PSY112 - Economic Impact of The End of The Market Exclusivity for Orphan Drugs

Abstract

In order to stimulate the research and development of orphan drugs, in 2000 the EU introduced new legislation with the aim of providing incentives for the development of drugs for rare disorders. One of the strongest incentives, regarding experience in the United States of America and Japan, is a market exclusivity period post authorization for designated products. The objective of this study is to assess if the 10 year market exclusivity has created a market failure by assessing the prices and the competition environment of drugs for which this period has come to an end. From the 2014 Orphanet’s list, we retrieved the 20 drugs that have lost their market exclusivity for at least one indication (26 indications). It is worth to note that some of them still have market exclusivity for another indication, which means they may still be on the orphan drug register. We focused on the French market and used French administrated prices. 63% (12 drugs) of the sample have not suffered a drop in prices after the market exclusivity loss. Among all the studied variables, the most important event to trigger a price drop seems to be an extension of indication. 40% (10 drugs) of the sample were able to see the arrival of competitors during their period of market exclusivity even if they target a small population. These results show that the market exclusivity does not necessarily create an inflationary effect and a monopoly for orphan drugs. Market exclusivity would act as a protectionist measure. Its major interest is in the beginning of the product’s life and for old drugs for which the molecule is not under the patent at the time of the approval.