directly to institutions. Orphan drugs more often
use what are referred to as alternative distribu-
tion techniques. These include mail order phar-
macy and direct sales to patients, physicians and
institutions.
21.8 Marketing benefits to sell
orphan drugsMost pharmaceutical companies that market their
own products can benefit from marketing orphan
drugs. These benefits include the following.
- Itisusefulforsales representativestouseorphan
drugs as an entre ́e to see physicians. In this busy
world, physicians want new and important med-
ical information and are not as willing to see
sales representatives as they used to be. Thus, a
sales representative who can discuss an impor-
tant new treatment, even for a rare disease, is
likely to have better access to physicians. - It is useful to develop orphan drugs to keep
competitors out of a therapeutic or disease
area of importance to a company. A company
may choose to develop a drug to prevent com-
petitors from doing so and not because they
want to develop an important orphan drug. - It is possible to bundle products more easily if
youhave awhole portfolioof productsin agiven
therapeutic area. Several companies that have
merged in recent years initially felt that some of
the smaller products would be divested or
merely dropped from the portfolio because of
their small size. However, they soon realized
that there was value in even the smaller pro-
ducts, and that the sum of their value was much
greater than the sum of their sales, particularly
when the company approaches managed care or
other groups (with formularies) with a wide
selection of products. - Image enhancement of the company is likely to
occur through development of drugs for rare
diseases. Reporters can easily write heart-
warming stories of patients with rare diseases
who are helped by orphan drugs. Word of mouth
and other public relations methods also help
enhance a company’s image.- It may be possible to have a patient support
group promote a drug by telling their members,
writing articles in their newsletter or in the
popular press, or informing the regulatory
agency about the need to have the product avail-
able for patients to use.
21.9 Common issues for a
company to consider when
developing an orphan drug- Should the company obtain an approved in-
dication or should it allow off-label use of the
drug to provide whatever commercial value it
obtains? This is often viewed as an exercise in
cost accounting, whereby the company totes up
all the costs and resources used to obtain the
indicationandcomparesthetotal with thepoten-
tial sales and profits that would accrue with each
approach. It is important to consider the oppor-
tunity cost of working toward an approved indi-
cation (i.e. if one spendsxdollars and uses
ystaff months to obtain the indication, then
those staff cannot be working on other projects
and the money cannot be applied elsewhere). - Should a company attempt to obtain an orphan
indication or a more common indication first?
Assume that the orphan indication can be
obtained in a much shorter time than the more
commononeandthatthetimeto submit theNew
Drug Application (NDA) is less for the orphan
indication. In this situation, there is a tradeoff
between the smaller amount of sales that will
come sooner with the orphan indication along
with the possibility of off-label use for the more
common indication. The tradeoff is with waiting
longer for the larger indication that will be much
more important commercially. Initially, many
people think that the orphan drug development
route is preferable, but a regulatory authority
270 CH21 ORPHAN DRUGS