From blockbuster to nichebuster
By Lucien Hordijk, Daan Marselis, | 29 July, 2020
Two decades of EU market protection of ‘orphan’ (rare disease) medicines have greatly benefitted the industry. According to research by The Investigative Desk, published in the British Medical Journal (BMJ) and the Dutch Journal of Medicine (NTvG), many of these ‘orphan medicines’ make billions of euros.
Twenty years ago, the European Commission introduced a legislation to make the development of ‘orphan medicines’ – for the treatment of rare diseases – more attractive. Pharmaceutical companies would be awarded ‘market exclusivity’, not to be confused with patent protection, giving them a de facto 10 years monopoly on sales. The Investigative Desk analysed global sales data of 120 (of a total of 174) orphan medicines registered in the EU in the past 20 years. We found that pharma companies have reaped billions of euros on orphan sales.
This summer, the European Commission is expected to publish an – as yet confidential – review which suggests that without market exclusivity most of these medicines would have been launched anyway. These findings may raise voices for reform in the European Parliament.
The EU orphan legislation has stimulated the pharmaceutical industry to transform its ‘blockbuster’ model – which was based on medicines for widespread diseases – into a ‘nichebuster’ model in which medicines treating only small patient groups can still generate more than a billion euros annually. In 2019 alone, there were 20 such ‘nichebusters’ with an orphan designation in the European Union – up from 3 in 2009.
Since 2000, the average worldwide sales income of these orphan medicines has five folded to – on average – 723 million euros per medicine per year. Medicines for rare cancers are particularly lucrative, with an average turnover of 1.1 billion euros – twice the turnover of medicines for other rare diseases.
Experts say the excessive protection of orphan medicines is the result of flawed legislation. The European Commission cannot withdraw (or shorten) a market exclusivity once it has been granted – even if companies charge a disproportionately high price.
The complete findings of this research were published in the BMJ.
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