Commercializing an Orphan Drug: Why “Just” Serving a High Unmet Medical Need Won’t Do the Job

September 8, 2020
Wolfram Lux and Simone Seiter

Dr. Wolfram Lux is a Senior Director and Dr. Simone Seiter is a Partner in the global Pharma & Biotech practice within Simon-Kucher & Partners Life Sciences Division (Frankfurt, Germany).

Looking at four building blocks of success, Wolfram Lux and Simone Seiter investigate what it takes to win and be successful when commercializing an orphan drug

Orphan and ultra-orphan diseases are the new Promised Land for the biopharmaceutical industry. Although tiny in patient population compared to well-known diseases, the 7,000 rare diseases known today affect up to 30 million patients in the US, almost 10% of its population. An alarming 95% of these diseases have not yet a medication or therapy, and diagnosis takes five to seven years on average, as they are not top-of-mind for physicians.

However, today they have a voice. Countless patient advocacy groups have driven the attention of the industry, payers, and policy makers toward diseases so rare that sometimes not even 50 patients in a country are affected.

While there were only a few players addressing the medical needs of these diseases ten years ago, the field of small research-driven biotech companies has expanded to an entire new industry that has begun harvesting the fruits of their labor and paving the way for others. On that journey, they have resolved tremendous biologic, scientific, and technical challenges, while also learning that commercializing these drugs does not follow the usual principles of the established pharmaceutical industry.

What makes rare diseases different from specialty diseases?

The fact that there are only few patients in rare diseases means they are distinguished from specialty diseases in several ways:

  • Partnerships driven by strong commitment to patient communities: Patient advocacy groups are a driving force behind drug development and provide crucial input for biotechs
  • Fewer resources: Many biotechs are small, research-driven organizations with limited resources
  • CoE model: Technical and medical requirements for application are typically very high, requiring well-trained and experienced facilities
  • Especially challenging market access: Challenging manufacturing and small lot production drive production costs, calling for six-digit reimbursement prices that challenge established payer agendas and payment models
  • Relentless patient focus: Every single patient counts
  • Need for proactive patient identification: A logistical challenge of unique relevance in rare diseases

These characteristics establish an entire new business model, set apart from the ethical pharma, generics, and OTC business. However, the rules of the game have not yet been fully laid out, and many things remain in flux while new ideas and approaches are tested along the product life-cycle. As a consequence, most biotechs in the orphan space have failed to meet their own expectations when looking at orphan launches between 2015 and 2019:

Three in four orphans launches missed launch goals so far, as stated by analysts. Established pharma only missed out on 55% of their launches. In the EU, almost 90% of orphan drugs continue to fail in year two after launch. In the US, still over 60% of orphan drugs continue to fail in year two after launch.

What are the major building blocks of success?

Whilst an entire new industry is still trying to find its ways around, Simon-Kucher has been looking at the findings so far and identified four prerequisites for commercial success.

  1. Master the patient journey before anything else
    successful companies have recognized that the patient journey starts with effective patient engagement. As there are only few patients spread across significant geographies, finding them and facilitating traffic to a center of excellence is where the business starts and is how patients get access to desperately needed therapy. The logistical challenges to counteract the existing dilution effect, however, are enormous, and exceed everything we are used to from established pharma.
  2. Optimize trail design and endpoints to maximize asset value
    The tiny patient population means that classical multi-arm and potentially even biomarker-backed RCT designs slow down recruiting and study speed. New ideas currently being considered include synthetic-control arms with external data or multi-domain endpoint concepts, currently under FDA review. Put simply, why should we keep using single primary endpoints to evaluate complex and sometime multi-organ diseases?
  3. Overcome current payer paradigms for commercializing innovative orphan drugs
    Payers' agendas and incentives are still mainly based on an annual (or short-term) perspective and common payment models are suboptimal for the often highly front-loaded therapy costs of rare diseases. Players and payers around the world are discussing new payment models and risk-share agreement forms in order to offset the risk of potentially vanishing therapeutic effects over time, e.g. in gene-therapies. Rare disease players should consider trade-offs between high-quality evidence, risk, and speed to market when thinking about their P&MA strategy. Successful players have aimed at evolving the level of cooperation between treatment centers and payers to advance fair and predictable payment schemes for their therapies on the basis of e.g. outcome-based agreements, including payment installment plans.
  4. Ensure supply chain is embedded deeply in commercial planning
    Often, one production lot means only one or few patients. Therefore, supply chain management, which is typically relatively rigid, needs to be agile and allow for flexibility to accommodate commercial needs. Close alignment with daily or weekly commercial operations is key to providing patients with access. The supply chain needs to be fully GMP-compliant and production processes scalable on various levels where necessary, e.g. in terms of digitalization, product release procedures, supply of ingredients, stockholding, cold-chain transport, etc. Successful players also consider the fact that many commercial production slots are taken by larger scale diseases, and therefore build capabilities and capacity early or build in-house.

Insights and recommendations for those preparing for their go-to-market

Based on these four building blocks of success, we investigated what it specifically takes to win and be successful commercializing an orphan drug. We analyzed previous orphan launches and spoke with selected players to understand what made them succeed, identifying four major areas that made the difference in commercialization success:

  1. Launch process planning
  2. Build-up of the commercial model
  3. Customer engagement along the patient journey
  4. Partnership with and utilization of patient advocacy groups

Launch process planning for an orphan drug is different in four ways:

  1. Supply chain planning: Ensure availability of the product on time by deeply embedding it in daily commercial planning and management. Successful players said allowing and enabling flexible management is key to avoiding shortcomings in the logistical chain and building trust among patients, HCPs, and all stakeholders along the patient journey.
  2. Set-up planning for customer centers of excellence: Point of therapy are specialized centers which involve complex logistics when ordering and applying a rare disease therapy. After initial diagnosis, everything else takes place in designated centers of excellence, making their identification and set-up process key. This requires a true understanding of the daily reality and motivation of all stakeholders involved, on an account level. According to our interview partners, installing a smooth ordering, management, and application process needs to be facilitated on a case-by-case basis, and a one-size-fits-all toolbox or approach typically doesn’t work.
  3. Communication planning: Enforce tight and regular internal communication routines to enable quick reactions to sub-national market dynamics. This requires installing direct patient support, education, internal processes, and trained staff early on. The players who we talked to stressed the need to watch the fine balance between the natural interest of physicians in their upcoming launch and the risk of over-the-top communication, especially now, in times of COVID-19.
  4. General level of planning detail: Given the tiny patient populations in many diseases, often spread across a geography, successful players learned that things don’t run the same way everywhere within a country. “Don’t take country processes and dynamics for granted” was their take-home message. This means finding more detailed answers to well-known questions and watching granular dynamics to allow for flexible adjustment of planning and execution.

The build-up of the commercial model for an orphan drug has significant impact on success

  1. Organizational capabilities and organization: Building a patient-centric organization that enables access to patients was key for the front-runners. This is the design of flexible, focused, and efficient commercial organizations (at efficient scale), working truly cross-functionally to coordinate launch preparations. The players hired market specialists with a broader and therefore less common set of skills to engage customers effectively. In such organizations, a few individuals need to be able to perform on various levels, e.g. general commercial tasks, corporate management, and strong communication. The classical silo-role profile hardly exists in a well-working orphan drug organization.
  2. Stakeholder engagement: Orphan diseases create a universe of challenges in their own right. Engaging early with stakeholders, such as patient advocacy groups, physicians, payers, and policy makers to build and sustain disease awareness and motivate early diagnosis and treatment is much more pronounced than in e.g. specialty diseases. The reason for this need is the limited awareness, lack of strong data, and often suboptimal facilitation of the patient journey and treatment logistic chain. Clarifying and strengthening the pathways to these disease patients and expert networks provides key input for trial design, develops market understanding, and helps to win supporters who lobby for disease development and awareness.
  3. Value proposition: In the context of limited awareness and evidence for an orphan disease, payer and physician expectations on the benefits, risks, and challenges of a drug should be shaped in an effective but also realistic way. Articulate the value of the new treatment option and communicate the paradigm of a new optimal treatment strategy. Develop optimal pricing along the parameters laid out above and evaluate new payment models carefully. Consider a contracting strategy supported by payer-relevant clinical and health economic evidence from a payer-rationalized trial design.

Customer engagement along the patient journey is the source of your business

Many players apply what has worked successfully for the pharma industry over the years. Earlier in this article, we identified answering common question in more granularity as a key success factor. This is especially true when looking at the patient journey in orphan diseases. Here successfully customer engagement truly starts at the very beginning.

After having mastered all of the abovementioned challenges in pre-launch times and during set-up of your organization, now the market holds the fruits for you to harvest. BUT these fruits are not low-hanging. In fact they rather sit toward the top of the tree. Now it is about people … and the following elements have proven to make or break the deal for an orphan once you have made it to market:

  1. Find the patients, pool the patients, and facilitate traffic effectively to your center(s) of excellence
  2. Understand your HCPs’ daily reality and motivation – rare diseases are not top-of-mind and HCPs have loaded agendas that do not circulate around your drug
  3. Let physicians, nurses, and other HCPs know about your treatment and the value of your therapy
  4. Ensure availability of your product through the supply chain and ensure access for patients in a smooth, hassle-free process for all stakeholders during therapy
  5. Establish physician confidence in your therapy and provide help with patient management
  6. Support and educate patients directly and early before launch

Partnership with and utilization of patient advocacy groups (PAGs)

PAGs have always been an integral part of customer engagement in the pharmaceutical industry. However, their role was long marginalized to rather being add-on support for general marketing and sales activities. Their role and benefit is a completely different story in orphan diseases, where many research and development initiatives have not only been influenced but also substantially initiated, driven, and funded by them.

PAGs play various roles along the drug development pathway and contribute significantly to value generation. Winning players have done a good job of living up to their expectations, right from the start of drug development:

  1. Discovery and pre-clinical: Market shapers who push for development of products with high unmet medical need, providing deep insights into the patient journey and daily needs of patients and their families
  2. Trial readiness/Phase I: Partners providing trial design insights and funding for early research
  3. Phases II & III: Influencers, acting as potential partners in market access by informing value dossier development
  4. Regulatory approval/launch: Market shapers, again influencing payer negotiations, expediting reviews, and creating lanes of access for patient sub-populations
  5. Post-launch: Influencers, again strongly influencing engagement on access levers, pricing negotiations, and downstream coverage, as well as building on center capabilities.

PAGs in the course of go-to-market preparations are key stakeholders and should be embedded tightly in the commercial planning and clinical development process.

Conclusion: Launching an orphan is different and timely preparation is key!

After evaluating the orphan disease and manufacturer scene, and analyzing the findings from the frontrunners in ideal and not so ideal conditions, we came to the conclusion that the orphan drug business constitutes a new business model, set apart from the ethical Rx-business in pharma, OTC, and generics.

Preparing a launch and commercializing an orphan drug has to be done differently, with launch excellence in this space built on a few specific areas. And the timelines for engagement and launch start much earlier than we know from ethical pharma, beginning as early as Phases I and II.

The question is, are you also prepared for it and are you prepared in a timely manner?

Dr. Wolfram Lux is a Senior Director and Dr. Simone Seiter is a Partner, both in the global Pharma & Biotech practice within Simon-Kucher & Partners Life Sciences Division (Frankfurt, Germany).