Orphan diseases' appeal lies in return on investment, says Evaluate

For many years, Big Pharma’s model of success has been the blockbuster: drugs that sell more than $1 billion. However, because the cost of R&D has become increasingly prohibitive, particularly in such disease areas as cardiovascular and diabetes, a focus on niche orphan indications has become more attractive as products to treat them provide better return on investment.

The worldwide orphan drug market is set to reach $127 billion by 2018, accounting for nearly 16% of total prescription drug sales, according to the new 2013 Orphan Drug Report from Evaluate. The first-edition report sheds light on the market dynamics of orphan drugs — pharmaceutical products aimed at rare diseases or disorders - projecting that sales will experience a compound annual growth rate of 7.4% between 2012 and 2018, nearly double that of the prescription drug market, excluding generics.

Evaluate’s first ever detailed analysis of the orphan disease sector reveals how much more profitable orphan compounds are. The expected return on rare disease drugs is 10 times the cost of Phase III clinical trials, compared with just six times the cost for candidates being tested in non-orphan indications. And, given that the 24 best-selling rare-disease drugs are forecast to be blockbusters in 2018, Pharma’s shift toward orphan diseases is understandable.