At a conference I attended last month in Washington DC, I learned that investors, pharmaceutical companies and researchers see rare disease treatments as a potential “next frontier” in the world of drug and device development. We’re living in a time when the blockbuster meds designed for more common ailments may be becoming less profitable while there may be more of an economic incentive in the near future to develop orphan drugs.
I learned about these new trends at The 2012 US Conference on Rare Diseases and Orphan Products, jointly sponsored by DIA and NORD, the National Organization for Rare Disorders. From October 22 to October 24 the halls of the Capital Hilton were awash with people from all walks of the rare disease community. I was impressed by the sheer number of people in our government and the private sector now dedicated to improving the lives of people living with a rare disease. In attendance there were venture capitalists ready to invest in the next great rare cause, researchers from academia and drug and device companies focused on inventing these medications, scientists working for the government dedicated to the idea of making the process of proving safety and efficacy of drugs much more efficient, patient advocates working with pharmaceutical companies and patient organizations to get better products to the patients who need them, and even patients themselves eager and ready to absorb whatever nuggets of information might improve their lives. It was encouraging to see that patients were not only welcome but are now seen as part of the community that can affect medical advancement.
One panel in particular focused on the appeal of orphan drugs to investors. Presenters included Ritu Baral, Fritz Bittenbender, David Scheer, and the panel was moderated by Thomas Burton of the Wall Street Journal. The panelists shared with us the numerous reasons why orphan drug development is becoming so attractive.
One advantage to investing in the rare disease sector has to do with the motivation level of patients. Rare disease patients, or their surrogates, are a highly motivated bunch. A new medication that can cure or effectively treat a rare disease will be highly sought after by patients. There are often few to no alternative treatments and the patients are often seriously ill and in great need of effective treatment. Rare disease patient groups also tend to be very well connected to each other and share information quickly when new options become available. These conditions are advantageous for sales, and an added motivation to develop drugs for orphan diseases. While we patients see the high cost of a drug as a major problem, ironically, it turns out that the elasticity in pricing for rare disease drugs is actually an extra incentive for rare disease drug development. Drug companies can charge far more for rare disease medications because the patient population is so small. The demand for the medication may be much less than for a drug for more common ailments but the companies have the ability to charge far more to make up the difference.
Another part of the excellent environment for orphan disease drug development is the expansion of coverage in the Affordable Care Act. The Affordable Care Act expands coverage thus giving the companies developing these medications more confidence that patients will be properly reimbursed for these costly medications by third party payers. The Affordable Care Act also should protect patients against exceptions like specialty price tiering which should also help with reimbursement. Thanks to the wonderful work that NORD and other advocacy groups have engaged in, legislation has also made orphan drug development more favorable because of regulatory flexibility. There is also an increase in rare disease staff at FDA, and tax incentives and credits in the orphan drug sphere. I’m also hoping more scientists will focus on rare disease research because of the commercial interest it is attracting.
I don’t mean to paint too rosy a picture as we go into a period when overall drug development could potentially be challenging. That said, rare disease research really does look like a bright spot. Facts and figures tell the story. While major disease groups like diabetes, heart conditions, and cancer may see reductions in investments in drug development, Fritz Bittenbender in his presentation pointed out that rare diseases should see a 46% increase in investments over the next 3 years.
I think our role as patient advocates is to keep telling our stories and letting our voices be heard so that investors, biotech companies, pharmaceutical companies and researchers are more likely to find us and develop the treatments we are seeking for our disease groups. We’ll also have to work hard as patient advocates insuring that when these new and better treatments are developed, they will be available to all who need them.
To look at some images from the 2012 US Conference on Rare Diseases and Orphan Products, click on this link from NORD:
http://www.rarediseases.org/news-events/news/2012-dia-images
