Orphan Drug Market Development And Manufacturing Of Products

1622 WordsMar 22, 20177 Pages
Sanofi Genzyme is a branch of the Sanofi Corporation that specializes in the development and manufacturing of products to treat a variety of rare diseases. The Allston Landing Facility (ALF) currently produces a single enzyme replacement therapy which treats patients with Type 1 Gaucher disease. This treatment falls within the classification of an Orphan drug which is a drug or biologic that treats a patient population of less than 200,000 within the United States. There is an entire segment of the pharmaceutical industry comprised of companies that develop and manufacture treatments for rare diseases. The Orphan Drug market has a projected Worldwide 2020 sales forecast $178bn with a compound annual growth rate (CAGR) of 11.7% per…show more content…
In addition, once a patient begins a treatment that improves their condition there is a low likelihood that the patient will stop that treatment. Also, the low success rate of drugs from development through FDA approval decreases the chance that a competitor will develop an alternative treatment. The bargaining power of the customers within the Orphan Drug patient population is classified as medium/low. While patients are price sensitive; the cost of treatment for most is subsidized by either health insurance or government funding and therefore the price of these treatments are typically very high. The average per patient on an orphan drug in the year of 2014 was calculated to be over $110,0001. While the average cost is currently high, this has become and increased area of scrutiny worldwide and many governments are enacting price control within the industry, eating away at potential profits. Once a company has successfully developed an orphan drug and gained FDA approval, the process to build and operate a manufacturing facility can be extremely costly. This is driven by the fact that the bargaining power of the supplies is medium/high. This classification is because of the extreme regulations that exist for not only the equipment, but also the raw materials used within the drug manufacturing process. The environment causes companies to create stringent supplier

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