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We’ve just published our latest report on the state of the orphan drug landscape and I’ve been working on the data that the report discusses. As you might imagine, the landscape is not fundamentally different from when we last ran in this report – orphan drugs are a firmly established sector within the industry with keen interest from big pharma. However, it was striking to realise the extent to which orphan drugs have become mainstream. Particularly for a segment of the market that, almost by definition, started out as niche.
It’s certainly not niche anymore. Orphan drug sales growth now significantly outstrips that of the wider pharmaceutical market. In fact in 2021, over half of the FDA’s approvals were for orphan drugs, and Evaluate Pharma’s latest data suggested that by 2026, orphans will make up a fifth of all prescription drug sales. This is clearly a space which has proven and continues to provide lucrative opportunities.
For the companies developing those drugs, and those acquiring or investing in them, this is clearly a booming sector of the market. Big pharma has been well aware of this for some time, and in fact nine of the top ten orphan drugs in 2026 will be under the auspices of big pharma, either directly or through licensing deals. The Evaluate Vantage team recently discussed the corners of the biopharma landscape that are booming and rare diseases (for which orphan drugs are primarily destined) is up there with the hot areas of oncology and central nervous system disorders.
However, it’s worth noting that while there may not be huge clouds on the horizon, there are some questions to be asked; if orphan drugs sales are so large, do they really deserve the favourable terms under which they are developed? Why are some corners of rare diseases becoming rather crowded when 7,000 rare diseases remain under-served? There are rumblings that the EU and FDA are likely to start addressing the 40 year old legislation that is starting to look a little…creaky…in the current, multi-billion dollar context.
Another interesting consideration is that of genetic medicine, an area which was hugely hyped up a few years ago as potentially the answer to many rare diseases, but which has fizzled somewhat. The way in which that segment of the industry reinvents itself may also have an impact on the evolution of the way the industry address orphan indications. (You can take a look at our new report on genetic medicine here, by the way).
In balance, we must remember that the purpose of the drug act and these drugs is to meet unmet patient need in an area that was chronically underserved. Investment in this space does make a difference to patients although barriers to access have shifted somewhat from drug approval towards drug reimbursement and access especially in the US.
We address the above and much more in the report, along with the issues of price, new mechanisms of action, and the key orphan drugs that will continuing the fuel the market into 2026. The questions above – and many more – remain. But what is clear is that with our data suggesting that the net present value of forecast 2026 sales of the top ten pipeline orphans is over $42 billion, orphan drugs are here to stay and there is no letup in interest and activity in this space.