How has the onset of orphan drugs affected the supply chain?
It is notoriously difficult to reach an individual with a rare disease in the middle of an Eastern European country when their diagnosing physician is in Berlin, their treating physician is 300 miles away and their local pharmacy with no experience in specialist medications is 10 miles away. Robert Donnell, Head of Business Development at Durbin, one of the world’s largest specialist distributors of pharmaceuticals, discusses how you supply drugs to that patient with unmet medical needs.
As patents expire and generics are developed, it is widely acknowledged that the blockbuster (products achieving peak sales of £1 billion or more) mass market model is considerably less profitable than it has been in the past.1 At the same time, regulatory authorities around the world have created incentives for the pharmaceutical industry to develop treatments for rare conditions, often known as orphan diseases.2 These two factors have led to changes in the pharmaceutical industry’s approach to research and development, as well as the subsequent commercialisation of orphan disease drugs.
An orphan disease is a condition that affects fewer than 200,000 people nationwide. There are between 6000–8000 orphan diseases recognised worldwide, of which only 500 have established treatment options.3 Orphan diseases include familiar conditions such as cystic fibrosis and Tourette’s syndrome, as well as less familiar ones such as Hamburger disease.4
Many orphan diseases have as few as a couple of hundred patients around the world and, in extreme cases, it can be even less, such as RPI deficiency wherein only one person has been diagnosed during a 17-year period.5
Prior to the implementation of incentives to develop orphan drugs, the profit motive for this research was limited. The first major initiative to encourage pharmaceutical companies to invest in this research came from the Orphan Drug Act, passed in the United States in 1983. The Orphan Drug Act attributed orphan status to a drug that was intended to treat fewer than 200,000 Americans. Orphan status gave pharmaceutical companies access to research drivers such as
In addition, there were a number of commercial drivers such as favourable reimbursement, fewer hurdles to approval, longer exclusivity, lower marketing costs, faster uptake and premium pricing.6
Despite the substantially smaller population size, a report from Gaze and Breen suggested that the revenue potential of orphan drugs was the same as for non-orphan drugs. The report went on to say that when the various incentives, clinical trial sizes and times, as well as the higher rate of regulatory success, were taken into account, orphan drugs might in fact be more profitable than non-orphan drugs.6
The Orphan Drug Act was one of a number of initiatives credited with the substantial increase in the research and development of orphan drugs. Prior to the Orphan Drug Act in 1983, only 38 drugs had been approved in the United States. However, since 1983, more than 2000 different orphan drug designations have been granted, and more than 400 drugs have received marketing authorisation.7 For comparison, in the decade prior to 1983, only 10 orphan drugs came to market.8
Based on average annual drug designations and orphan drug approvals, 2001 to 2011 was the most productive period in the history of orphan drug development. As of 2010, approximately 200 of the 6000–8000 orphan diseases have become treatable, showing that although this market has experienced exceptional growth, there is still substantial opportunity for further research and development, making this area an attractive proposition for pharmaceutical companies.9
For large multinational pharmaceutical companies, the supply chain for the distribution of blockbusters and other mass market drugs is well-established and highly efficient. In these cases, the supply chain is set up to deliver bulk quantities to the healthcare system; the manufacturer is not normally concerned with supplying an individual. Distributing drugs to isolated populations in disparate parts of the world is a fundamentally different process.
The supply and distribution of a blockbuster drug requires a ‘manufacturer down’ approach, wherein the pharmaceutical company supplies the drug and it is taken up by the mass market either at a pharmacy or a hospital. In contrast, the supply and distribution of an orphan drug requires a tailored ‘patient up’ approach, whereby the needs and location of the patient dictate how it will be distributed.
Because of the low patient numbers, supplying an orphan drug has to be a specialised process. Orphan diseases tend to be more common in a particular area, but that doesn’t mean the disease isn’t prevalent elsewhere around the world. For example, there are 40 orphan diseases called Finnish heritage diseases.
Owing to genetic isolation, the diseases are more common in Finland, but they can still affect people in other countries too. Setting up a supply chain for Finland is a logical step as there are a reasonable number of patients to distribute the drug to. However, setting up a supply chain for every other country a patient lived in would be highly inefficient and lead to wasted stock.
Based on designations and approvals, 2001 to 2011 was the most productive period in the history of orphan drug development
Because of the low number of patients, orphan drug packaging is often multilingual, and the same pack is used in several countries. As a result, orphan drug manufacturers have created central hubs, from which product could be distributed across local borders. It can be a significant cost to set up these hubs; so, in many cases, the work is outsourced to specialist distributors of orphan drugs such as Durbin.
Owing to the low incidence and disparate patient populations that are typical of an orphan disease, it is not always practical — because of cost and time — to gain registration in all the required countries. For example, if a pharmaceutical company has gone through the huge drain on resources to gain registration in America, it would not be worthwhile to gain subsequent registration in another country that only has three patients with the orphan disease.
While it may seem counter-intuitive to supply a medicine within a country where it does not have a marketing authorisation, this practice occurs commonly in the orphan drug arena. The supply and distribution of unregistered orphan drugs is a highly specialised form of logistics, operations and customer services that some pharmaceutical companies may not be used to implementing. Many organisations feel this is a distraction from its core activities and so outsource this aspect of the supply chain to a specialist company.
Above all else, when developing the supply chain for orphan drugs, it is key to map the location of the patients, identify the distribution route to the individual patient, potential cross-border issues, temperature control and, importantly, have a contingency plan should anything go wrong.
1. S. Carroll, ‘Goodbye Blockbuster Medicines; Hello New Pharmaceutical Business Models,’ www.pharmaceutical-journal.com/opinion/comment/goodbye-blockbuster-medicines-hello-new-pharmaceutical-business-models/10966185.article.
2. FDA, ‘Developing Products for Rare Diseases and Conditions,’ www.fda.gov/ForIndustry/Developing ProductsforRareDiseasesConditions/ucm2005525.htm.
3. C. Ehinger, ‘Can Rare Diseases be a Viable Option for the Pharma Industry?’ www.pmlive.com/pmhub/market_access/black_swan_analysis/white_papers_and_resources/can_rare_diseases_be_a_viable_option_for_the_pharma_industry.
4. FDA, ‘Orphan Products: Hope for People with Rare Diseases,’ www.fda.gov/Drugs/ResourcesForYou/Consumers/ucm143563.htm.
5. M.M.C. Wamelink, et al., ‘The Difference Between Rare and Exceptionally Rare: Molecular Characterization of Ribose 5-Phosphate Isomerase Deficiency,’ http://link.springer.com/ article/10.1007%2Fs00109-010-0634-1.
6. L. Gaze and J. Breen, ‘The Economic Power of Orphan Drugs,’ http://thomsonreuters.com/content/dam/openweb/documents/pdf/pharma-life-sciences/white-paper/1001450.pdf.
7. G. De Crescenzo, ‘Challenges in the Development of an Orphan Drug,’ http://congresso.sifweb.org/abs/407.pdf.
8. A. Sharma, et al., ‘Orphan Drug: Development Trends and Strategies,’ www.ncbi.nlm.nih.gov/pmc/articles/PMC2996062/.
9. G. Dutton, ‘The New Economics of Orphan Diseases,’ www.genengnews.com/gen-articles/the-new-economics-of-orphan-diseases/4660/?kwrd=Orphan%20Diseases.