Since 1983, pharmaceutical developers have been incentivized by the FDA via an Orphan Drug Designation (ODD) program to develop products to treat rare diseases and/or conditions. The program awards orphan status to drugs that show likelihood of benefitting an afflicted population that might not otherwise be the focus of targeted development efforts. To meet the FDA’s specific requirements, sponsors have found specificity matters. Though other steps in a drug’s life cycle require a wider scope, when it comes to defining the orphan population and making a case for the drug’s potential efficacy in that population, a razor-focused effort is key.
Payer receptivity to high orphan drug (OD) prices and, hence, revenue, will almost certainly begin to wane as budgets are increasingly strained by new therapies and as payers increasingly scrutinize the value of ODs. Indeed, there are signals that payers are becoming increasingly sensitive to the cost of newly approved ODs, even those that confer a clear clinical benefit to patients.
Prior to the passage of the Orphan Drug Act of 1983 (ODA), a meager 38 orphan drugs (ODs) were approved, corresponding to — at best — an approved drug for less than 1 percent of an estimated 7,000 orphan diseases.