Orphan Drugs Market

Global Orphan Drugs Market Size (2023 to 2028)

As per our report, the size of the global orphan drugs market is estimated to be worth USD 225.16 billion by 2028 and USD 154.23 billion in 2023, growing at a CAGR of 7.86% during the forecast period.

Global Orphan Drugs Market Share Insights:

• Based on drugs, the biological segment dominated the orphan drugs market in 2022.
• Based on the therapeutic area, the oncology segment led the orphan drugs market in 2022
• North America was the largest regional segment in the worldwide orphan drugs market in 2022.

According to an FDA report, it has approved more than 600 drugs since the Orphan Drug Act in 1983. Among those, 14% of orphan drugs are accepted with additional non-orphan indications. The ODA Act has gained acceptance from many countries and boosted the manufacturing of orphan drugs to treat related diseases. This ODA act had come up with financial and non-financial considerations to assure availability and access to orphan drugs. Under this act, government agencies are offering tax credits and subsidies favoring the patient and pharmaceutical companies, which are positively impacting the market.

MARKET DRIVERS:

The growing prevalence of rare diseases is majorly propelling the orphan drugs market's growth.

Over 30 million Americans are recognized with rare diseases, whereas 200,000 people have chronic or acute conditions such as cancer, autoimmune disorders, and digestive disorders, among others. In the United States, biopharmaceutical companies focus on introducing innovative vaccines or drugs for rare diseases as there are no treatment options for some unique conditions. There are approximately 7000 rare diseases, and only five have specific treatments. Advancements in genomic studies will help researchers to develop promising medicines. Studies found that 80% of the origin of the rare disease is genetic. In 2020, COVID-19 disease became a unique, challenging factor for researchers to determine effective treatment procedures.

Government incentives and favorable regulations by the regulatory bodies for orphan drugs boost the market’s growth rate. In 1983, the U.S. Congress passed The Orphan Drug Act which offers incentives to pharmaceutical companies that manufacture orphan drugs in the form of tax credits, grants, and exclusive marketing rights for orphan drugs to encourage pharmaceutical companies to invest in R&D activities for rare diseases. The governments further support the pharmaceutical companies by facilitating favorable regulations for the development and approval of orphan drugs. Furthermore, the governments have been providing funding for the R&D of orphan drugs and support for patient access to these drugs through reimbursement policies and insurance coverage.

In addition, the growing demand for orphan drugs, increasing awareness among people and healthcare professionals regarding the benefits of orphan drugs, and rising demand for quality healthcare contribute to the market growth during the forecast period. Factors such as the growing patient advocacy and support, increasing number of advancements in genetic research and personalized medicine, growing investments for the R&D of orphan drugs by private organizations, an increasing number of collaborations and partnerships among pharmaceutical companies, rising aging population and increasing prevalence of age-related diseases accelerates the market’s growth rate. Furthermore, the growing adoption of technological advancements in drug development, rising awareness and education about rare diseases among people, increasing demand for effective treatments for rare diseases and high unmet medical needs in the rare disease patient population fuel the growth rate of the orphan drugs market.

MARKET RESTRAINTS

High costs associated with the R&D of orphan drugs majorly hamper the market growth. In addition, factors such as limited patient population, poor awareness levels among people regarding rare diseases and orphan drugs and reimbursement issues in some countries hinder the market’s growth rate. Furthermore, the competition from other therapies is another notable obstacle to the orphan drugs market.

Impact of COVID-19 on the orphan drugs market:

According to the European Organization for rare diseases, orphan drugs are produced to prevent and treat rare diseases. Many countries are in the fight against COVID-19. The pandemic created a negative impact on all industries except pharmaceuticals. The orphan drugs market has seen the fastest growth rate during the COVID-19 pandemic. The rise in the number of research and development activities by the market key players to find a vaccine or drug for the novel coronavirus disease has fuelled the growth rate of the market. Several market participants have invested significant amounts in the R&D of vaccines for COVID-19 during the COVID-19 pandemic. On the other hand, the COVID-19 pandemic has caused supply chain disruptions, delayed clinical trials and reduced healthcare spending and these factors have imposed a negative impact on the growth of the orphan drugs market during the COVID-19 pandemic. However, considering the reduced impact of the COVID-19 pandemic, the global orphan drugs market is anticipated to witness a notable CAGR during the forecast period.

REPORT COVERAGE:

This research report on the global orphan drugs market has been segmented & sub-segmented into the following categories.

Orphan Drugs Market – By Drug Type:

• Biological
• Non-Biological

Based on drug type, the biological orphan drugs segment had the largest share of the global orphan drugs market in 2022 and is predicted to continue dominating the segment during the forecast period owing to the growing incidence of various rare diseases which are curable with biological drugs and growing investments in developing drugs for rare diseases by private organizations. The growing number of advancements in biotechnology, the favorable regulatory environment for biological orphan drugs and increasing investments for the R&D of these drugs further fuel the growth rate of the segment.

The non-biological orphan drugs segment is predicted to showcase a healthy CAGR in the coming years due to the rising prevalence of genomic studies and the rise in the number of people suffering from chronic diseases. The growing adoption of technological developments in drug discovery and development and the rising demand for personalized medicine further promotes the segment’s growth rate.

Orphan Drugs Market - By Therapeutic:

• Hematology
• Neurology
• Oncology
• Others

Based on therapeutic areas, the oncology segment held the largest share of the global orphan drugs market in 2022 and is predicted to grow at a healthy CAGR during the forecast period. The segmental growth is primarily driven by the growing cancer patient population worldwide and rising healthcare expenditure. As a result, companies such as Johnson & Johnson, AbbVie, and Bristol-Myers Squibb emphasize manufacturing orphan drugs related to the oncology segment.

The neurology segment is predicted to witness the highest CAGR during the forecast period owing to the growing prevalence of neurological disorders worldwide, growing support from the regulatory bodies such as Food and Drug Administration.

The hematology segment occupied a notable share of the worldwide market in 2022 and is predicted to register a healthy CAGR during the forecast period owing to the growing patient population worldwide with hematological disorders.

Orphan Drugs Market - By Region:

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East and Africa

Geographically, the orphan drugs market in North America accounted for the largest share of the worldwide market in 2022 and the region's dominance is predicted to continue throughout the forecast period. The growth of the North American market is majorly driven by the growing adoption of technological advancements in the drug discovery and development and the presence of notable drug manufacturers in North America. The favourable regulatory environment for orphan drugs in North America, rising prevalence of rare diseases and the presence of sophisticated healthcare infrastructure further fuels the growth rate of the North American market. The U.S accounted for the largest share of the global orphan drugs market in 2022, as it spends nearly 20% of its GDP on health. Canada is another potential market for orphan drugs in North America and is predicted to witness a healthy CAGR during the forecast period.

The European orphan drugs market accounted for a substantial share of the global market in 2022 and is expected to grow at a promising CAGR during the forecast period. Factors such as the growing prevalence of novel drugs, the growing incidence of rare diseases across the European region boosts the growth rate of the European market. In addition, the presence of numerous biotech and pharmaceutical companies and favourable regulations for the development of orphan drugs by the regulatory bodies such as the European Medicines Agency (EMA) further promotes the European market growth. Germany, France and the UK held the most significant share of the European market in 2022.

The orphan drugs market in the Asia Pacific is estimated to hit the highest CAGR during the forecast period in the worldwide market owing to the rising prevalence of rare diseases and the presence of developing countries such as India and China. In addition, the growing awareness about rare diseases, rising need for effective treatments, increasing healthcare expenditure and the growing geriatric population in the APAC region contributes to the APAC orphan drugs market growth during the forecast period. During the forecast period, India, China, Japan and South Korea are predicted to hold the largest share of the APAC market.

The Latin American orphan drugs market held a considerable share of the global market in 2022. Factors such as the rising prevalence of rare diseases, growing demand for effective treatments and increasing focus on healthcare infrastructure development propel the regional market growth. Mexico and Brazil held the major share of the Latin American market in 2022 and the same is expected to repeat throughout the forecast period.

The orphan drugs market in MEA is expected to grow at a moderate CAGR during the forecast period owing to the increasing investments in healthcare infrastructure and the rising awareness about orphan drugs.

KEY MARKET PARTICIPANTS:

Johnson and Johnson, Novartis, Celgene, and AbbVie are orphan drug market leaders. In addition, companies like GlaxoSmithKline, Roche, Alexion, Sanofi, Bristol Myers Squibb, Pfizer, Vertex, and Merck are also playing a promising role in the orphan drugs market.

RECENT HAPPENINGS IN THIS MARKET:

• In March 2023, Cyclerion Therapeutics, Inc. announced that Zagociguat received the orphan drug status by the USFDA. Zagociguat is used in the treatment procedures of mitochondrial disease.
• In February 2023, Asklepios BioPharmaceutical, Inc. announced that AB-1003 has gained the Orphan Drug Designation by the European Commission. AB-1003 is now a orphan drug and used in the treatment procedures of limb-girdle muscular dystrophy (LGMD).
• In February 2019, Roche bought Spark Therapeutics. This deal helped Roche to make its presence more robust in advanced therapies. On the other end, Spark Therapeutics was named the first company in the United States to receive gene therapy approval for their Luxturna. Luxturna is a therapy to treat rare inherited eye diseases.
• In January 2019, an agreement between Medunik Canada and HRA pharma had legal rights for marketing and distributing an orphan drug named Lysodren, which helps treat inoperable adrenal cortical carcinomas.
• In April 2018, AveXis was purchased by Novartis. AveXis is a Biotechnology Company based out of the United States that develops therapies for rare disorders related to neurological genetics. AVXS-101 is the lead candidate of AveXis, is a gene-replacement therapy to treat a rare disease called SMA (spinal muscular atrophy)
• In December 2017, Aprecia Pharmaceuticals collaborated with Cycle Pharmaceuticals to introduce 3D-printed orphan drugs in foreseen years.
• In November 2016, AbbVie, one of the leaders in manufacturing orphan drugs, received the Orphan Drug Designation from the FDA.