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Orphan drug exclusivity resulting in on-market drug prices rising more slowly than common drugs

Adding an orphan indication to an on-market drug didn't correlate with a higher-than-average price increase.

Jeff Lagasse, Associate Editor

The seven-year market exclusivity granted to drugs designated under the Orphan Drug Act of 1983 for rare diseases is working as intended, finds a new report by the nonprofit National Organization for Rare Disorders.

In most cases, orphan exclusivity did not inappropriately prevent generics and biosimilars from entering the market. Instead, the lack of generic competitors can largely be credited to their prospective return on investment being too small.


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Adding an orphan indication to an on-market drug does not correlate with a higher-than-average price increase, the findings show. The average price of therapies grew at a slower pace in eight out of the 10 years following the addition of an orphan indication to the label.

Of the 503 approved therapies with an orphan indication at the time the research was conducted, 217 are no longer covered by orphan exclusivity or patent protection. Of these 217 therapies, 116 of them have generic or biosimilar competition.

The median spending on the 101 orphan drugs without protection from competition and without competitors is about $8.6 million per year per drug, the study found. Meanwhile, around one-quarter of orphan drug approvals target populations smaller than 5,000 patients

Since 2009, on-market common-disease drug prices have grown more every year, on average, than orphan drugs.


Drug prices have been a consistently hot issue in the healthcare industry as well as in Congress. In September, the U.S. House of Representatives unanimously passed two bills that would prevent pharmacy benefit managers from putting gag clauses into contracts with pharmacies.

The gag clauses restrict the pharmacist from telling customers they could pay less for a prescription if they paid the full price of the drug out-of-pocket rather than using their insurance and paying the copay amount.

Twitter: @JELagasse

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