A Dolon Institute Report
Addressing remaining unmet needs in rare diseases hinges on a positive and enduring policy environment which helps to achieve the necessary clinical and economic conditions for drug development in small, hard-to-treat populations. This white paper examines through historic case analysis the factors which make up those conditions and how these are shaped by policy to encourage (or deter) innovation.
Rare diseases continue to represent a significant unmet health need, with around 400 million people affected globally across approximately 10,000 rare diseases, the vast majority of which still have no approved treatment. At the same time, the past several decades have demonstrated that targeted policy interventions can fundamentally change the trajectory of innovation. The US Orphan Drug Act and European orphan medicines legislation have helped create the conditions for major advances in rare disease drug development, including transformative and potentially curative therapies.
Rare innovation: How it happens, when it doesn’t, and what can be done to sustain it explores why innovation occurs in some areas of unmet need but not others, and how policy can influence this. Prepared by Dolon for Alexion, AstraZeneca Rare Disease, the paper uses the biopharmaceutical innovation model alongside two case studies – antibiotics and orphan medicines – to examine how scientific, economic and policy factors interact to determine whether a new medicine is likely to be developed.
The paper identifies two fundamental conditions for innovation: clinical viability and economic viability. Clinical viability depends on the scientific understanding of a disease and the technological ability to diagnose and treat it. Economic viability reflects whether the potential return from developing a medicine is sufficient to compensate for the investment, time and risks involved. Industry investment decisions therefore consider factors including patient population, price potential, development costs, time to return and probability of clinical and commercial success.
Importantly, the paper demonstrates that policy sits across both dimensions. Policymakers can expand the opportunity for innovation through investment in basic and translational science, financial incentives, R&D tax credits, adapted regulatory and P&R pathways, and measures that improve the potential return on investment. Policy can therefore either strengthen the conditions for innovation or, if poorly designed, create additional barriers and reduce investment appetite.
The case studies illustrate this dynamic. The decline in antibiotic innovation shows how changing science, clinical practice and policy can progressively erode economic viability, even where significant unmet need remains. In rare diseases, meanwhile, the contrasting experiences of haemophilia and ring chromosome 20 syndrome demonstrate that incentives alone are not sufficient: where scientific understanding and diagnostic capabilities are lacking, a disease may not yet be clinically viable for development.
The paper concludes that sustaining rare disease innovation requires policy frameworks to evolve alongside science. Existing orphan incentives have played an important role in catalysing development and should not be weakened without understanding the long-term consequences. At the same time, emerging modalities such as cell and gene therapies may require new or adapted approaches to regulation, assessment and payment to ensure their economic viability.