The Irony Of Niche Pharmaceuticals

Niche pharmaceuticals, what are they? Well they are the pharma drugs specially developed to combat rare diseases and conditions. They are often also referred to as "orphan drugs." There are reportedly 7,000 such rare diseases affecting a very small percentage of people in the world.

On the other hand, the commonly and mass produced pharmaceutical medicines are called generic drugs. These include medical drugs like paracetamol, which can be recognized by one of its brand name “Crocin.”

WHY HAS IT LAGGED?

The pharma companies are all about the profit and growth. The pharma sector has done very well with its business model of mass producing and selling generic drugs. It has given the pharma sector great profits, making it one of the most highly profitable industries. It is all about the profits and growth for the pharma companies, as fundamentally, it is a business. This compelled the pharma companies to keep their distance from the production of orphan drugs. Instead, they found it more viable to stick with the tried and tested formula of generic drugs.

The process of a medicine to be developed and approved is a long and costly one. Majority of such new drugs fail to show any therapeutic positives, and hence result in waste of resources. According to industry sources, gaining approval for a new drug product takes an average of 10–15 years of research and development, and testing. And then again the investment needed for this is very high. More than 80 percent of drugs that enter clinical development never get approved for market.

RISE OF THE OPRHAN

The niche pharma market has certainly picked up pace in the last few decades. We are seeing increasing enthusiasm amongst pharma companies to cultivate treatment and medication for rare conditions. While earlier big pharma companies were apprehensive about niche drugs because of their liability and fear of financial losses, this view is now changing quick as they have come to realize this could be even more lucrative than the generic drugs sector.

Following are the major reasons for this change in scenario.

·Orphan Drug Act

The major turning point for the niche pharma market was the Orphan Drug Act passed in 1983 by the Food and Drug Administration (FDA). This encouraged pharmaceutical companies to invest in treatment for rare diseases, and provided financial support from governments.

Reduced development costs and lack of competition means orphan drugs often carry large price tags, meaning they could generate large profits despite the small number of consumers.

Since the act, more than 500 products for rare diseases have been approved in the US alone.

By 2016, more than 40% of new drug approvals consisted of orphan drugs.

This field has become so lucrative that more and more companies are looking to gain a share of the market, including many top pharma companies of the world.

·Potential Market and Profit

The generic sector dominates the pharma market. However, it does not guarantee long-term profitability or financial stability. As you can imagine, the competition is very cut-throat in generic drugs as all major pharma companies produce them. This also cuts the profit margin down. The highly competitive nature of this sector is forcing companies to look at personalized and niche medications, especially those that offer higher value and margins.

As mentioned earlier, of the 7,000 rare diseases, only about 200-300 have treatments available specifically for them. This makes for a huge market still left untapped, something the pharma companies are starting to realize. The profit margin for such medicines is very high and the competition is quite sparse.

·Technology

Over the years, technology has enhanced every part of human life and all the various different fields. The pharma sector is no exception to this.

Technology has played a huge part in advancing medication and treatment.

But not only that, it has connected people despite geographical obstacles and cultivated a sense of community amongst them. It has helped make people more aware about the rare diseases and conditions and given them a voice to demand treatment.

Technology has made it easier for people to get access to such treatments and medications.

All in all, the niche pharma is certainly on the rise. It is advancing at a very rapid rate, with new innovation and treatment for various rare conditions every year. While it is very much a positive aspect to have many companies working on such conditions, we must also make sure that the people in need of these treatments get easy access to it and also make sure they do not have to break the bank to get them.

Well do you get the irony? A niche sector, slowly but surely gaining momentum and on its way to being niche-no-more! Isn’t that the dream!