Plain Language Summary

This study examines the pricing and competition of orphan medicinal products (OMPs) in The Netherlands, focusing on how these drugs, which treat rare diseases, are priced and how often generics or biosimilars enter the market after the expiration of their market exclusivity. The EU Orphan Regulation grants a 10-year exclusivity period to OMPs, intended to recover research and development costs. However, the anticipated competition and price reductions after this period are not commonly observed.

The research shows that generics and biosimilars for OMPs take longer to enter the market compared to non-orphan drugs, with an average entry time of 14.2 years. For biological OMPs, competition is particularly scarce due to small market revenue. Even when generics or biosimilars do enter the market, price reductions are modest, averaging a decrease to 70% of the original price, unlike non-orphan drugs, which can see prices drop significantly more.

For small molecule OMPs, a larger market revenue tends to increase the likelihood of generic entry. However, this trend does not hold for biological OMPs, indicating different market challenges for these drug types. Some OMPs are used beyond their initial rare disease indication, especially in oncology, leading to more competition and sharper price decreases due to a broader patient base.

The study suggests that the lack of competition and limited price decreases highlight a market failure that requires policy intervention. Potential solutions could include new pricing policies that ensure price reductions after exclusivity or incentives to encourage generic and biosimilar competition. However, such policies must be carefully designed to maintain the availability of these important drugs and avoid withdrawing them from the market due to reduced profitability.

Overall, the study calls for a balanced approach to policy reform, considering the unique challenges of both biological and small molecule OMPs, as well as those with varying market revenues. Addressing these issues is crucial to ensure sustainable access to essential medicines for patients with rare diseases while supporting innovation in drug development.

^{Note: This content was created with assistance from artificial intelligence (AI) and has been reviewed and edited by ISPOR staff. For more information or for inquiries on ISPOR’s AI policy, click here or contact us at info@ispor.org.}