Modern technologies and standards are developing quickly, although humanity still suffers rare diseases that are hardly cured. This problem is caused by the weak accessibility of the population to sufficient medications and the small number of pharmaceutical companies that produce such drugs. World’s health organizations responsible for regulating this area work together to motivate the companies to develop and produce more affordable medicines for rare diseases called orphan drugs. The approval process is one of the most important steps in their successful spread among customers. This step depends on many factors, where the medications should be designated as an orphan through an appropriate indication procedure. Producers must prove that their product is designed strictly for specific serious or lethal diseases. In another case, such products are withdrawn from the manufacturing process and identified as inapplicable and unprofitable. The frequency of disease span determines the profitability of medicines through a certain population and the presence of efficient alternatives. For this reason, orphan drugs are thoroughly assessed and allowed to reach the markets. Orphan drug production companies are valuable for different markets because of their uniqueness, which creates stronger profitability.
The aspect of orphan drug production and its spread on the market requires detailed analysis and study conduct. Scientific research was undertaken to fully understand the problem of these medications’ manufacturing, utilization on the market, and profitability. This study aims to examine the financial performance of orphan drug organizations in Europe and the U.S. (Hughes, 2016). The research also aims to conclude whether their market value and profitability are more beneficial than non-orphan drugs ones (Hughes, 2016). The paper’s purpose involves the hypothesis that the companies based on orphan drug production are more valuable in terms of investment opportunities (Hughes, 2016). A series of challenges connected with financial and technological aspects must be overcome to successfully develop rare disease treatment and their accessibility for patients (Bouwman et al., 2019). Such an aim is justified as the high costs of orphan medication organizations possess high costs, and the generosity of their activity becomes questionable.
When discussing the healthcare system, its operation, and its benefits for the population, particular types of consumers should be emphasized. The research is conducted with stress on smaller target markets associated with rare diseases (Hughes, 2016). Also, European and American publicly listed orphan drug production markets are analyzed (Hughes, 2016). The market is small but counts 7000 severe diseases worldwide, with 30 million U.S. citizens suffering from rare illnesses (Evaluate Pharma, 2019). Adopting the disease treatment method by orphan drugs in America became successful and motivated other target markets to launch the companies’ activities. In 2000, the European Union followed the example and offered its key markets orphan medicines production (Evaluate Pharma, 2019). Currently, the number of rare disease patients in the U.S. and Europe is 200,000 people and 256,000 people, respectively (Evaluate Pharma, 2019). As a result, the research is focused on these two target markets and publicly listed approved companies that offer their product.
Conducting research requires collecting data from the population and creating a sample for analysis. The study outlines 181 companies in both markets, where the U.S. counts 135 establishments, Europe – 20, and both markets – 26 companies with authorization for orphan drugs (Hughes, 2016). The medications’ producers are also listed in the pharmaceutical and biotechnology sectors of the industry and are checked through orphan drug data (Hughes, 2016). The research chooses the best matching companies, depending on the propensity level in the selected countries (Hughes, 2016). These organizations initiated the units of rare diseases and found biotech partners in the sector (Hughes, 2016). The research reveals the number of companies in different markets that match with controls and meet the standards.
Thorough data research, analysis, and collection are important for strong study conduct. The authors of this work utilize databases from the internet, namely the Drug Analyst Database (Hughes, 2016). The information is also derived from the U.S. Food and Drug Administration’s database of Orphan Drug Products and the European Medicines Agency database (Hughes, 2016). The data on finances and drug sales of the companies is presented from Data-stream annual accounts (Hughes, 2016). To collect and analyze data, the researchers use financial explanatory variables to estimate their performance and correlation (Hughes, 2016). They obtain the valuation of the performance model and battle its issues by applying the system’s General Method of Moments (Hughes, 2016). The researchers measure the autocorrelation to reveal bias and conduct specific sensitivity assessments (Hughes, 2016). The findings are reported through the results statement, where a positive relationship between sold drugs and the performance of companies is indicated (Hughes, 2016). The application of analysis and alternative specification of the variables helped to ensure strong and robust findings (Hughes, 2016). All of the manipulations are helpful in conclusions providing and interpreted information delivery.
The research is mostly focused on the performance of orphan drug manufacturing companies. For this reason, no information on consumers’ buying behavior is presented in this paper. Nevertheless, it is worth stating that the studies on orphan medical products spread to reveal the healthcare consumers purchasing characteristics. As the price of this specific medication is extremely high, a smaller number of people can afford it (Pierzynowska et al., 2020). Companies’ performance improvement does not greatly affect buying behavior, as many rare diseases concern a small number of patients and low purchase rates (Pierzynowska et al., 2020). There are hypotheses that the problem of weak purchase behavior can be solved by producing orphan medications that treat many serious diseases (Pierzynowska et al., 2020). Conclusively, the research omits consumer buying characteristics, as this topic needs separate analysis.
Conducting this study concerns the performance of orphan drug companies. It motivates organizations to analyze their financial performance and profitability level and consider the quality of their product. Improving companies’ financial efficiency through research can positively impact growing benefits in terms of the quality of treatment (Blonda et al., 2021). Restructuring orphan medication production companies in their financial area can change product pricing, which will make the drugs more accessible. Such a situation may raise the life quality for many people with rare diseases. On the other hand, the quality of medical products should remain high and be protected from mass marketing consequences impact. The study helps to understand how this specific healthcare industry area must balance financial performance and market value to satisfy its customers and keep profitability.
Conclusively, the research aims are gained through the analysis and evaluation of orphan drug companies. The study states that the financial performance of these companies in the U.S. and Europe is more enhanced than that of non-orphan medical product organizations. Market value and profitability are also indicated as strengths of these types of medication producers. The researchers assess various databases to derive important information on drug sales in different target markets. The study does not provide information on consumers buying behavior, as it touches only on areas of companies’ performance on the market. Such researches are crucial for the population because they stimulate improving medical services quality in the healthcare industry.
References
Blonda, A., Denier, Y., Huys, I., & Simoens, S. (2021). How to value orphan drugs? A review of European value assessment frameworks. Frontiers Pharmacology, 12. Web.
Bouwman, M., José, J., Sousa, S., Pina, M., & Pina, T. (2019). Regulatory issues for orphan medicines: A review. Health Policy and Technology, 9. Web.
Evaluate Pharma (2019). Orphan drug report 2019 (6th ed.). Evaluate Ltd. Web.
Hughes, D.A. & Hughes, J.P. (2016). Profitability and market value of orphan drug companies: A retrospective, propensity-matched case-control study. Plos One, 11. Web.
Pierzynowska, K., Kamińska, T., & Węgrzyn, G. (2020). One drug to treat many diseases: unlocking the economic trap of rare diseases. Metabolic brain disease, 35(8), 1237–1240. Web.