Orphan Drugs: A Sustainable Model for the Pharmaceutical Industry

Background: y y y Definition of Orphan Disease Canada doesn t have a definition for this Examples of Genetic Disorders that fall in this category and Marketed Drugs in the past that have been successful Orphan Drug Policy, who adopted, who didn t (Canada)1 o Firstly introduced in U.S. Jan 4, 1983  Australia followed in 1999 focus on market access  EU 2000 facilitate availability and accessibility o Incentives for pharmaceutical and biotechnology companies: lower application fees, 10 yr market exclusivity, country-specific research incentives for R&D o Canada 1996- Health Canada did not see a need to follow with specific orphan drug policy because R&D or market access for treating rare diseases could be done with existing programs  Canada long criticized by rare disease patients and health experts for not having a formal policy to allow access to orphan drugs while most of the other developed countries do have one2  Without a formal policy in Canada financial incentives for drug companies to obtain approval here is not enough because the market is too small, patients have no way of getting then these certain drugs or they ll have to pay enormous amount of money for them. Biggest issue right now is Access  Why don t we have a formal policy for Orphan drugs? y Cost are priced very high y Evidence to show its benefits to patients are too difficult to assess because sample size is too small  What Canada has right now in regards to decisions to fund for rare disease drugs y Driven by patient advocacy groups that make their cases to Parliament Hill or media y Obstacles in treating rare diseases can be overcome if the federal government is willing to create a new system that takes into account the unique nature of orphan drugs needs a framework that s based on best available evidence and is consistently applied across the country o Needs a standard measure to dictate when a disease is considered rare based on its prevalence in the population (standardized definition) helps policy officials identify the number of rare disease and guide decisions on access

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Canadian Organization for Rare Disorders (2005) http://www.theglobeandmail.com/life/health/new-system-urged-to-treat-rare-disease-patientsanalysis/article1637599/

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Develop patient registries that can track incidence of rare diseases in the population, their progression over time and effectiveness of treatment helps identify any side effects or drug reactions to add onto its efficacy profile o Needs a federal legislation to reimburse patients for orphan drugs and provide appropriate incentives to develop new drugs that treat rare diseases Genzyme s Cerezyme Story blockbuster sales despite orphan drug, mostly because it has virtual monopoly of its market, but now is facing competition threat o Can no longer set P high Myozyme, Aldurzyme Pharmaceutical Landscape of Research & Innovation Impact on Orphan Drug Market o Incentives are still not considered attractive for Pharma to develop despite blockbuster sales risk too high  Stats on approval rate o Expected sales can be off-set if there are competitors, how should Pharma defend against them? o Currently there is no motivation for manufacturers to seek market approval in Canada and ensure access Canada doesn t offer competitive R&D incentives o Economic downturn o Health Care and its Political Landscape in Canada is constantly evolving o

Argument: Need a better model: Currently, given that the drug will be approved, the existing model facilitates innovation for orphan drugs only if it can operate with monopoly pricing. How should Pharma work with the currently existing framework to maximize returns for developing orphan drugs, increase access of its drugs to treat patients with rare diseases, provide a sustainable approach that will continue to motivate manufacturers to develop new drugs in this market segment? o o Building sustainability by looking at how Orphan drugs are reimbursed currently, understanding it s regulatory framework Suggest new policies and recommendations to existing orphan drug policies that favors pharmaceutical and biotech companies  Step-wise incentives for approved and unapproved orphan drugs  Orphan Drugs should exist outside the jurisdiction of the Common Drug Review (CDR) in Canada  Currently Canadian researchers don t have the marketing expertise to broaden the pipeline for new orphan therapies in mainstream disease markets 

New Framework with Appropriate Incentives to Drive Innovation y Priority review ( fast tracking ) for treatments deemed first in class for the treatment or diagnosis of serious, life-threatening diseases where there are clinical evidence to support it has important therapeutic value/benefits

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Accelerated approval instituted by FDA in 1992 allows drugs that treat serious illnesses and fulfill an unmet need based on surrogate endpoint to be approved earlier o Surrogate endpoint a measure that can be examined in a lab, which will reduce the amount of time it takes to bring a drug to market o Priority Review if a product is significantly better in treatment over existing therapies or this is applied if there is no adequate existing therapy, time limit to review by FDA is 6 months Conditional Approval (NOCC) based on surrogate markers or early clinical trial results and postmarketing confirmatory studies are available Reduction of fees for drugs with small market potential Access to unapproved drugs through an Emergency Drug Release Program and Special Authorization Program Regulatory Exclusivity granted in U.S. and Europe, only for several years o Limits generic competitors from gaining market approvals that are not based on patents o Allows a manufacturer to boost profitability for a limited period of time to earn ROI o

Access to Orphan Drugs in Canada y USA, UK, EU, Australia all have their own Orphan Drug Policy, Canada doesn t o US can negotiate conditions for priority review for FDA approval to incentivize companies to research drugs for orphan conditions o Canada can provide priority review and considers surrogate markers Problems with CDR process it s not suited to orphan disorders o Standard Cost-effectiveness review is applied to orphan indications  Indications for orphan drugs typically are based on surrogate markers with no longterm studies however  Typically orphan drugs will be costly not cost-effective  Dealing with treatments that are life-saving or has no other drugs available - illogical to follow the same criteria  Cost-effectiveness ($ for QALY gained) approved if less than $50,000  Off-label use aren t assessed by CDR (b/c there s no clinical data)