Insights

Orphan Drugs: Small Markets, Big Challenges, Enormous Opportunities


Matt Gill, Associate Principal


[For] companies that are facing competitive pressures and are looking for ways to expand their portfolio, these can be very attractive spaces. The benefits of succeeding in an orphan market can be very, very high. But companies need to take a new approach.

Orphan markets…are areas of tremendous unmet medical need. And these are areas with devastating diseases that need solutions.

Now, the incentives are really in the company’s favor to enter orphan markets. The government has put in place a number of regulations—they allow for extended patent exclusivity of the drug to give companies incentives to invest in this space. They give special tax benefits for companies that enter orphan spaces.

And when it comes to payers, oftentimes the orphan market drugs can fly under the radar of payers. Payers are focused mainly on managing some of their larger issues.

There are a number of challenges that companies face in commercializing orphan drugs. Number one, there’s just a limited amount of secondary data that’s available for companies to make educated decisions. There’s a lot more ambiguity. Forecasting with any type of accuracy is extremely hard, especially at launch. Even at the top level, defining the market size is challenging.

Second, it’s always critical to have deep understanding of your customers, but in orphan market spaces because there’s so few customers, it makes it very challenging to conduct market research.

Third, when it comes to the selling model, the traditional national coverage selling model often doesn’t work well in orphan markets. So companies really struggle with their sales reps to try to maximize the effectiveness of the time they have with their customers.

Finally, it’s important to develop really strong and deep customer relationships. A lot of these are diseases that communities have had no solutions for many, many years. They’ve banded together into very powerful and influential advocacy groups. And it’s really important for pharmaceutical companies to earn the trust of these groups.

Often, it’s back to basics—doing Internet searches or desk research to find lists of treatment centers or physicians that are publicly available, [and] surfing publications to identify key opinion leaders to target. Companies also use their field reps to profile their customers in person to gather some of the key metrics that they need to define the go-to-market strategy.

Companies have to turn to channels such as physician referrals to capture patients—patient advocacy groups, social media—some of these new creative ways to find patients for market research.

National coverage, as we said, can be a challenge. Companies are generally finding that the right model can involve some “white space” across the country. Focus your reps in areas of value—metropolitan areas, suburban areas—and cover the rest with telesales channels, or more economical and efficient means. When it comes to building high-value customer relations, the lifetime value of every patient in an orphan market is extremely high. It’s very important to capture and retain these patients.

Companies can do this by making sure that they carefully design their services, and all of the interactions they have with their physician and patient customers. Making sure that their processes are seamless, that they deliver a desire customer experience that’s thought through from the beginning. A company should be thinking about this now in order to capitalize in orphan markets spaces.