Competitive orphan drug market will drive down prices, OptumRx predicts

At the start of the year, pharmacy benefit manager OptumRx predicted that 40% of all new FDA-approved products in 2020 would be orphan drugs. The PBM hasn’t changed that forecast, but it has come out with a bold new prediction about drugs that address small patient populations.

Developers of orphan drugs will no longer enjoy free rein when it comes to pricing, OptumRx said, for the simple reason that many of the near-term product releases will be entering crowded markets.

“What is new is that we now are starting to see the development of orphan drugs become more competitive, increasing the potential for reduced costs and broader patient accessibility,” Sumit Dutta, chief medical officer of OptumRx, wrote in a report (PDF).

Dutta pointed to two examples, starting with risdiplam, Roche’s candidate to treat spinal muscular atrophy (SMA). The drug, which is expected to win FDA approval later this summer, is an oral alternative to Biogen’s Spinraza and Novartis’ gene therapy Zolgensma. But convenience may not be enough of a selling point, Dutta said.

“While clinical trials are still ongoing, the early results for risdiplam are promising. However, we are lacking long-term efficacy and safety data, and it is unknown whether patients will achieve improved outcomes if risdiplam is used with or after other SMA therapies,” Dutta wrote.

That will increase the burden on Roche to price its SMA drug competitively, Optum predicted. Zolgensma is priced at $2.1 million, and Spinraza costs $750,000 the first year and $325,000 after that.

Another orphan drug that could be coming soon is Nippon Shinyaku’s viltolarsen to treat some forms of Duchenne muscular dystrophy (DMD). It will compete with Sarepta’s recently approved Vyondys 53, a drug the FDA initially rejected citing safety concerns. But the agency did an about-face last December, clearing Vyondys 53 to treat DMD patients with a mutation that can be addressed with exon 53 skipping.

Viltolarsen has the same mechanism of action as Vyondys 53m, Optum noted. Given that DMD affects about 6,000 boys, but only 8% of patients have the mutation that makes them amenable to exon 53 skipping, Nippon Shinyaku could be facing a tough marketing challenge, Optum’s Dutta said.

The company applied for FDA approval “based on data demonstrating an improvement in dystrophin levels, however there is disagreement among experts about, exactly how much additional dystrophin might have a clinical benefit in patients with DMD,” Dutta wrote.

One exception when it comes to price competition in crowded markets could be the only non-orphan drug Optum spotlighted, Trodelvy to treat triple-negative breast cancer (TNBC). Trodelvy, an antibody-drug conjugate (ADC) from Immunomedics, won an earlier-than-expected approval from the FDA in April after having suffered some setbacks, including a 2019 rejection from the agency.

Because Trodelvy is the first ADC to treat TNBC, Immunomedics could enjoy some degree of pricing freedom, even though its initial approval is in the third-line setting. Dutta spotlighted the fact that in one trial, the drug was 33% effective in heavily pretreated patients, and side effects were manageable.

“There is a high unmet need for treatments in this subtype of breast cancer because of the size of the overall breast cancer population and the aggressive nature of TNBC,” Dutta wrote.

Indeed, Analysts are expecting Trodelvy to eventually pull in $1.44 billion in annual sales.