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Orphan drugs cost 13.8 times more per patient

Thursday, November 5, 2015

With 2020 worldwide sales forecast at $178 billion, the orphan drug market is expected to grow by 11.7% per year (CAGR 2015 to 2020), nearly doubling the yearly growth of the overall prescription drug market. Moreover, worldwide orphan drug sales will account for 20.2% of worldwide prescription sales by 2020 (excluding generics) according to the “EvaluatePharma Orphan Drug Report 2015” from life science market intelligence firm Evaluate.

“For three years, Evaluate has tracked the trajectory of this specialty market, which has achieved almost 12% annual growth,” said Andreas Hadjivasiliou, report author and EvaluatePharma analyst. “Up until now, orphan drug developers have managed to defend the cost of these life-changing drugs but with the increasing scrutiny over drug costs and the growing number of designations awarded, orphan drug developers will have to continue to innovate and demonstrate how their products can help reduce the overall healthcare budget.”

According to the report, the median cost per patient is 13.8 times higher for orphan drugs compared to non-orphan; Advate delivers highest revenue per patient orphan drug in U.S. Worldwide orphan drug sales are forecast to total $178 billion (CAGR 2015 to 2020: +11.7%); nearly double the overall prescription market growth.

Phase III orphan drug development costs are half that of non-orphan, but phase III drug development is no quicker for orphan than non-orphan drugs. Return on investment of phase III/filed orphan drugs is 1.14 times greater than the ROI for non-orphan drugs, according to the report. Also, 2014 was a record year for Orphan Drug designations, with the FDA awarding 291, Europe awarding 201 and Japan awarding 32 designations.

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