Clinical Costs for Orphan Drugs Lower Than Non-Orphan Drugs, Study Finds

As almost 60% of new drug approvals in 2018 were for orphan drugs, a new review published in the Orpanet Journal of Rare Diseases finds that for new molecular entities, clinical costs for orphan drugs are half as much as such costs for non-orphan drugs.

“When focusing on NMEs [new molecular entities] alone, we found that the capitalized clinical cost per approved orphan drug was half that of a non-orphan drug,” the researchers from University of Toronto and University of Calgary found. “We found that the out-of-pocket clinical costs per approved orphan drug to be $166 million and $291 million (2013 USD) per non-orphan drug. The capitalized clinical costs per approved orphan drug and non-orphan drug were estimated to be $291 million and $412 million respectively.”

The findings come as orphan drug prices have remained high, with the likes of Alexion's Soliris (eculizumab), which can cost up to $500,000 per patient annually, and Vertex's Kalydeco (ivacaftor), which is used to treat a subpopulation of cystic fibrosis patients and costs more than $300,000 per year per patient. The global orphan drug market is estimated to reach $209 billion by 2022, accounting for 21% of total branded prescription drug sales, the study finds.

“These prices may reflect the need to recoup the cost of drug development from a small patient pool. However, estimates of the cost of orphan drug development are sparse,” the researchers wrote. They also concede the fact that even orphan drugs with a relatively low cost of development may still require very high prices to recoup their cost if the patient population is small enough. 

In the conclusion, the authors pointed to the need for more discussion on which cost components should be included in pharmaceutical research and development costs.

“Although these estimates themselves are highly dependent on the data parameters used in this analysis, our finding that orphan drug development is less than that of non-orphan drugs remain even with varied data parameters,” the researchers said. “Further research is required to better quantify the overall costs of drug development and obtain consensus on what cost categories should be included in such an analysis. Moreover, when considering value of drugs, more discussion is required before assessing whether recouping R&D costs should be a consideration when setting prices for drugs.”

Research