Orphan drugs provide unique opportunity for manufacturers
Among the special designations the Food and Drug Administration can ascribe to treatments, orphan drugs have seen steady growth recently — growth that, because of these drugs’ ability to help patients with few or no options and the market exclusivity that the designation promises, is likely to continue.
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In the last two years, the FDA has broken its record for the approval of these drugs to treat diseases that affect 200,000 or fewer people. In 2014, of the 41 novel new drugs approved, 17 were orphan drugs for rare diseases, and in 2015, that number grew to almost half of the total novel new drug approvals — 21 of 45 were orphan drugs.
But why are manufacturers making such a heavy push among drugs meant to treat tiny patient populations? As Diplomat Pharmacy emerging therapeutic analyst Ryan Chandanais told Drug Store News, “rare diseases aren’t really that rare if you look at them as a whole.” Indeed, the 17 orphan drugs among novel new drug approvals in 2014 were only a fraction of the 49 approved orphan drugs that year — a large increase from the 32 that were approved in 2013. For manufacturers, orphan drugs represent a unique opportunity, in part because of the speed with which they can be approved.
Rare diseases also present a unique business opportunity for drug makers, according to Chandanais.
“I think manufacturers are seeing opportunities in the rare disease states,” he said. “In many cases there are no available treatments for some of these rare diseases or very few available, and if they get a drug approved then they can have the complete market or a significant portion of the market available to them with little or no competition.”
Specialty pharmacy drives prescription growth
It’s no secret that the category of drugs drawing the most attention — and money — in recent years has been specialty pharmacy. And it shouldn’t be surprising that the growth the category has experienced in the past several years — pushed more recently by hepatitis C and oncology treatments — isn’t expected to slow anytime soon.
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Specialty pharmacy sales growth for the year ended September 2015 rose by 23%, according to IMS Health — far outstripping the 8% sales growth that traditional medicines saw during the same period. This increase in sales is accompanied not just by growth in the amount of healthcare spend, but also by an uptick in the regulatory approval of novel new drugs — a group that is about half composed of products dispensed through specialty pharmacy — in the past several years.
In 2014, the Food and Drug Administration set a record when it approved 41 novel new drugs, in addition to 19 new biologics. But in 2015, the agency surpassed its own record, approving 45 novel new drugs and nine biologics. As Diplomat Pharmacy pointed out in its report on the state of specialty pharmacy, many of the novel new drugs and biologics also receive special designations from the FDA, including orphan designation, fast track, accelerated approval and priority. These designations might be contributing to the boom in specialty drug applications and a focus on their development by manufacturers, according to Diplomat’s emerging therapeutics analyst Ryan Chandanais.
“There are a lot of specialty drugs in the late-stage pipeline right now,” Chandanais said. “I think a lot of it has to do with some of the FDA special designations that are out there helping to move drugs through the development process and the FDA review process more quickly than we used to see. … The FDA has a history of granting approvals for drugs treating disease states where there are few or no currently available treatments.”
This was certainly the case among several of the agency’s 2015 approvals, including Praxbind, a first-in-class treatment to reverse adverse anticoagulant effects caused by blood-thinner dabigatran; Lonsurf, which treats metastatic colorectal cancer; Yondelis, which treats soft tissue carcinoma; and new cholesterol maintenance injectables Praluent and Repatha, which are the first in a new class of drug called PCSK9 inhibitors.
One disease state that several years ago had few treatments, but now is the one of the main classes of specialty drugs are treatments for hepatitis C. The big news of 2014 was the approval of Harvoni, which in many cases cured a patient’s viral hepatitis. In 2015, Harvoni received a new indication by the FDA, as did Technivie, to treat different genotypes of hepatitis C. Last year also saw the approval of Deklinza, which treats genotype 3 hepatitis C infection. And though the last several years in specialty have been focused on hepatitis, it’s possible another class of drugs will soon be driving growth. Diplomat’s Chandanais already has an idea of what might be next, and when it will happen.
“One [disease] I’ve been watching is nonalcoholic steatohepatitis or NASH,” he said. “That’s a disease state where I’ve read studies saying anywhere from about 2% to 5% of the U.S. population has some degree of it, and currently there are no available therapies for it.”
Diplomat expected that the first likely treatment for NASH — fatty liver disease among patients who don’t have a history of alcoholism — will be approved this year, but for a different illness — primary biliary cirrhosis. As a result, the first drug indicated to treat NASH could launch in 2017. Beside NASH treatments, Chandanais noted that PCSK9 inhibitors also could be poised for growth.
“You also might see an eventual uptick in the hypercholesterolemia drugs that we had approved in the last year when they get some of their outcomes study results,” he said. “If those are positive, I think you might see uptick in those drugs at that time, too.”
Small chains, big visions
In this issue, Drug Store News previews its DSN 2016 Yearbook, featuring our annual PoweRx company profiles. The full report will be available this summer with exclusive company rankings and profiles of every company in our Top 50. One thing that stands out and is a common theme among all companies featured in the report is that big and small, chains and independents alike, across every class of trade, community pharmacy is transforming more and more from simply a medication-dispensing model to a retail healthcare services provider model.
In the spirit of the 2016 presidential campaign season, we have branded it “Change to Win.”
Two strong examples of that are Ritzman Pharmacy and Benzer Pharmacy — two small chains that are big on innovation and growing their businesses in unique ways.
“If you look at the coffee industry 20 years ago, you got your coffee at Circle K or 7-11. There was no experience expected; you just walked in, got your coffee and left. Starbucks redefined what that experience was for people,” Ritzman Pharmacy COO George Glatcz said.
Ritzman wants to be the Starbucks of community pharmacy. “What we’re doing is changing that community pharmacy experience from being a transactional experience to being more of a healthcare experience,” Glatcz said.
That strategy comes to life in the company’s newest store in Rootstown Township, Ohio, which opened in March. The store is a major component of the company’s brand refresh, which began in fall 2015, around a vision to “pioneer vintage care,” Glatcz explained.
Meanwhile, Benzer Pharmacy is a small chain with a big vision for the future. Today, the company operates about 60 stores — it finished 2015 with 53 stores in nine states and total sales of about $125 million, up almost 40% over 2014, according to company reports — and CEO Alpesh Patel wants to have 600 stores by the end of the year. To get there, Patel will employ a three-pronged strategy, he told DSN, personally purchasing as many as 30 stores himself this year, courting equity partners to invest in other stores and add them to the Benzer network, and a potential merger that would see Benzer acquire an existing pharmacy operator.
As the chain scales up, Patel envisions layering on additional service offerings, such as specialty pharmacy. At press time, the company had just launched a new pet medication website at BenzerPetMed.com.
For more on these two innovative companies, look for the DSN 2016 Yearbook coming this summer.