Orphan Diseases Or Population Health? Policy Choices Drive Venture Capital Investments

The US exhibits a remarkable pipeline of biopharmaceutical innovation, with 170 new drugs and biologics launched into the market between 2011 and 2015 and another 22 drugs approved in 2016. A striking feature of the pharmaceutical pipeline is the large percentage launched for the treatment of small “orphan” indications, defined by the Food and Drug Administration (FDA) as including fewer than, often many fewer than, 200,000 patients in the United States. Almost half (74) of the products approved by the FDA between 2011 and 2015 were for orphan indications, twice the number (36) approved during the same period by the European Medicines Agency and a remarkable increase over the total of 35 orphan products approved by the FDA in all the years prior to the Orphan Drug Act of 1983. In 2016, 41 percent of the novel drug approvals were for rare diseases (nine of the 22 approvals). The surge in orphan drugs is a result of public policies that influence development costs and market exclusivity, which in turn influence the prices that can be charged. Early-stage investors in the life sciences pay close attention to policy signals in deciding how to allocate their capital. The policy decisions made yesterday influence investment decisions made today, and hence the direction of innovation tomorrow. Bay City Capital is a venture capital partnership, founded in 1997, that has invested in over 100 life sciences firms worldwide and currently manages $1.3 billion in capital. In recent yea...
Source: Health Affairs Blog - Category: Health Management Authors: Tags: Costs and Spending Drugs and Medical Innovation Orphan Drug Act orphan drugs venture capitalism Source Type: blogs