

Following similar footsteps, India should also encourage its domestic pharmaceutical industry to get engaged in research to discover drugs for rare diseases by putting an ‘Orphan Drugs Act’ in place, extending financial support, tax exemptions and regulatory concessions like smaller and shorter clinical trials, among several other areas, without delay.

Opportunities galore:

The above constraints in the development of orphan drugs have now been turned into an opportunity galore by the global pharma industry, where the domestic players should not lag much behind. Orphan drugs, backed by adequate financial incentives provided by laws in different countries, are now seen as a research and development priority to significantly boost the top and the bottom-line of pharma business.

As IgeaHub has highlighted, orphan drugs, though, cater to a small patient pool, the remunerative price of these drugs offsets the commercial challenges, as mentioned earlier. For example, in 2010, Soliris, which treats paroxysmal nocturnal hemoglobinuria (PNH) that affects 1 out of 500,000, was considered as the industry’s most expensive drug amounting to US$ 409,000 per year of treatment, which generated a total of US$ 541 million revenue for Alexion Pharmaceuticals in that year. In 2012, Soliris recorded a sales turnover of US$ 1.13 billion, which is expected to cross the mark of US$ 3.40 billion in 2018. Further, in 2012, the top selling orphan drug in the USA – Rituxan of Roche – used for the treatment of chronic lymphocytic leukemia, generated US$ 7.15 billion in total sales. Post patent expiry, in 2018, the same drug is expected to yield a revenue of US$ 6.99 billion.

The market:

Evaluate Pharma’s Orphan Drug Report 2017 estimates the worldwide Orphan Drug Sales of total US$ 209 billion, with CAGR of +11 percent for 2017 to 2022 period, which is double of the overall prescription Market Growth. Excluding generics orphan drugs are set to contribute 21.4 percent of Worldwide Prescription Sales by 2022.

Big pharma dominates this segment. Seven of the top 10 companies’ orphan drug sales are from global industry players, who have won approval for their biggest products in various niche indications.

Other commercial benefits:

Thomson Reuters reported additional commercial opportunities with an appropriate ODA, which in the United States are as follows:

  • 15 percent of the ‘Orphan Drugs’ analyzed by them had subsequent launches for other rare illnesses.
  • 6 out of the top 10 ‘Orphan Drugs’ had more than one rare disease indication, with an average peak sales of US$ 34.3 billion in overall sales potential, against around US$ 8.1 billion of the same for drugs with single indication.
  • Time taken for Clinical Trials (CT) focused on orphan drugs is significantly shorter with much quicker review time than trials involving non-orphan drugs.

Conclusion:

Some of the ‘orphan diseases’ are now being diagnosed also in India, and with precision. As the nation takes rapid strides in the medical science, more of such rare diseases are likely to be diagnosed in our country. The global pharma industry has already started taking rapid strides in this area, supported by ODA in various countries. Similar opportunities, both for the patients, as well as, for the industry, need to be made available in India too.

One of the ways to encourage the orphan drug development in India is to follow the model of the Council of Scientific and Industrial Research (CSIR) for ‘Open Source Drug Discovery’ (OSDD)’ with both global and local partnerships and collaboration.

However, speedy enactment of an appropriate ODA for the country, providing adequate financial incentives to the pharma players, for developing and marketing such drugs, both in the local and global markets, at a reasonably affordable price, would go a long way, and be a win-win situation for all.

Alongside, leveraging the knowledge of OSDD acquired by the CSIR, and framing a robust win-win Public Private Partnership (PPP) model to discover and commercialize the orphan drugs, India could well demonstrate the zeal of the country to move beyond the National Policy for Rare Diseases. In that process, it would be able to offer more meaningful and sustainable benefits, both to the domestic pharma industry and the patients, alike, for a long time to come.

By: Tapan J. Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

“New drug prices are Astronomical, Unsustainable and Immoral” – Anatomy of Unique Protests

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Yes. The quoted sentiment captured in the headline was reportedly voiced recently by many cancer specialists, including researchers and that too in the heartland of pharmaceutical innovation of the world– the United States of America.

These specialist doctors argued:

“High prices of a medicine to keep someone alive is profiteering, akin to jacking up prices of essential goods after a natural disaster”

Thus, not just in India, high prices of new drugs have started prompting large-scale protests in various types and forms across the world. This time the above unique protest assumed an extra-ordinary dimension, with the eye of the storm being in America.

The news item highlighted quite a different type of public protest by the top doctors, originated at a major cancer center located in New York and actively supported by over 120 influential cancer specialists from more than 15 countries spanning across five continents. These crusaders, though reportedly are working in favor of a healthy pharmaceutical industry, do think, especially the cancer drug prices are beyond the reach of many.

About 30 of these doctors hail from the United States and work closely, as mentioned earlier, with pharmaceutical companies engaged in R&D, including clinical trials.

As the cost of many life saving cancer drugs are now exceeding US$ 100,00 per year, all these doctors and researchers involved in the patients’ fights against cancer, are now playing a pivotal role in resisting such high drug prices vigorously.

Examples of astonishingly high drug prices:

In the area of treating rare diseases, the situation in every sense is mind-boggling. When a drug to treat such ailments comes with a price tag of over US$ 400,000 just for a year’s treatment, it is indeed astonishingly high by any standard. Some protestors even described the cost of these drugs as ‘obvious highway robbery’ in the guise of high R&D cost, while some others would continue to wonder as to why is not there a regulatory intervention for the same?

Here below are the top 10 most expensive drugs of the world…and just hold your breath:

World’s Most Expensive Medicines

No. Name Disease

Price US$ /Year
1. ACTH Infantile spasm

13,800,00
2. Elaprase Hunter Syndrome

657,000
3. Soliris Paroxysmal nocturnal hemoglobinuria

409,500
4. Nagalazyme Maroteaux-Lamy Syndrome

375,000
5. Folotyn T-Cell Lymphoma

360,000
6. Cinryze Hereditary Angioedema

350,000
7. Myozyme Pompe

300,000
8. Arcalyst Cold Auto-Inflammatory Syndrome

250,000
9. Ceredase / Cerezyme Gaucher Disease

200,000
10. Fabrazyme Fabry Disease

200,000

(Source: Medical Billing & Coding, February 6, 2012)

The good news is protests against such ‘immoral pricing’ have started mounting.

Protests against high drug prices for rare diseases:

Probably due to this reason, drugs used for the treatment of rare diseases are being reported as ‘hot properties for drug manufacturers’, all over the world.

The above report highlighted a changing and evolving scenario in this area.

In 2013, the Dutch Government had cut the prices of new enzyme-replacement therapies, which costs as high as US$ 909,000. Similarly, Ireland has reduced significantly the cost of a cystic fibrosis drug, and the U.K. rejected a recommendation to expand the use of a drug for blood disorders due to high costs.

Soon, the United States is also expected to join the initiative to reduce high prices of orphan drugs as both the government and private insurers increasingly come under the cost containment pressure.

Yet another protest prompted cancer drug price reduction by half:

Another report highlights that last year physicians at the Memorial Sloan-Kettering Cancer Center in New York refused to use a new colon cancer drug ‘as it was twice as expensive as another drug without being better’.

After this protest, in an unusual move, the manufacturer of this colon cancer drug had cut its price by half.

Even developed countries with low out of pocket expenditure can’t sustain such high prices:

With over one million new cancer cases reportedly coming up every year in India, there is an urgent need for the intervention of the Government in this area, especially for poor and the middleclass population of the country.

Further, it is worth noting that in countries like India, where out of pocket expenditure towards healthcare is very high, as public health system is grossly inadequate, such ‘astronomical prices’ will perhaps mentally knock-down many patients directly, well before they actually die.

That said, even in those countries where out-of-pocket expenditure towards healthcare is nil or very low, respective health systems, by and large, be it public or run by other payors, will still require paying for these high cost drugs, making the systems unsustainable.

Moreover, patients on assistance program of the pharmaceutical companies, reportedly also complain that these ‘Patient Access Programs’ are always not quite user friendly.

Protests spreading beyond cancer and rare disease treatment:

The concern for high drug prices is now spreading across many other serious disease areas, much beyond cancer. It has been reported that the issue of drug prices for various other disease areas was discussed in October 2012 at the Cowen Therapeutic Conference in New York. Many doctors in this conference felt that the drugs with no significant benefit over the existing therapy should not be included in the hospital formulary.

Pressure on diabetic and cardiac drug prices:

Various Governments within the European Union (EU) are now reportedly exerting similar pressures to reduce the costs of drugs used for the treatment of diabetes and cardiac disorders. These measures are now reportedly ‘putting the brakes on an US$ 86 billion sector of the pharmaceutical industry that’s been expanding twice as fast as the market as a whole’.

It is worth noting that each nation within EU is responsible for deciding the price of a new drug, though the European Commission approves drugs for all 27 members of the EU.

Flip side of the story – Commendable initiatives of some global companies:

There is another side of the story too. To address such situation some global companies reportedly are increasing drug donations, reinvesting profits in developing countries and adopting to a more flexible approach to intellectual property related issues. However, as per media reports, there does not seem to be any unanimity within the global companies on country-specific new drug pricing issue, at least not just yet.

To encourage pharmaceutical companies to improve access to affordable drugs for a vast majority of population across the world, an independent initiative known as Access to medicine index ranks 20 largest companies of the world. This ranking is based on the efforts of these companies to improve access to medicine in developing countries.

As indicated by the World Health Organization (WHO), this Index covers 20 companies, 103 countries, and a broad range of drugs, including vaccines, diagnostic tests and other health-related technologies required for preventing, diagnosing and treating disease.

The index covers 33 diseases, including maternal conditions and neonatal infections. The top 10 companies in ‘Access to Medicine Index’ ranking for 2012 are as follows:

No. Company

Index
1. GlaxoSmithKline plc 3.8
2. Johnson & Johnson 3.6
3. Sanofi 3.2
4. Merck & Co. Inc. 3.1
5. Gilead Sciences 3.0
6. Novo Nordisk A/S 3.0
7. Novartis AG 2.9
8. Merck KGaA 2.5
9. Bayer AG 2.4
10. Roche Holding Ltd. 2.3

Source: http;//www.accesstomedicineindex.org/ranking

How high is really the high R&D cost?

A recent article published this month raises some interesting points on this subject, which I am quoting below:

  • No direct and transparent details are available from the industry for public scrutiny on the total cost of innovation.
  • What one does have access to are studies on the issue funded by pharmaceutical MNCs themselves.
  • For most NCEs, public-funded programs in the U.S largely invest in drug discovery.
  • In industry sponsored studies there is lack of transparency on the real costs of drug research and development.
  • Various tax benefits allowed under U.S. law are also ignored by industry studies.
  • Researching new drugs gives one Tax breaks to the extent of 50 per cent in the U.S. If one researches and markets an orphan drug for rare diseases, again, tax breaks are available to the tune of half the expenditure.

Further, a 2011 study by Donald W. Light and Rebecca Warburton published by the London School of Economics and Political Science indicates, “based on independent sources and reasonable arguments, one can conclude that R&D costs companies a median of US$ 43.4 million per new drug.”

It is interesting to note, the above cost estimate is a fraction of what is available from the industry source (over US$ 1.2 billion).

An interesting pricing model prescribed:

Another article recently published in the Harvard Business Review (HBR) commented, while pharmaceutical companies reportedly spend billions on research, the actual cost of manufacturing a treatment (such as a pill) is minimal. This cost structure enables pricing flexibility.

The author suggests:

  • Adopt a smarter pricing model, where a company can charge the highest price that each customer is willing to pay.
  • To implement smarter pricing that saves more lives, and brings in more revenue, the pharmaceutical industry should create a straightforward grid that specifies the annual maximum a patient should pay out of pocket on drug expenses.
  • Key variables that determine this maximum include income, family size, and their other drug costs. Patients can submit this data to a third party agency to avail discounts based on these criteria.

However, implementability of this model, especially in the Indian scenario, seems to be challenging.

Conclusion:

Despite this gloom and doom, as ‘Access to Medicine Index 2012′ indicates, some pharmaceutical companies do want to become an integral part in finding out a solution to the access problem in general. Though, there are still many more miles to cover, some companies, though small in number, are demonstrably trying to improve access to health care in the developing countries of the world.

Rising prices of new drugs in general and for dreaded disease like cancer and other rare disorders in particular have now started reaching a crescendo, not just India, but in many other countries across the world and in various forms. Probably due to this reason, currently in Europe, regulators tend to be depending more and more in the concept of cost to efficacy ratios for new drugs.

It is interesting to note, the world is witnessing for the first time and that too in the developed world that a large number of specialist doctors are protesting against this trend, unitedly and with strong words.

The anatomy of initial phase of this groundswell, many would tend to believe, signals ushering in a new era of checks and balances to set right ‘astronomical, unsustainable and immoral new drug prices’ in the patients’ fights especially against dreaded diseases, the world over.

By: Tapan J. Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

 

 

 

The Concept of Orphan Drugs for Orphan Diseases is Orphan in India

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Though the percentage of patients suffering from ‘Rare Diseases’ in India is reportedly higher than the  world average, unfortunately even today such cases get little help from our government.

According to experts, diseases manifesting patients representing maximum 6 to 8 percent of the world population are defined as ‘Rare Diseases’ and most of such diseases being ‘Orphaned’ by the global pharmaceutical industry, mainly because of commercial considerations, are termed as ‘Orphan Diseases’. Consequently when any drug is developed specifically to treat an ‘Orphan or a Rare Disease’ condition is called an ‘Orphan Drug’.

According to SanOrphan SA, Geneva, Switzerland, around 65 percent of rare diseases are serious and disabling. More interestingly, about 250 new rare diseases are discovered each year, corresponding to five new rare diseases per week.

However, without appropriate ecosystem being in place, developing a new drug (Orphan Drug) specifically to treat a very small number of patient populations suffering from any particular type of rare disease through highly cost intensive R&D initiatives, generating a low return on investments, has been extremely challenging for any pharmaceutical company.

The challenge and the need:

Public awareness drives for ‘Orphan Diseases’ first originated in the USA with the formation of a rare disease support group representing around 200,000 patients suffering from such ailments.

However, very limited market especially for those ‘Orphan Drugs’ , which are meant for the treatment of a single rare disease, has been discouraging the large pharmaceutical players to make major R&D investments for such molecules, as mentioned above.

In response to the public awareness campaigns and at the same time understanding the commercial imperatives of the pharmaceutical companies in developing “Orphan Drugs’, a path breaking legislation was formulated by the U.S government way back in 1983, known as ‘Orphan Drugs Act (ODA)’. The key purpose of ODA was to incentivize R&D initiatives for such drugs to treat around 25 million Americans suffering from ‘Orphan Diseases’.

Though similar legal and policy interventions are of utmost importance to allay the sufferings of millions of patients fighting rare diseases in India, precious little has been initiated in this direction by the government, thus far.

Orphan Drugs in the USA:

U.S Food and Drug Administration (US-FDA) provides orphan status to drugs and biologics which are defined as:

  • Those 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, those affect more than 200,000 persons but are not expected to recover the costs of developing and marketing a treatment drug.

India perspective:

For the first time in India, to increase awareness for the rare diseases, Rare Diseases Day was observed in New Delhi on February 28, 2010. Subsequently 2nd and the 3rd ‘Rare Disease Days’ were observed in Chennai and Mumbai in 2011 and 2012, respectively.

About 6000 to 8000 rare diseases, mostly genetic in nature have been identified in India. It was initially estimated that over 31 million Indians are suffering from rare diseases in the country, many of these diseases still do not have any cure.

However, The Hindu in April 2012 reported, “Taking the lower limit of global prevalence estimate, populous nations like India and China should have more than 70 million rare disease cases each.”

Inaction in India:  

The report further highlights that enough awareness has still not been created in India to address this challenge, despite publication of several rare disease case reports in the peer reviewed journals and existence of a number of support groups, though with inadequate resources.

Use of ‘Social Media’ to increase awareness:

Even in the developed markets, leave aside India, it is still hard to get required health related information for individuals suffering from rare diseases. In many countries, finding no better alternatives, such patients decide to be virtual experts on the diseases they are suffering from, making full use of social media, like Facebook.

Interaction through social media often makes it easier for such patients not only to find each other, but also to share expertise and experience eventually to get proper medical care with affordable drugs.

‘Orphan Drugs Act’ must come with adequate incentives:

ODA, when enacted in India, should not be a half-hearted approach or be a zero-sum game for all. It should come with adequate financial and other incentives to create a sound business sense in this new ball game for the pharmaceutical players in India.

Just for example, the incentives of the ODA in the U.S include:

  • Funding towards investigation for “Orphan Disease’ treatment
  • Tax credit for Clinical Research
  • Waiver of fees for New Drug Application (NDA)
  • Offering more lucrative incentive than product patent (product patent requires the drug to be novel), as the orphan designation of the product by the US FDA and product approval by them are the only requirements for 7 year market exclusivity of an ‘Orphan Drug’ for the specified indication
  • Market exclusivity of ‘Orphan Drugs’ become effective from the date of regulatory approval, unlike product patent, product development time remains outside this period
  • The drugs, which are not eligible for product patent, may be eligible for market exclusivity as an ‘Orphan Drug’ by the US-FDA

Proof of the pudding is in the eating:

Thanks to this Act, currently around 230 ‘Orphan Drugs’ are available in the U.S for the treatment of around 11 million patients suffering from rare diseases. With the help of ‘Human Genome Project’ more orphan diseases are expected to be identified and newer drugs will be required to treat these rare ailments of human population.

‘Orphan Drugs Act’ encourages ‘Orphan Drugs’ development:

It is now a reasonably well accepted fact that ‘Orphan Drugs Act’ encourages ‘Orphan Drugs’ development.

In an article titled, “What the Orphan Drug Act has done lately for children with rare diseases: a 10-year analysis”, published by the National Center for Biotechnology Information (NCBI), U.S, National Library of Medicine, the authors articulated that in the U.S. 1138 orphan drugs were designated and 148 received marketing approval, of which 38 (26%) were for pediatric diseases, from 2000 to 2009. The percentage of approvals for pediatric products increased from 17.5 (10 of 57) in the first half of the decade, as compared to 30.8 (28 of 91) in the second half.

Based on the data the paper concluded that incentives provided in the ‘Orphan Drugs Act (ODA)’ of the United States of America, have led to increased availability of specific drugs for the treatment of ‘Rare Diseases’ in the country.

Others followed… but when will India…?

As stated above, 1983 signaled the importance of ‘Orphan Drugs’ with the ‘Orphan Drugs Act (ODA) in the U.S. A decade after, in 1993, Japan took similar initiative followed by Australia in 1999. Currently, Singapore, South Korea, Canada and New Zealand are also having their country specific ODAs.

Following similar footsteps, India should also encourage its domestic pharmaceutical industry to get engaged in research to discover drugs for rare diseases by putting an ‘Orphan Drugs Act’ in place, extending financial support, tax exemptions and regulatory concessions like smaller and shorter clinical trials, without further delay.

Every day millions of Indians will continue to suffer from ‘Orphan Diseases’ without affordable treatment, in the absence of an appropriate policy framework in the country for ‘Orphan Drugs’.

Another vindication of the argument:

It is worth repeating that an ODA with proper incentives has been the key motivating factor for the development of many drugs and treatment for a large number of rare diseases, since 1983.

Looking at the increasing number of approvals, it appears that CAGR of ‘Orphan Drugs’ will now be far greater than other drugs. Even in 2011 as many as 11 ‘Orphan Drugs’ have been approved by the US-FDA, as stated below:

Company Brand Name Generic Name Type of Approval Indication Month in 2011
Bristol-Myers Squibb YERVOY Ipilimumab New biologic licence application Metastatic Melanoma March
IPR Pharmaceuticals CAPRELSA Vandetanib New molecular entity Advance medullary thyroid cancer April
Bristol-Myers Squibb NULOJIX Belatacept New biologic licence application Prevent organ transplant rejection June
Seattle generics ADCETRIS Brentuximab vedotin New biologic licence application Hodgkin lymphoma and systemic anaplastic large cell lymphoma August
Roche ZELBORAF Vemurafenib New molecular entity Metastatic melanoma August
Shire FIRAZYR Icatibant acetate New molecular entity Hereditary angioedema August
Pfizer XALKORI Crizotinib New molecular entity Late stage lung cancer August
ApoPharma FERRIPROX Deferiprone New molecular entity Thalassemia October
Lundbeck ONFI Clobazam New molecular entity Seizures associated with Lennox-Gastaut syndrome October
Incite JAKAFI Ruxolitinib New molecular entity Myelofibrosis November
EUSA Pharma ERWINAZE Asparaginase Erwinia chrysanthemi New biologic licence application Acute lymphoblastic leukemia November

(Source: Ernst & Young, FDA and company website. 2012)

The above facts, once again, vindicate the argument that the ODA of the kind of the U.S, broadly speaking, is worth emulating by India with appropriate modifications as relevant to the country.

The global Market:

A new report from Thomson Reuters indicate that the global market for ‘Orphan Drugs’ was over US$50 billion in 2011.

It has also been reported that ‘Orphan Drugs’ contribute 6 percent of US$ 880 billion global pharmaceutical market with a CAGR of 25.8 percent as compared to 20.1 percent for ‘Non-Orphan Drugs’ during 2001 to 2010 period.

High price of ‘Orphan Drugs’ is an issue:

The most challenging part in the fight against ‘Orphan Diseases’ is access to an affordable treatment, especially to affordable ‘Orphan Drugs’.

For obvious reasons, the prices of ‘Orphan Drugs’ are usually very high, some even costs as high as US$ 400,000 annually and thus beyond affordability of many who are outside the purview of any drug price reimbursement scheme.

Most of such drugs are rarely available in India and there is no reasonably affordable ‘rupee’ price for these drugs. Indian patients suffering from rare diseases will currently have no other alternative but to import these drugs directly in US$ term, unless Indian policy makers wake-up some day and take appropriate measures in this important area.

Additional commercial opportunities could be available with appropriate ODA:

Thomson Reuters reported additional commercial opportunities with an appropriate ODA, which are as follows:

  • 15 percent of the ‘Orphan Drugs’ analyzed by them had subsequent launches for other rare illnesses.
  • 6 out of the top 10 ‘Orphan Drugs’ had more than one rare disease indication with an average peak sales of US$ 34.3 billion in overall sales potential against around US$ 8.1 billion of the same for drugs with single indication.
  • Time taken for Clinical Trials (CT) focused on orphan drugs is significantly shorter with a quicker review time than trials involving non-orphan drugs.

Conclusion:

It is interesting to note that some of the ‘Orphan Diseases’ are now being diagnosed also in India. As the nation takes rapid strides in the medical science, more of such ‘Orphan Diseases’ are likely to be diagnosed in our country. Thus the moot question is how does India address this pressing issue with pro-active measures, now?

One of the ways to properly address this issue in India could well be to follow the model of our very own the Council of Scientific and Industrial Research (CSIR) for an ‘Open Source Drug Discovery’ (OSDD) program with global partnerships, wherever necessary.

Thus in my view, with an appropriate ODA in place, leveraging the knowledge of OSDD acquired by CSIR and framing a robust win-win Public Private Partnership (PPP) model to discover and commercialize the ‘Orphan Drugs’, India could well demonstrate that the concept of Orphan Drugs for Orphan Diseases is really not Orphan in India.

By: Tapan J Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

India needs ‘Orphan Drugs Act (ODA)’ to counter growing threat of dreaded rare diseases and simultaneously boost global growth potential of the Indian Pharmaceutical Industry

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An orphan disease is a rare and uncommon disease and an ‘Orphan Drug’ is a pharmaceutical substance that has been developed to treat an orphan disease. The US FDA defines a rare disease, with a prevalence of 1 in 5,000 of the general population, whereas in the European Union (EU) defines it as a disease with a prevalence of 5 in 10,000 of the population.

Around 6-8% of the world population is manifested by such rare diseases. There are around 5000 of reported rare diseases with an ascending growth trend.

Despite such trend, high drug development cost coupled with low return on investment, do not encourage many innovator pharmaceutical companies to get engaged in R&D initiatives for such drugs. However, this perception is fast changing, as we shall see below.

US took the first step to encourage commercialization of ‘Orphan Drugs’:

Public awareness drives for ‘Orphan Diseases’ first originated in the USA with the formation of a rare disease support group representing around 200,000 patients suffering from such diseases. This awareness campaign ultimately culminated into a path breaking legislation in the US named, ‘Orphan Drugs Act’ (ODA), in 1983. The key purpose of ODA was to incentivize initiatives towards development of such drugs to treat around 25 million Americans suffering from ‘Orphan diseases’. The incentives included:

- Funding towards investigation for “Orphan Disease’ treatment
- Tax credit for Clinical Research
- Waiver of fees for New Drug Application (NDA)
- Offering more lucrative incentive than product patent (product patent requires the drug to be novel), as the orphan designation of the product by the US FDA and product approval by them are the only requirements for 7 year market exclusivity of an ‘Orphan Drug’ for the same indication.
- Market exclusivity of ‘Orphan Drugs’ become effective from the date of regulatory approval, unlike product patent, product development time remains outside this period.
- The drugs, which are not eligible for product patent, may be eligible for market exclusivity as an ‘Orphan Drug’ by the US-FDA

Thanks to this Act, currently around 230 ‘Orphan Drugs’ are available in the US for the treatment of around 11 million patients suffering from rare diseases. With the help of ‘Human Genome Project’ more orphan diseases are expected to be identified and newer drugs will be required to treat these rare ailments of human population.

1983 signaled the importance of ‘Orphan Drugs’ with the ODA in the US. A decade after in 1993, Japan took similar initiative followed by Australia in 1999. Currently, Singapore, South Korea, Canada and New Zealand are also having their country specific ODAs.

India needs ODA:

Unfortunately in India, we do not have any ODA, as of now. Such legislation could give a new fillip to the Indian Pharmaceutical and Bio-Pharmaceutical industry and at the same time usher in a new hope to thousands of patients suffering from rare diseases in India, with the availability of relatively lower cost medications to them.

The global market:

The global market of ‘Orphan Drugs’ is expected to grow to US $ 112 billion in 2014 from US $85 billion in 2009. Biotech products contribute around 70% of this turnover with relatively higher CAGR growth rate of around 7%. However, reluctance of the insurance companies to cover ‘Orphan Drugs’ due to higher price still remains a global issue.

Orphan drugs to create a paradigm shift in the Pharmaceutical Industry: says Frost & Sullivan:

“While the pharmaceutical industries have been focusing on ‘blockbuster’ small molecules (chemical drugs) for high revenue generation in the past, it is expected that in 5 years, around $90.0 billion worth of branded drugs will lose their exclusivity. The current economic situation plus the huge generic competition shifted the focus of pharmaceutical companies and they are moving to a new business model – ‘Niche busters’, also called Orphan drugs.”

It is believed that Orphan drugs will now offer an attractive opportunity to the pharmaceutical companies than ever before to significantly absorb the impact of the ‘Patent Cliff’. Various financial incentives provided by the governments of various countries under the ODA coupled with many smaller collaborative projects towards this direction will further encourage the global pharmaceutical players to develop ‘Orphan Drugs.

Currently, EU has granted over 700 ‘Orphan Designations’ and over 60 new drugs have received favorable response for Market Authorization.

Sales potential for ‘Orphan Drugs’:

Generally ‘Orphan Drugs’ were not expected to be very high revenue earners. However, about 4 year ago in the year 2006, about 50 ‘Orphan Drugs’ were reported to had crossed a sales turnover of US $200 million. In 2006 the following ‘Orphan Drugs’ with expired market Exclusivity in the US, had assumed blockbuster status:

- Enbrel (Immunex): US $ 4.38 billion
- Rituxan (Genentech): US$ 3.97 billion
- Nupogen/Neulasta (Amgen): US $ 3.92 billion
- Epogen (Amgen): US $ 2.50 billion
- Avonex (Biogen): US $ 1.70 billion
- Betaseron (Novartis & Bayer): US $ 1.33 billion
- Intron A/ PEG-Intron (Schering): US $ 1.07 billion
- Kogenate (Bayer): US $ 1.07 billion
- Ceredase/Cerezyme (Genzyme): US $ 1.00 billion

Key growth drivers for ‘Orphan Drugs’:

In my view the following key factors will play critical role in driving the growth for ‘Orphan Drugs’:

- Market exclusivity options for a number of FDA recognized ‘Orphan Indications’ for the same drug
- Market exclusivity for seven years in the U.S. and ten years in the EU for each of the ‘Orphan Indications’
- Oncology could be a good segment to get such multiple ‘Orphan Indications’ for the same molecule

Glivec of Novartis obtained approval for around five new ‘Orphan Indications’, the key indications being Chronic Myelogenous Leukemia (CML) and Gastrointestinal Stomal Tumors. The product has already assumed a global blockbuster status with an estimated sales turnover of over US $4 billion by 2011.

Biotech companies are champions for the development of ‘Orphan Drugs’, globally:

Since long, the Biotech companies are taking initiatives for the development of ‘Orphan Drugs’. The path breaker in this respect was Genentech of the US, which developed two growth hormone molecules with names Protophin and Nutrophin, way back in 1985. Now, having realized the hidden potential of this segment more number of pharmaceutical players are entering into this arena. Thus, it is no wonder that 13 out of 19 blockbuster ‘Orphan Drugs’ were biologics in the year 2006.

Conclusion:

It is interesting to note that some of the ‘orphan diseases’ are now being diagnosed in India, as well. As India takes rapid strides in the medical science, more of such ‘Orphan Diseases’ are likely to be known in our country. Thus the moot question is how does India address this issue with pro-active measures?
Currently, India is curving out a strong niche for itself in the space of biogenerics. Pfizer-Biocon deal will vindicate this point.

Moreover, with Pharmacogenomics keep gaining ground at a faster pace, as I mentioned earlier, there will be a shift towards personalized medicines, in not too distant future, in which case the blockbuster drugs as defined today, will be effective only for a smaller number of patients. If the Government of India visualizes this scenario sooner, and comes out with appropriate ODA for the country, domestic pharmaceutical industry of India, in general and biopharmaceuticals industry of the country, in particular, will be able emerge as a force to reckon with, in this important global space, much faster than what one would currently anticipate.

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

‘Orphan Drugs’ for ‘Orphan Diseases’ – is ‘Open Source Drug Discovery (OSDD)’ platform for discovery research the way forward?

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To meet the unmet needs of common and dreaded diseases intensive R&D activities are being undertaken by the Pharmaceutical Industry, the world over. At the same time, a percentage of human population, however small, also suffers from some rare diseases, for which there are no approved medical treatments even in the twenty first century, for the rich and poor alike.These rare diseases are also termed as ‘orphan diseases’, which are often chronic, progressive, degenerative, life-threatening or disabling. Many patients suffering from such rare diseases are denied their right to get their ailments effectively treated.It is indeed heartening to note that European Organization for Rare Diseases (EURORDIS) and National Alliances announced February 29, 2008 as the first ‘Rare Disease day’. Thereafter, the last day of February has been designated as ‘Rare Disease Day’ worldwide to call attention to the public health issues associated with rare diseases, which have been reported to affect around 30 million patients around the world.

People with rare diseases remain a medically underserved population even in a developed country. We can then well imagine the plight of such patients in India. The ‘Rare Disease Day’ is intended to bring together the patients and families with rare diseases to discuss the need for greater awareness, more research, and better access to diagnosis and treatment. I am not sure how various authorities, including our Government, are deliberating on this healthcare issue.

People suffering from ‘orphan diseases’ often face huge challenges compared to more common diseases. These include delay in getting an accurate diagnosis, few treatment options and difficulty finding medical experts. Many such rare diseases have no approved treatment. Moreover, treatments for ‘orphan diseases’ tend to be in most cases more expensive than treatments for more common diseases.

This year, the “Rare Disease Day” will be observed in India also, on February 28, though these are not very much talked about in our country, nor is there any proper definition in place for such diseases, as yet.

The drugs meant for treating ‘orphan diseases’ have been very appropriately termed as ‘orphan drugs’, mainly due to commercial reasons, as such drugs will be used on much fewer patients with commensurate return on investments towards R&D. Thus spending expensive R&D resources toward such drugs may not make sound commercial sense.

To address this need, in 1983, the Orphan Drug Act was passed by the Congress in the USA to extend financial incentives for companies to develop treatments for rare diseases. Since then, nearly 330 ‘orphan drugs’ and biologics have been approved by the U.S. FDA, which estimates that from 11 to 14 million Americans would benefit from these ‘orphan drugs’. However, despite such commendable measures taken by the US FDA, around 15 million Americans still leave with such ‘orphan diseases’ for which there is no approved treatment.

It is interesting to note that some of these ‘orphan diseases’ are now being diagnosed in India, as well. As India takes rapid strides in medical science, more of such ‘orphan diseases’ are likely to be known in our country.

Thus the moot question is how does India address this issue with pro-active measures? In the USA, even by giving adequate financial incentives, this problem could not be effectively addressed for commercial reasons.

In my view, one of the ways to properly address this issue is to follow the model of our very own the Council of Scientific and Industrial Research (CSIR) for an ‘Open Source Drug Discovery’ (OSDD) program with global partnerships, wherever required. This initiative has been pioneered by the well known scientist and Director General of CSIR Dr. Samir Brahmachari. Andrew Witty, the CEO of GlaxoSmithKline also had mooted a similar idea in another context in not too distant past.

Therefore, to address the issue of ‘orphan diseases’, in my opinion, the OSDD model with partnerships between private, public and academia will not only prove to be a viable and more practical model to discover ‘orphan drugs’, but will also help India to effectively contribute to this important global issue – not just by observing the ‘Rare Diseases Day’ on February 28 or 29, each year.

By Tapan Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.