The orphan drugs market is expected to register a CAGR of 11.5% over the forecast period. Factors that are responsible for the growth of this market include market exclusivity for orphan drug developers, the rising prevalence of rare diseases, and favorable government policies.
- The prevalence of rare diseases among the global population has been increasing in recent years. To tackle this issue, both developing and developed countries have formulated regulations that promote the development of drugs for rare diseases, as well as make sure that these drugs are easily available to the patients. Currently, the average approval time for non-orphan drugs is around 13 months and the same for orphan drugs is much less at around 10 months.
- The European Union has implemented similar policies for the development of these drugs, and the European governments have individually implemented these policies in their countries. Some of these are Italy’s AIFA 5% Fund, Belgium’s Special Solidarity Fund, and France’s Temporary Authorizations for use. Even the countries in Asia-Pacific have also followed similar steps with countries, like Japan, South Korea, and Taiwan, with initiatives like the Revised Orphan Drug Regulations and Orphan Drugs Guidelines (2003). These initiatives offered tax credits and subsidies to both the patients as well as the pharmaceutical companies. These policies in various countries around the world have evolved the market studied, that has been growing at a healthy rate in recent years.
Key Market Trends
Biological Orphan Drug is Expected to Account for the Highest Market Share
Under the type of drug segmentation, the biological orphan drug may register the highest market share, and this segment expected to grow at a good pace, during the forecast period. This high market share is due to the higher cost of biological drugs compared to non-biological ones. The recent trend of approval of biological orphan drugs for multiple indications has resulted in growth and has been an encouraging factor for new and established market players to enter this market. Another reason is that biological drugs have been used for treating rare diseases for a long time. The most focused orphan disease, i.e., cancer, which has a higher prevalence rate in the developed world, has been effectively treated by biological drugs with fewer side effects.
North America Dominates the Market and Expected to do the same in the Forecast Period
North America currently dominates the market for orphan drugs and is expected to continue its stronghold for a few more years. In the North American region, the United States holds the largest market share. One of the reasons for market growth is that in the United States, a drug designated orphan drug status receives seven years of marketing exclusivity upon FDA approval for a specific indication, tax credits, and user fee waiver. Since 2013, the new indication approvals have increased greatly.
The orphan drugs market is moderately competitive and consists of quite a few major players. In terms of market share, a few of the major players currently dominate the market. With the rising number of diseases and an increasing number of cases each year, a few smaller players are entering the market and holding a substantial share. Some of the major players of the market are Teva Pharmaceutical Industries Ltd, Celgene, Merck & Co. Inc., Bristol-Myers Squibb Company, and F. Hoffmann-La Roche AG, among others.
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