The Concept of Orphan Drugs for Orphan Diseases is Orphan in India

Though the percentage of patients suffering from ‘Rare Diseases’ in India is reportedly higher than the  world average, unfortunately even today such cases get little help from our government.

According to experts, diseases manifesting patients representing maximum 6 to 8 percent of the world population are defined as ‘Rare Diseases’ and most of such diseases being ‘Orphaned’ by the global pharmaceutical industry, mainly because of commercial considerations, are termed as ‘Orphan Diseases’. Consequently when any drug is developed specifically to treat an ‘Orphan or a Rare Disease’ condition is called an ‘Orphan Drug’.

According to SanOrphan SA, Geneva, Switzerland, around 65 percent of rare diseases are serious and disabling. More interestingly, about 250 new rare diseases are discovered each year, corresponding to five new rare diseases per week.

However, without appropriate ecosystem being in place, developing a new drug (Orphan Drug) specifically to treat a very small number of patient populations suffering from any particular type of rare disease through highly cost intensive R&D initiatives, generating a low return on investments, has been extremely challenging for any pharmaceutical company.

The challenge and the need:

Public awareness drives for ‘Orphan Diseases’ first originated in the USA with the formation of a rare disease support group representing around 200,000 patients suffering from such ailments.

However, very limited market especially for those ‘Orphan Drugs’ , which are meant for the treatment of a single rare disease, has been discouraging the large pharmaceutical players to make major R&D investments for such molecules, as mentioned above.

In response to the public awareness campaigns and at the same time understanding the commercial imperatives of the pharmaceutical companies in developing “Orphan Drugs’, a path breaking legislation was formulated by the U.S government way back in 1983, known as ‘Orphan Drugs Act (ODA)’. The key purpose of ODA was to incentivize R&D initiatives for such drugs to treat around 25 million Americans suffering from ‘Orphan Diseases’.

Though similar legal and policy interventions are of utmost importance to allay the sufferings of millions of patients fighting rare diseases in India, precious little has been initiated in this direction by the government, thus far.

Orphan Drugs in the USA:

U.S Food and Drug Administration (US-FDA) provides orphan status to drugs and biologics which are defined as:

  • Those intended for the safe and effective treatment, diagnosis or prevention of rare diseases/disorders that affect fewer than 200,000 people in the U.S.
  • Or, those affect more than 200,000 persons but are not expected to recover the costs of developing and marketing a treatment drug.

India perspective:

For the first time in India, to increase awareness for the rare diseases, Rare Diseases Day was observed in New Delhi on February 28, 2010. Subsequently 2nd and the 3rd ‘Rare Disease Days’ were observed in Chennai and Mumbai in 2011 and 2012, respectively.

About 6000 to 8000 rare diseases, mostly genetic in nature have been identified in India. It was initially estimated that over 31 million Indians are suffering from rare diseases in the country, many of these diseases still do not have any cure.

However, The Hindu in April 2012 reported, “Taking the lower limit of global prevalence estimate, populous nations like India and China should have more than 70 million rare disease cases each.”

Inaction in India:  

The report further highlights that enough awareness has still not been created in India to address this challenge, despite publication of several rare disease case reports in the peer reviewed journals and existence of a number of support groups, though with inadequate resources.

Use of ‘Social Media’ to increase awareness:

Even in the developed markets, leave aside India, it is still hard to get required health related information for individuals suffering from rare diseases. In many countries, finding no better alternatives, such patients decide to be virtual experts on the diseases they are suffering from, making full use of social media, like Facebook.

Interaction through social media often makes it easier for such patients not only to find each other, but also to share expertise and experience eventually to get proper medical care with affordable drugs.

‘Orphan Drugs Act’ must come with adequate incentives:

ODA, when enacted in India, should not be a half-hearted approach or be a zero-sum game for all. It should come with adequate financial and other incentives to create a sound business sense in this new ball game for the pharmaceutical players in India.

Just for example, the incentives of the ODA in the U.S include:

  • Funding towards investigation for “Orphan Disease’ treatment
  • Tax credit for Clinical Research
  • Waiver of fees for New Drug Application (NDA)
  • Offering more lucrative incentive than product patent (product patent requires the drug to be novel), as the orphan designation of the product by the US FDA and product approval by them are the only requirements for 7 year market exclusivity of an ‘Orphan Drug’ for the specified indication
  • Market exclusivity of ‘Orphan Drugs’ become effective from the date of regulatory approval, unlike product patent, product development time remains outside this period
  • The drugs, which are not eligible for product patent, may be eligible for market exclusivity as an ‘Orphan Drug’ by the US-FDA

Proof of the pudding is in the eating:

Thanks to this Act, currently around 230 ‘Orphan Drugs’ are available in the U.S for the treatment of around 11 million patients suffering from rare diseases. With the help of ‘Human Genome Project’ more orphan diseases are expected to be identified and newer drugs will be required to treat these rare ailments of human population.

‘Orphan Drugs Act’ encourages ‘Orphan Drugs’ development:

It is now a reasonably well accepted fact that ‘Orphan Drugs Act’ encourages ‘Orphan Drugs’ development.

In an article titled, “What the Orphan Drug Act has done lately for children with rare diseases: a 10-year analysis”, published by the National Center for Biotechnology Information (NCBI), U.S, National Library of Medicine, the authors articulated that in the U.S. 1138 orphan drugs were designated and 148 received marketing approval, of which 38 (26%) were for pediatric diseases, from 2000 to 2009. The percentage of approvals for pediatric products increased from 17.5 (10 of 57) in the first half of the decade, as compared to 30.8 (28 of 91) in the second half.

Based on the data the paper concluded that incentives provided in the ‘Orphan Drugs Act (ODA)’ of the United States of America, have led to increased availability of specific drugs for the treatment of ‘Rare Diseases’ in the country.

Others followed… but when will India…?

As stated above, 1983 signaled the importance of ‘Orphan Drugs’ with the ‘Orphan Drugs Act (ODA) in the U.S. A decade after, in 1993, Japan took similar initiative followed by Australia in 1999. Currently, Singapore, South Korea, Canada and New Zealand are also having their country specific ODAs.

Following similar footsteps, India should also encourage its domestic pharmaceutical industry to get engaged in research to discover drugs for rare diseases by putting an ‘Orphan Drugs Act’ in place, extending financial support, tax exemptions and regulatory concessions like smaller and shorter clinical trials, without further delay.

Every day millions of Indians will continue to suffer from ‘Orphan Diseases’ without affordable treatment, in the absence of an appropriate policy framework in the country for ‘Orphan Drugs’.

Another vindication of the argument:

It is worth repeating that an ODA with proper incentives has been the key motivating factor for the development of many drugs and treatment for a large number of rare diseases, since 1983.

Looking at the increasing number of approvals, it appears that CAGR of ‘Orphan Drugs’ will now be far greater than other drugs. Even in 2011 as many as 11 ‘Orphan Drugs’ have been approved by the US-FDA, as stated below:

Company Brand Name Generic Name Type of Approval Indication Month in 2011
Bristol-Myers Squibb YERVOY Ipilimumab New biologic licence application Metastatic Melanoma March
IPR Pharmaceuticals CAPRELSA Vandetanib New molecular entity Advance medullary thyroid cancer April
Bristol-Myers Squibb NULOJIX Belatacept New biologic licence application Prevent organ transplant rejection June
Seattle generics ADCETRIS Brentuximab vedotin New biologic licence application Hodgkin lymphoma and systemic anaplastic large cell lymphoma August
Roche ZELBORAF Vemurafenib New molecular entity Metastatic melanoma August
Shire FIRAZYR Icatibant acetate New molecular entity Hereditary angioedema August
Pfizer XALKORI Crizotinib New molecular entity Late stage lung cancer August
ApoPharma FERRIPROX Deferiprone New molecular entity Thalassemia October
Lundbeck ONFI Clobazam New molecular entity Seizures associated with Lennox-Gastaut syndrome October
Incite JAKAFI Ruxolitinib New molecular entity Myelofibrosis November
EUSA Pharma ERWINAZE Asparaginase Erwinia chrysanthemi New biologic licence application Acute lymphoblastic leukemia November

(Source: Ernst & Young, FDA and company website. 2012)

The above facts, once again, vindicate the argument that the ODA of the kind of the U.S, broadly speaking, is worth emulating by India with appropriate modifications as relevant to the country.

The global Market:

A new report from Thomson Reuters indicate that the global market for ‘Orphan Drugs’ was over US$50 billion in 2011.

It has also been reported that ‘Orphan Drugs’ contribute 6 percent of US$ 880 billion global pharmaceutical market with a CAGR of 25.8 percent as compared to 20.1 percent for ‘Non-Orphan Drugs’ during 2001 to 2010 period.

High price of ‘Orphan Drugs’ is an issue:

The most challenging part in the fight against ‘Orphan Diseases’ is access to an affordable treatment, especially to affordable ‘Orphan Drugs’.

For obvious reasons, the prices of ‘Orphan Drugs’ are usually very high, some even costs as high as US$ 400,000 annually and thus beyond affordability of many who are outside the purview of any drug price reimbursement scheme.

Most of such drugs are rarely available in India and there is no reasonably affordable ‘rupee’ price for these drugs. Indian patients suffering from rare diseases will currently have no other alternative but to import these drugs directly in US$ term, unless Indian policy makers wake-up some day and take appropriate measures in this important area.

Additional commercial opportunities could be available with appropriate ODA:

Thomson Reuters reported additional commercial opportunities with an appropriate ODA, which are as follows:

  • 15 percent of the ‘Orphan Drugs’ analyzed by them had subsequent launches for other rare illnesses.
  • 6 out of the top 10 ‘Orphan Drugs’ had more than one rare disease indication with an average peak sales of US$ 34.3 billion in overall sales potential against around US$ 8.1 billion of the same for drugs with single indication.
  • Time taken for Clinical Trials (CT) focused on orphan drugs is significantly shorter with a quicker review time than trials involving non-orphan drugs.


It is interesting to note that some of the ‘Orphan Diseases’ are now being diagnosed also in India. As the nation takes rapid strides in the medical science, more of such ‘Orphan Diseases’ are likely to be diagnosed in our country. Thus the moot question is how does India address this pressing issue with pro-active measures, now?

One of the ways to properly address this issue in India could well be to follow the model of our very own the Council of Scientific and Industrial Research (CSIR) for an ‘Open Source Drug Discovery’ (OSDD) program with global partnerships, wherever necessary.

Thus in my view, with an appropriate ODA in place, leveraging the knowledge of OSDD acquired by CSIR and framing a robust win-win Public Private Partnership (PPP) model to discover and commercialize the ‘Orphan Drugs’, India could well demonstrate that the concept of Orphan Drugs for Orphan Diseases is really not Orphan in India.

By: Tapan J Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

The concept of ‘Value Based Pricing (VBP)’ gaining ground to reduce cost of healthcare and improve access…but India is quite different

So far as the pharmaceutical pricing and increasing access to healthcare are concerned, year 2010 perhaps will be remembered as one of the very significant years, at least, in the recent times. In this year with new healthcare reform, President Obama expanded access to Health Insurance to additional around 40 million Americans, the Government in Japan brought in, not much talked about, “premium for the development of new drugs and elimination of off-label drug use” and the Governments in UK and European Union, including the largest market in the EU – Germany, introduced stringent cost containment measures for pharmaceutical products.

Pharmaceutical pricing model is changing across the world:

Overall scenario for pharmaceutical pricing model has undergone significant changes across the world. The old concept of pharmaceutical price being treated as almost given and usually determined only by the market forces with very less regulatory scrutiny is gradually but surely giving away to a new regime.

It started, especially in the developed world, with the generation and submission of pharmacoeconomics data to the regulators for pharmaceutical pricing, by the pharmaceutical companies. However, shortcomings in that system gradually became subject of a raging debate. The newer concepts of Health Technology Assessment (HTA), Health Outcomes Analysis (HOA) and Value Based Pricing (VBP), have started gaining grounds.

Value Based Pricing (VBP):

Value based pricing is basically offering the best value for the money spent. It ‘is the costs and consequences of one treatment compared with the costs and consequences of alternative treatments’.
For pharmaceutical players, VBP perhaps would mean not charging more than the actual value of the product.

On the other hand, price being a function of value that a product would offer, it is also important for the regulators to understand what value in totality that the product would offer, not just for the patients’ treatment in particular, but for the civil society at large.

However, in India, the regulators are still far behind and groping in the dark to find out an appropriate solution to this critical issue. They seem to be quite contended with taking arbitrary, non-transparent populist decisions.

The concept is gaining ground:

The concept of ‘evidence-based medicine’ , as stated earlier, is gaining ground in the developed markets of the world, prompting the pharmaceutical companies generate requisite ‘health outcomes’ data using similar or equivalent products. Cost of incremental value that a product will deliver is of key significance. Some independent organizations like, the National Institute for Health and Clinical Excellence (NICE) in the UK have taken a leading role in this matter.

VBP could help in ‘freeing-up’ resources to go to front-line healthcare:

On November 11, 2010 ‘Pharma Times’ in a news item titled, “Government (UK) to consult on drug pricing in December’ reported the following:

Consultation on the government’s plans to introduce value-based pricing (VBP) for medicines will begin next month, the Department of Health has announced.
The consultation will run until next March, the Department reveals in its newly-published business plan for 2011-15. The plan sets out the coalition government’s structural reform priorities for health care, which are to: – create a patient-led NHS; – promote better healthcare outcomes; – revolutionize NHS accountability; – promote public health; and -reform social care.
These reforms ‘will help to create a world-class NHS that saves thousands more lives every year by freeing up resources to go to the front line, giving professionals power and patients choice, and maintaining the principle that healthcare should be delivered to patients on the basis of need, not their ability to pay,’ says the Department”.

Global pharmaceutical companies using more ‘health outcome’ data to set pricing strategies:

Some global pharmaceutical majors have already taken pro-active measures on the subject. In early 2009, reported agreements between Sanofi-Aventis, Procter & Gamble and Health Alliance as well as Merck and Cigna vindicate this point. These agreements signify a major shift in the global pharmaceutical industry’s approach to gathering and using ‘health outcomes’ data

In the Sanofi-Aventis/Procter & Gamble-Health Alliance agreement, the concerned companies agreed to reimburse Health Insurance companies expenses incurred for patients suffering from non-spinal bone fracture while undergoing treatment with their drug Actonel.

In the Merck/Cigna agreement, Cigna will have the flexibility to price two diabetes drugs based on ‘health outcomes’ data.

‘Outcomes-based’ pricing strategies are expected to become the order of the day, in not too distant future, all over the world.

The ground realities in India are very different:

Medicines are very important and constitute a significant cost component of modern healthcare systems, across the world. In India, overall healthcare system is fundamentally different from many other countries, even China. In most of those countries around 80% of expenses towards healthcare including medicines are reimbursed either by the Governments or through Health Insurance or similar mechanisms. However, in India situation is just the reverse, about 80% of overall healthcare costs including medicines are private or out of pocket expenses incurred by the individuals/families.

Since 1970, the Government of India (GoI) has been adopting various regulatory measures like cost based price control and price monitoring to make medicines affordable to the common man. For those products, which are patented in India, it has now been reported that the Government is mulling the approach of price negotiation with the respective companies.

However, we should keep in mind that making drugs just affordable in India, where a large number of population does not have access to modern medicines for non-price related factors, is indeed not a core determinant of either healthcare value or proven health outcomes or both.

Till VBP is considered, cost-effective ‘health outcome’ based medical prescriptions should get priority:

Expenditure towards medicines can be considered as an investment made by the patients to improve their health and productivity at work. Maximizing benefits from such spending will require avoidance of those medicines, which will not be effective together with the use of lowest cost option with comparable ‘health outcomes’.

For this reason, many countries have started engaging the regulatory authorities to come out with head to head clinical comparison of similar or equivalent drugs keeping ultimate ‘health outcomes’ of patients in mind. A day may come in India, as well, when the regulatory authorities will concentrate on ‘outcomes-based’ pricing. However, in the Indian context, it appears, this will take some more time. Till then for ‘health outcome’ based medical prescriptions, working out ‘Standard Treatment Guidelines (STG)’ , especially for those diseases which are most prevalent in India, should assume high importance.

Standard Treatment Guidelines (STG):

STG is usually defined as a systematically developed statement designed to assist practitioners and patients in making decisions about appropriate cost-effective treatment for specific disease areas.

For each disease area, the treatment should include “the name, dosage form, strength, average dose (pediatric and adult), number of doses per day, and number of days of treatment.” STG also includes specific referral criteria from a lower to a higher level of the diagnostic and treatment requirements.

For an emerging economy, like India, formulation of STGs will ensure cost-effective healthcare benefits to a vast majority of population.

In India, STGs have already been developed for some diseases by the experts. These are based on review of current published scientific evidence towards acceptable way forward in diagnosis, management and prevention of various disease conditions. STGs, therefore, will provide:

- Standardized guidance to practitioners.
- Cost-effective ‘health outcomes’ based services.

GoI should encourage the medical professionals/institutions to lay more emphasis and refer to such ‘heath-outcomes’ based evidences, while prescribing medicines. This will ensure more cost effective ‘health outcomes’ for their patients.

Steps necessary for ‘Standard Treatment Guidelines (STG):

1. Get Standard Treatment Guidelines (STG) prepared for the diseases more prevalent in India, based on, among other data, ‘health outcomes’ studies.

2. Put the STG in place for all government establishments and private hospitals to start with.

3. Gradually extend STG in private medical practices.

4. Make implementation of STG a regulatory requirement.


Till VBP concept is considered appropriate for India by the regulators, STG model for drug usage would help both the doctors and the patients equally to contain the cost of treatment in general and the total cost of medicines in particular. Encouraging implementation of STGs in India, as a first step towards VBP, especially for prescription medicines, the country will require, above all, a change in the overall mindset of all concerned. The use of an expensive drug with no significant improvement in ‘health outcome’ should be avoided by the prescribers at any cost, initially through self-regulation and if it does not work, stringent regulatory measures must be strictly enforced for the same… for patients’ sake.

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.