Effective Market Exclusivity of New Molecular Entities for Rare and Non-rare Diseases

Background Growth in development, approvals, and revenue of drugs treating rare diseases (orphan drugs) has been increasing over the last four decades, which has drawn substantial attention to these products. Much of this growth has been attributed to the incentives created by the Orphan Drug Act, which includes a seven-year exclusivity period for the approval of rare disease indications. Objective This study aims to compare the effective market exclusivity period of small molecule new molecular entities (NMEs) for rare (orphan) and non-rare (non-orphan) diseases approved by the U.S. Food and Drug Administration (FDA) from 2001–2012. While the overall length of a drug’s effective market exclusivity period has been explored previously, there is little empirical research evaluating the differences in its duration between drugs for rare and non-rare diseases. Methods Data sources utilized in this analysis included the NME Drug and New Biologic Approvals Reports, Orange Book, Orphan Drug Product Designation Database, Drugs@FDA and IQVIA’s National Sales Perspective. We computed the effective market exclusivity period for each NME as the time from NME approval until approval of the first generic competitor. We then regressed the effective market exclusivity period for each NME, on orphan disease status, and other NME market factors using a Cox proportional hazards model. Subsequently, we calculated regression-adjusted median effective market exclusivity periods for both orphan and non-orphan NMEs to estimate effective exclusivity extensions from orphan status. Results We find that only individual NMEs approved for the treatment of both orphan and non-orphan indications lower the hazard of generic entry (hazard ratio 0.464, p = 0.030) in comparison with non-orphan NMEs with a single indication. The associated additional median survival time for these NMEs is 1.9 years. Conclusions NMEs’ orphan status per se is not associated with a reduction in the hazard of generic entry and longer effective market exclusivity periods in comparison with non-orphan NMEs. Only NMEs that were approved for the treatment of both orphan and non-orphan diseases experience lower hazard of generic entry and longer exclusivity periods compared with non-orphan drugs with a single indication.