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In the largest market for orphan drugs, USA, there was a shortage of adequate therapies for
treating many rare diseases. These therapies were not developed as companies did not expect
these drugs to be highly profitable. Hence there was a lack of interest and thus investment on
the part of pharma companies in the USA. Therefore, the FDA introduced incentives for
developing such drugs. This step taken by the FDA was successful in creating a thriving market
for orphan drugs.
It was in the USA first that a special law exclusively for governing orphan drugs was framed in
the form of the Orphan Drug Act of 1983. This led to an increase in the popularity of orphan
drugs. The FDA also has been continuously increasing its efforts to support this market by
providing significant financial and non-financial incentives to the pharmaceutical companies
to attract them. This has been one of the major drivers of growth for the US orphan drugs
market.
The orphan drugs enjoy significant competitive advantages in the market owing to the market
exclusivity period after the drug has been authorized. Through this clause, the manufacturer
of orphan drugs is given a monopoly status in the market because according to the law, no
other company is allowed to market the orphan drugs during the exclusivity period.
Additionally, this monopolistic power is further strengthened with the fact that no other
alternative health technology exists for many orphan drugs.
A scenario where orphan drugs would be denied coverage is highly difficult to visualize.
However it is most likely that the payer scrutiny would increase with new products entering
the market and budgets contracting in a weakening economic environment. The plans would
be based on costs and would also include payer resources, philosophies, and available benefit
design options, as all these factors could affect patient access. A deep and clear
understanding of the clinical and economic value of the drugs will play an increasingly
important role in decision-making.
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Competitive Landscape
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List of Figures
Figure 2-1: Orphan v/s Non-Orphan Drugs -Phase II to Launch Clinical Development Time
Figure 2-2: Probability of Regulatory Success of Orphan v/s Non-Orphan Drugs
Figure 3-1: US Orphan Drug Market (US$ Billion), 2012-2018
Figure 3-2: US Share in Global Orphan Drug Market, 2012 & 2018
Figure 3-3: Biological & Non Biological Orphan Drug Segment (%), 2012 & 2018
Figure 3-4: Biological & Non Biological Orphan Drug Market (US$ Billion), 2012-2018
Figure 5-1: US- Orphan Drug Development by Clinical Phase (%), 2014
Figure 5-2: US - Number of Orphan Drug by Clinical Phase, 2014
Figure 5-3: US Number of Suspended & Discontinued Number of Orphan Drug, 2014
Figure 5-4: US - Number of Discontinued Orphan Drug by Clinical Phase, 2014
Figure 5-5: US - Number of Suspended Orphan Drug by Clinical Phase, 2014
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List of Tables
Table 2-1: Drugs Patent Expiry in 2014
Table 2-2: Drugs Patent Expiry in 2015
Table 2-3: Drugs Patent Expiry in 2016
Table 2-4: Orphan Drugs in the US and their Costs
Table 2-5: Orphan Drugs in the EU and their Costs
Table 2-6: Incentives for the Development of Orphan Drugs
Table 2-7: Orphan Drug Incentives by Country
Table 5-1: US - Orphan Drugs in Research Phase
Table 5-2: US - Orphan Drugs in Preclinical Phase
Table 5-3: US - Orphan Drugs in Clinical Phase I
Table 5-4: US - Orphan Drugs in Clinical Phase I/II
Table 5-5: US - Orphan Drugs in Clinical Phase II
Table 5-6: US - Orphan Drugs in Clinical Phase II/III
Table 5-7: US - Orphan Drugs in Clinical Phase III
Table 5-8: US - Orphan Drugs in Preregistration Phase
Table 5-9: US Registered Orphan Drugs
Table 6-1: US Marketed Orphan Drugs by Indication & Brand Name
Table 7-1: Orphan Drug Clinical Study Hurdles
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