Blog January 30, 2017

The Orphan Drug Act: Successes and Challenges

By Alain J. Gilbert, Co-Chair, Bionest Partners


Rare and orphan diseases have grown dramatically as a focus of drug development since the passage of the Orphan Drug Act and the institution of other regulatory and financial incentives in both the United States and Europe aimed at spurring development for such conditions.  Franҫois Beaubien, Ph.D. of Sectoral Asset Management, a firm that manages $1.25 billion of healthcare assets including a private equity vehicle that I advise, has published an excellent overview and history of these initiatives and their impact on orphan and rare disease drug development in their January 2017 newsletter, which we’d like to share with you here (see page 12). He also notes the increasing challenges of pricing such therapeutics, given their small markets and the high cost of drug development generally, especially in light of increasing calls for drug pricing controls.


Also noted in Dr. Beaubien’s article is the concentration of most successful rare disease drug discovery and development within smaller companies. This echoes our earlier and more in-depth analysis on such endeavors, and why we recommend that “Orphans Should Live Alone.”