Orphan Diseases and the Profit Margin

Dec. 18, 2013
Efficiencies from well applied PAT and QbD principles have the potential to re-align orphan drug cost structures

I was following a discussion on LinkedIn the other day about how much it costs to develop a NCE (new chemical entity/API). One of the contributors stated that, out of 100 NCEs, perhaps only one may ever get to the clinical trial stage. About the same time, I heard an ad for “Little Orphan Annie” on TV… which reminded me of “orphan” drugs.

For those who have never heard the term orphan drug, it is simply an existing chemical with pharmacological activity for a condition that is only shared by a “smallish” number of patients (from a handful to as many as 200,000). Both the fact that the patient pool is small and a pharma company cannot patent the existing compound collaborates to prevent its commercial development: No big profit may be returned. There are, of course, a few cases where a company deems the good publicity it receives is worth the effort to develop and distribute such “special” drugs, but these are generally the exceptions to the rule.

One reason for the need of “orphan” status for a given compound (namely, one company is given rights to develop and distribute the product for a set number of years before any competition is permitted) is that developing any dosage form under the current development and production paradigm is very, very expensive. This premium comes from using 1950s product development (i.e., hunt and peck or “this is — sort of — how we did it last time… should work again”) and production (cGMP or “Quality by Testing”) methods. Under these conditions, development is long and arduous and production is spotty, with many batches failing.

This development expense also inhibits the development of NCEs for an orphan disease (defined as only seen in an exceedingly small population). That means, in the screening for activity in the drug development stage, only pharmacological activity applicable to large disease/condition populations is considered. The huge expense here is the three levels of clinical testing, followed by product development and actual production of the dosage form. While a company that discovers a NCE for a minor disease may be covered by patent protection, the need to turn a profit is constrained by the (far from economical) production set-up under which they currently work.

In the vast majority of publications and presentations on PAT and QbD, the cost of production and ROI of currently marketed or soon to be marketed products are mentioned. As a strong proponent of both techniques (actually intertwined like peanut butter and jelly), I have also been guilty of only considering “real” products, without thought to the benefits of a more efficient production for orphan drugs.

In the mid-1970s I worked for a company that largely grew by purchasing small companies, then selling off its assets, eventually letting go most employees and producing the better selling products from that acquisition in their existing facilities. I observed how a product, selling $1 million to $5 million in the older smaller company (for a nice profit), didn’t turn as much of a profit for our larger company with its higher fixed costs. I imagined that, if someone had thought of PAT and or QbD back then, that company might still be going strong.

In a similar vein, looking for drugs for orphan diseases, lowering the “overhead” of development and production might allow a profit to be turned on almost any drug substance. Take pre-formulation, for example. Currently, we mix the API with an excipient in a 50:50 ratio, bottle the two, stress them (with temperature and humidity), then, at set time points, the samples are sacrificed and assayed for any breakdown of the drug. This takes months and gives no indication of multiple reactions between excipients and APIs. A multivariate approach, using a design of experiment would generate far more data, far faster. It would make formulations better from the beginning of the process. Similar work may be employed with stability testing, but that only enhances a good process and can wait.

Where the cost of production would really be lowered would be in continuous processing. Not only could smaller batches — continuously blended and pressed — help with major products, but the smaller size of the equipment would lend itself to the lower numbers of product necessary to be made for orphan drugs/diseases.

Published in the December 2013 edition of Pharmaceutical Manufacturing magazine

About the Author

Emil W. Ciurczak | Contributing Editor