Can Orphan Drugs Soften the Blow of the Patent Cliff?

So which companies are looking for the securities of rare disease drugs in the face of the patent cliff?

With an estimated $67 billion worth of biosimilar patents due to expire before 2020, as reported by GaBI in a guest blog for TotalBiopharma, increasing research and development costs, and slowing rates of approval for mass market drugs currently under development, how are some of the world’s leading pharmaceutical companies planning to avoid falling off the patent cliff?

Well, a recent number of acquisitions and investments suggests that leading pharma companies are putting more stock than ever in orphan drugs to soften the blows from expiring patents on blockbuster drugs.

So which companies are looking for the securities of rare disease drugs in the face of the patent cliff?

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These investments are perhaps not surprising given the long list of benefits associated with the development, production and marketing of orphan drugs. Benefits such as government grants, tax credits, no FDA fees, fast tracked clinical development and an increased probability of regulatory approval, premium pricing, faster market uptake, lower marketing costs, and longer (7 year) patent protection. All of these factors add to the allure of orphan drugs.

Added together, orphan drugs offer less risk to companies, whilst still providing large revenues from premium pricing. Whilst it is up for debate whether the premium prices of many orphan drugs can be justified by supposedly higher R&D costs, the stability and lack rock of orphan drugs is clearly enough to bring in the big players.

Though if this trend continues, is there a chance the orphan market will see a swell in its patent pool, leading to increased competition, reduced drug prices, and a less inviting market?

What do you think this investment trend will mean for the orphan drug market? Join the conversation on LinkedIn.

Interested in Orphan Drugs? Why not check out the World Orphan Drug Conference USA 2014 and meet experts and leading industry figures from across the USA.

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