Estimating the clinical cost of drug development for orphan versus non-orphan drugs

Kavisha Jayasundara,Aidan Hollis,Murray Krahn,Muhammad Mamdani,Paul Grootendorst,Jeffrey S Hoch

doi:10.1186/s13023-018-0990-4

Abstract

BackgroundHigh orphan drug prices have gained the attention of payers and policy makers. These prices may reflect the need to recoup the cost of drug development from a small patient pool. However, estimates of the cost of orphan drug development are sparse.MethodsUsing publicly available data, we estimated the differences in trial characteristics and clinical development costs with 100 orphan and 100 non-orphan drugs.ResultsWe found that the out-of-pocket clinical costs per approved orphan drug to be $166 million and $291 million (2013 USD) per non-orphan drug. The capitalized clinical costs per approved orphan drug and non-orphan drug were estimated to be $291 million and $412 million respectively. When focusing on new molecular entities only, we found that the capitalized clinical cost per approved orphan drug was half that of a non-orphan drug.ConclusionsMore discussion is needed to better align on which cost components should be included in research and development costs for pharmaceuticals.

Highlights

High orphan drug prices have gained the attention of payers and policy makers
We aim to identify the differences in clinical trial characteristics between orphan and non-orphan drugs using publicly available data and use that information to estimate the clinical research and development (R&D) costs for both orphan and non-orphan groups
We utilized publicly available clinical trial data to determine any differences in trial characteristics between non-orphan and orphan drugs; these data were used to calculate the out-of-pocket and capitalized clinical cost of drug development for orphan and non-orphan drugs

Summary

Introduction

High orphan drug prices have gained the attention of payers and policy makers. These prices may reflect the need to recoup the cost of drug development from a small patient pool. Estimates of the cost of orphan drug development are sparse. Pharmaceutical companies have increasingly focused on developing drugs for rare diseases [1]. This is partly due to technical advances that facilitate the identification of the genetic causes of rare diseases [2]. Country level initiatives and incentives for the development of drugs that treat rare diseases, i.e. orphan drugs, have stimulated research efforts in this area. The global orphan drug market is estimated to reach US $209 billion by 2022 accounting for 21.4% of total branded prescription drug sales [4]

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