The Orphan Drug Bubble
This article was originally published in RPM Report
Two former biotech high flyers are up for sale, with Amylin attracting more would-be suitors than Human Genome Sciences. The spectacle of the bidding is great. But did you know that the orphan drug company Alexion is worth more than those two companies combined?
You may also be interested in...
The economics of orphan drugs have been pretty straightforward: Transformative treatments for rare diseases deserve premium prices. And so far, payors – at least the larger ones – haven’t really balked at those price tags. But stakeholders are starting to ask whether the orphan drug pricing benchmark set by Ceredase 20 years ago is right for all rare disease drugs. Industry needs to have good answers.
BioMarin’s investor day highlighted a company in transformation: on the brink of profitability based on a stable of rare disease therapies, and generating buzz for an early stage research compound in oncology. Balancing those two portfolios may be challenging – and framing appeals to investors may be counterproductive in protecting the orphan drug model.
FDA has updated its Orphan Drug regulations, finalizing new language attempting to clarify what subpopulations qualify for the incentive. But it is much easier to say what doesn't cut it than what does.