U.S. companies preparing for commercialization typically focus their initial launch preparations on U.S. and E.U. markets, given that they are the largest. However, by emphasizing those large markets exclusively for their initial launches, companies may miss important revenue opportunities in other “Rest-of-World” (ROW) markets. This situation particularly exists for rare diseases. While individual patient numbers for such indications may be relatively small and distributed widely throughout the world, in some cases certain nationalities or ethnic groups may face a higher incidence for a particular condition. For example, one of the largest worldwide markets for Spinraza, Biogen’s treatment for spinal muscular atrophy, is Turkey.
Several other factors make ROW markets especially interesting for consideration by rare disease drug developers:
1. Opportunities for Early Revenue Streams
Several nations allow favorable “Named Patient Importation” (NPI) mechanisms that allow drugs approved in the United States or potentially another country to be imported into that ROW market, where they are often reimbursed at a price close to that commanded in the country of first approval. Sales in such importing countries can thus represent significant opportunities for early revenues that a product developer can leverage as it prepares for regulatory approval beyond the first country of launch.
Markets that are particularly favorable for their NPI regulations include the six Gulf Cooperation Council states: Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain and Oman. Saudi Arabia has the highest population, and citizens receive free access to medications — even drugs made available through NPI which aren’t yet locally approved. Qatar is usually the first market to grant access to innovative new therapies. Turkey also has a large population and a favorable early NPI framework. However, Turkish authorities will likely request that an NPI-listed drug seek registration after a few years, which will generally lead to a price decrease but an increase in the sales volume within that market.
Of the Latin American countries, Brazil offers an established NPI mechanism, although complicated by the requirement for legal action against the government to gain access to drug through NPI. Brazil has the added advantage that a country-specific regulatory filing can be pursued simultaneously; however, reimbursement may take some time after the drug is approved.
While Israel also offers a (somewhat cumbersome) NPI program, most companies directly pursue drug registration, which is fairly straightforward and typically spans 12 months from application to approval, followed by 2-3 months of reimbursement negotiations.
2. Efficient Market Deployment
Many ROW regions have highly capable distributor organizations that understand the specificities of each market and often have existing customer relationships. Distributor deals are typically made at a percent of sales, so from a company perspective can represent an opportunity for early revenue streams with limited upfront and recurring investments. Moreover, using an experienced, well-established distributor rather than launching direct, can enable a product developer to focus more resources on the next, potentially larger market that they want to enter. Companies should understand the regulatory risks in a particular market and be careful to remain in legal compliance, however. A misstep, even if it only affects one patient, will reflect strongly on a drug developer’s global reputation, including that within the United States and European Union.
3. Medium- to Longer-term Opportunities
In some countries, where no favorable NPI pathway exists, there are still significant opportunities over the medium- to longer-term that should not be overlooked. Japan is one example. No early access opportunity exists in Japan, and bridging studies are generally required for drug registration based in part on data from outside the country – thus, considerable upfront investment into R&D is needed before market access is possible. However, if orphan designation is achieved for a drug, a company can expect a positive impact on pricing negotiations; Japan is an attractive market given its relatively high levels of pricing.
Clearly, ROW markets offer good opportunities for rare disease companies to expand their sales potential beyond what U.S. and E.U. markets offer, both in the near and longer term — and the requirements for market entry within both timeframes should be considered at a high level early on. In high-priority markets that provide early revenue opportunities, companies should identify and prioritize partnering with capable distributor organizations having regional expertise and connections. In this case, good alliance management by the drug development is an essential skill, separate from business development expertise.