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Orphan drugs can be a route to success, but pricing is a future problem

Date October 16, 2012

The sharp rise in the share price of Amicus Therapeutics last week, prompted by phase II data on its Pompe’s disease candidate AT2220, has thrown the spotlight on the hitherto lucrative area of orphan indications. Companies developing drugs to treat rare diseases can charge a premium for their products – but there are indications that this strategy might not be sustainable.

The pricing of orphan therapeutics is becoming problematic, with regulators and health authorities beginning to kick at high prices. It is reasonable for developers to expect a reward for the risk they take in seeking to address small patient populations, but when a larger company licenses in an orphan drug and then charges a king’s ransom the situation could appear unfair.

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