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an ex-U.S. strategy.
Having lived and worked most of my life outside the U.S., I understand the hurdles a small company faces. In Europe, our top priority outside the U.S., regulators have tried to clear the path for orphan drugs. Products go through a “central process” for review by the European Medicines Agency (EMA) and are approved in 30 countries in one shot.
Regulatory approval is just the beginning, however. The process of setting a price and negotiating reimbursement starts afresh at each border. The product’s value proposition is critical to the success of reimbursement, and each country has individual criteria and timelines. How wisely the company sequences the markets on price and reimbursement has important consequences. If it accepts drastically lower prices in Portugal, Spain or Italy, it will soon confront parallel imports in Germany or France.
Such complexities aside, patients in Europe who suffer from rare diseases desperately need medicines, and many forces work in the drug companies’ favor. Target patient populations are limited in number, as are the physicians, groups, researchers and other key opinion leaders with specialized knowledge on which orphan drugmakers rely. Patient advocacy groups like EURODIS are very active in supporting rare-disease causes in Europe and help advocate for research and access to therapies. It doesn’t take a sales force of hundreds to reach these individuals. What’s required is expertise, and Europe boasts an abundance of executives with dual degrees in business and science.
Relevant academic networks are transparent and well supported. In February, the European Union committed roughly $187 million in new funding for 26 research projects aimed at rare diseases. This brings the EU’s tally for collaborative projects on such illnesses to 100 in just the last six years – efforts funded to the tune of $650 million.
There are peripheral benefits of a midsize biopharma company holding onto the helm in global strategy. Having an international organization helps your business development team identify underappreciated assets and spot opportunities for in-licensing, as well as making your company more attractive as a development and commercialization partner. A good example of this is Exton, PA-based ViroPharma (NASDAQ: VPHM), a biotech company with sales of $427 million in the U.S. and Europe that specializes in orphan diseases. Colin Broom, one of our board members, is Viropharma’s chief scientific officer.
Other orphan drug companies have scaled comparable hurdles, sometimes to stunning effect. Cheshire, CT-based Alexion Pharmaceuticals (NASDAQ: AXLN) is looking at more than $1 billion in worldwide sales of its blockbuster drug, eculizumab (Soliris), for a rare form of anemia. Investors have pushed up shares of San Rafael, CA-based BioMarin Pharmaceuticals (NASDAQ: BMRN), which is managing global development of pipeline products on its own, as well as a key drug, galsulfase (Naglazyme), a recombinant form of an enzyme to treat a rare condition.
As a newcomer to these ranks, I salute midsize pharma companies that take charge of their fate in global markets. At considerable risk, they succeed in doing well by their shareholders. What’s more, they’re laying the foundation for serving patients with no other access to medicines that may change their lives.
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