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The need for such assistance stems in part from a new focus among pharmaceutical companies on drugs for rare diseases or unusual strains of common diseases.
Eleven of the 30 new drugs approved last year, or 37 percent, were for rare medical conditions, the highest percentage on record since the FDA began offering incentives to develop such therapies, known as orphan drugs, about 30 years ago. Additionally, nearly half of the 30 drugs were cleared under FDA’s “fast track” program reserved for drugs that fill an unmet medical need.
“The companies are saying ‘this is actually a viable model.’ Whereas back in the nineties they were skeptical, now they seem convinced,” said Mark Schoenebaum, an analyst with International Strategy Investment.
Analysts credit scientific advances and looming patent expirations with the spate of innovative products. Drugs worth a mammoth $255 billion in global annual sales are set to go off patent before 2016, according to EvaluatePharma Ltd., a London research firm.
The pharmaceutical industry reached its peak of profitability in the 1990s with heavily marketed drugs for common afflictions, like AstraZeneca PLC’s Nexium pill for heart burn and Pfizer Inc.’s Lipitor for high cholesterol. In the last decade drugmakers managed to extend the patents on those drugs by tweaking their formulations, resulting in so-called ‘follow-on’ drugs. But with most of those products on the cusp of losing patent protection, drugmakers have finally been forced to innovate, often turning to hard-to-treat diseases for which there are few existing therapies.
The FDA grants companies seven years of exclusive, competition-free marketing for each newly approved orphan drug, as well as tax breaks on the costs of developing the drugs. Orphan drugs also typically command much higher prices than other drugs. Last year French drugmaker Sanofi paid $20 billion to acquire specialty drugmaker Genzyme, whose products range from $100,000 to $300,000 for one year’s supply.
One side effect of the focus on developing drugs for rare diseases is increased investment by the government to spur research into more common public health threats with the potential to cause mass outbreaks of illness. One such threat comes from so-called superbugs, or bacteria that have grown resistant to antibiotic drugs.