- Are alternative treatments available? The
competitive position of the disease area must
be considered. There are several categories of
whether alternative treatments may be used to
treat the rare disease (e.g. none exist, all alter-
natives are highly toxic, alternatives are very
expensive, alternatives are limited in availabil-
ity, alternatives only work in a small number of
patients). - Medical value of the drug. In the author’s
opinion, this is the most important criterion
to judge (or classify) orphan drugs. If the drug
does not have, or is not expected to have, high
medical value, there are very few instances
where its development would make sense. A
classification of medical value may be as sim-
ple as high, medium and low. - Potential use in a more common disease, as
well as in a rare disease. This is often difficult
to know at the outset of development, but
almost every drug that reaches the market is
tested by the medical community in many
other diseases to evaluate its efficacy. - Type of drug. This category considers whether
the drug is a biotechnology-derived and pro-
duced drug or a conventional pharmaceutical
synthesized in a laboratory. - Patient support group. If a patient support
group exists, it may facilitate the development
of the drug by notifying its members about
participation in clinical trials. The group could
also have its members write letters on behalf of
the product to increase awareness in the med-
ical community.
21.4 Economic classification
of orphan drugsAn economic classification is one of the most
relevant alternative classifications to consider, par-
ticularly for companies considering the develop-
ment of orphan drugs. Five categories of drugs can
be described. These are as follows.
1.Drugs with little commercial potential, but with
high medical value. The commercial value may
be subdivided as towhether the product will lose
money and never pay back its development
costs or whether the sales are expected to be
below an arbitrary hurdle rate (e.g. internal rate
of return) and achieve less profit than desired for
new projects added to the company’s portfolio.
In the former case, only wealthy companies that
wish to perform a community service, or have
other reasons than profits for developing the
drug, could undertake the development of a
money-losing drug. If the drug has high medical
value and will not lose money, there are com-
panies that would at least consider developing it
if it met their other criteria (e.g. a therapeutic
area of interest).2.Drugs of moderate or high commercial value
and high medical value. If a few caveats were
met, this category of orphan drugs would never
have a problem finding a sponsor to develop the
drug. For example, it is important there is no
generic drug on the market, or else pharmacies
would fill prescriptions with the generic. If a
generic was available, the commercial potential
of a new brand name drug would only be theo-
retical. This category is meant to imply that
the commercial potential would be real if the
product was to reach the market.3.Variable commercial potential and low medical
value. This category is a very realistic descrip-
tion for many, if not, most drugs at an early stage
of their development, before the clinical effi-
cacy and safety profile of the drug are well
understood. The most wise and educated person
or group of experts can only guess the value of a
drug before it is tested and its profile is known.
One exception to this principle is drugs that are
developed in a new dosage form, but whose
activity and safety are well known.Nonetheless, a drug of low medical value will
rarely be developed unless a company knows
that the commercial value is significant. A
‘me-too’ drug is an example of a drug in this
category.21.4 ECONOMIC CLASSIFICATION OF ORPHAN DRUGS 267