The Rise of Orphan Drugs

Published: 2 Aug 2011

By K. Srinivas Sashidhar, Research Analyst, Healthcare, Frost & Sullivan


Orphan drugs are medicinal products intended for the diagnosis, prevention and/or treatment of rare diseases. The Orphan Drug Act was signed into law on January 4, 1983. Rare diseases are classified as those that affect fewer than 200,000 in the United States and lesser than 5 in 10,000 in the European Union (EU).

Orphan Drugs Market

In 2009, the orphan drugs market recorded revenues of $85 billion, and is expected to experience a compound annual growth rate (CAGR) of 6 per cent, to reach revenues of more than $110 billion by 2015.

Drug Approvals

In 2010, there was a significant increase in the number of orphan drug approvals.

Chart 1.1 Orphan Drugs Market: Designated versus Approved Orphan Drugs (World), 2001- 2010.

Since the introduction of the Orphan Drug Act (ODA) in 1983, more than 2,100 compounds have sought orphan status and more than 350 have received regulatory approval.

The reasons for such a drastic increase in the number of approvals are not known. However, one reason could be the Office of Orphan Product Development (OOPD) efforts to encourage companies to develop more drugs. As part of the efforts, OOPD has introduced the following incentives:

Incentive Highlights

Seven-year Market Exclusivity: Orphan drug manufacturers are given the opportunity to enjoy seven years of marketing exclusivity. On approval of an orphan drug, the FDA will not allow other manufacturers to market a drug that treats the same rare disease for a period of seven years. However, marketing exclusivity may be withheld if the manufacturer does not meet the demands of patients.

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