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Reducing Pricing Pressures of Orphan Drugs
While Continuing to Incentivize the Innovation
How can high prices for orphan drugs be reduced while continuing to incentivize the innovation in this field?
Pharmaceutical companies are rather reluctant to invest money in orphan drugs. In order to give them incentives to invest the United States uses the system of priority review of regular non-orphan drugs pharmaceutical products that still have to enter the market. This provides more opportunities for companies to invest. This system is not yet implemented in the European Union but it might have potential in the EU as well with the current framework.
There is a need for collaboration between public and private sector in the light of the big data revolution in health care, creating an opportunity for the European Commission to act in the digital revolution that is occuring in the pharmaceutical market. The existing strategies and legal frameworks prevent there from being an overarching data base for rare diseases in Europe, however this proposal suggests regulated and incentivising ways in which orphan drugs can be offered.
The Venture Fund
In the pharmaceutical sector Small and medium-sized enterprises (SMEs) are usually financially overburdened when it comes to the immense costs that are induced by advanced clinical trials. The here proposed intervention envisions an EU public venture capital fund (for orphan drugs) supports innovators at this critical stage allowing them to stay independent from big pharmaceutical players. As a result, the market size increases, leading to more competition, transparency over R&D expenditures and finally to lower reimbursement prices.