October 31, 2014—Orphan drugs will account for almost 20 percent of total worldwide drug sales (excluding generics) by the end of the decade, with year-to-year sales growth more than double that of the overall prescription drug market, the market intelligence firm EvaluatePharma says in a new report.[ms-protect-content id=”2799″]
In the U.S., the average per-patient annual cost for orphan drugs this year was $137,782, more than six times the cost for non-orphan products, according to the report. A record 260 drugs were granted orphan designations in the U.S. in 2014, bringing the total to 3,224. Of those, 472 have been approved for marketing.
“Looking ahead, there does not appear to be much to slow down the sector’s rush into orphan indications,” the report’s authors say. Orphan drugs “cost their developers less to put through clinical trials, and command higher prices when they do launch,” they explain.” Tax incentives reduce development costs further. And when orphan drugs do reach the market, on average, their cost per patient is six times that of non-orphan drugs, a clear indication of their pricing power.”
Brand-name drug manufacturers are battling with federal officials over whether the companies must offer 340B pricing on orphan products to rural and freestanding cancer hospitals when the drug is used for a common condition. The Health Resources and Services Administration has informed about 50 orphan drug manufacturers that they are out of compliance with 340B statutory requirements and their pricing agreements with the government and must notify it by Nov. 7 of their plans to repay affected hospitals for 340B overcharges.[/ms-protect-content]