Orphan drugs become the new favorite of pharmaceutical industry upon the huge market potential

FDA approved the marketing application of Merck Serono’s Avelumab through accelerated approval on March 23, 2017, which is used to treat the rare disease metastatic Merkel cell carcinoma and fills in gaps in the therapeutic field of the disease, and has also received the orphan drug status. This news can be said to ignite the medical circle and again draws the public interest in words like "orphan drug" and "rare disease".

Countries in the world have no unified standard for identifying rare diseases. Currently, there are about 6,000-7,000 rare diseases confirmed internationally, accounting for about 10% of human diseases. Most rare diseases belong to congenital and chronic diseases. Many rare diseases are endowed with beautiful and mysterious names in China, for example, "moon-children"—albinism, and "butterfly children"—epidermolysis bullosa, etc. However, what behind those names is the current situation that the rare diseases are in urgent need for the attention of different social sectors.

The high R&D cost and government’s no interference with or restriction of drug prices in general to encourage enterprises’ initiative in R&D and production of orphan drugs result in most orphan drugs to be extraordinarily expensive, for example, the annual treatment expenses of Elelyso used to treat Gaucher’s disease are about USD 200 thousand; the annual treatment expenses of Soliris used to treat atypical hemolytic uremic syndrome can reach USD 440 thousand. Those bring heavy burdens to rare disease patients.

However, in the recent decade, the rare disease drug R&D field has become warm, and the orphan drug market has been rapidly growing, becoming one of the hot fields in foreign pharmaceutical industries, with the increase of the public’s awareness of rare diseases, some special policy encouragements in foreign countries, and innovations in medical diagnostic techniques. In the past decade, the annual application quantity for orphan drugs in the U.S. was about 126 cases, while that in 1990s was only 63 cases; among the 20 new drugs approved by FDA in 2016, there were 7 new drugs with orphan drug designation, involving rare diseases including inhalation anthrax, hepatic veno-occlusive disease after bone marrow or stem cell transplantation accompanied by renal or pulmonary dysfunction, chronic lymphocytic leukemia, primary biliary cholangitis, Duchenne Muscular Dystrophy, soft tissue sarcoma, and rare neuroendocrine tumor. Global sales of orphan drugs are expected to reach USD 176 billion by 2020, therefore, there is huge business potential in the orphan drug market. Some pharmaceutical companies focused on orphan drug development like Novazyme, United Therapeutics and BioMarin possess very high market values and also obtain business success.

As a populous country, China has over 16 million rare disease patients, according to incomplete statistics; patient population with rare diseases is several hundred in other countries, but the population becomes a large number in China. However, compared with the orphan drug R&D heat in foreign countries, in China, the present orphan drug R&D progress is slow, the independent R&D capacity is insufficient, and for a long time, there have not been many pharmaceutical enterprises conducting new orphan drug development, or even research of generic drugs of orphan drugs; the access to the orphan drugs has long been greatly depending on import, the orphan drugs available in the market are far from meeting the present rare disease drug treatment demands, and as orphan drugs are very expensive, patients face the bitter situation of failure to purchase or afford orphan drugs, which delays the disease treatment. The main reason for the awkward situation of orphan drugs in China is that there is no official definition of rare diseases in China, and there is a lack of relevant policy support and encouragement, which reduces the enterprises’ initiative in R&D and production of orphan drugs; and currently China offers a very low proportion of compensatory payment of orphan drugs, most orphan drugs are not covered by the medical insurance, and the high treatment expenses are unaffordable to patients and most families.

Policies and regulations in this field have been frequently introduced in recent years, and CFDA has also introduced some regulation documents frequently, to encourage enterprises to conduct orphan drug R&D, and encourage orphan drug R&D and applications through policies exempting clinical trial and offering special review, etc. For example,

CFDA’s notice on soliciting public opinions on Measures for the Administration of Drug Registration (Revised Draft) issued on July 25, 2016 defines again the provision that for rare diseases and special diseases, etc., the clinical trial applications can propose reduction of clinical trial medical case number or exemption of clinical trials; both the Announcement on Policies Pertaining to the Review & Approval of Drug Registration issued by CFDA on November 11, 2015, and Opinions on the Implementation of Priority Review and Approval to Resolve Backlogged Drug Registration Applications issued on February 26, 2016 contain provisions on the priority approval policy for orphan drugs. In the 2016 Drug Review Annual Report issued by CDE, 8 among the 193 registration applications included in priority review in 2016 were registration applications for rare disease drug. The Decision on Adjusting Issues concerning the Administration of Imported Drug Registration (Draft for Comment) issued by CFDA recently mentions that overseas drugs can be conducted international multi-center drug clinical trials in China and directly filed the applications for pharmaceutical product marketing registration upon completion of the international multi-center drug clinical trials, which can effectively solve the contradiction that the rare disease samples during clinical trials of orphan drugs fail to meet the clinical trial requirements.

We can see that China has started to gradually formulate relevant policies and regulations in the orphan drug field by combining with own conditions in recent years, which provides with Chinese enterprises a rare opportunity.