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The orphan drugs market size was valued at USD 156.97 billion in 2022 and is projected to grow from USD 170.49 billion in 2023 to USD 368.43 billion by 2030, exhibiting a CAGR of 11.6% during 2023-2030. North America dominated the global market with a share of 53.88% in 2022.
Orphan drugs are developed by the pharmaceutical industry for economic reasons but respond to the public health needs. These drugs are developed to treat patients suffering from serious diseases for which no treatment, or at least a satisfactory one, has so far been available. For instance, an article published by the Orphanet in 2023 stated that the number of rare diseases for which no treatment is currently available is estimated to be between 4,000 and 5,000 globally. Moreover, 25 to 30 million people are reported to be affected by these rare diseases in Europe.
According to the European Organization for Rare Diseases, orphan drugs are produced for diagnosis, prevention, and treatment of rare disorders. The oncology therapy area holds a considerably higher share in the global market due to emergence of new cancer-related diseases. Additionally, FDA approvals to a series of cancer-related orphan drugs are expected to result in increased commercialization of these drugs, especially in the oncology therapy area, during the forecast period. The market will derive growth from higher demand for immunomodulators, as they regularize or amplify the immune system. Rising prevalence of infectious diseases in developed as well as emerging nations and higher prices of medications are projected to fuel the demand for immunomodulators, thus contributing to the global orphan drugs market growth during the forecast period.
The increase in Regulatory Approvals During COVID-19 Pandemic Impacted the Market Growth Positively
The impact of the COVID-19 pandemic on certain markets in the pharmaceutical industry was more pronounced due to the postponement of the diagnosis and treatment of non-life-threatening diseases. This was especially true for individuals suffering from rare diseases as more financial and healthcare resources by various governments were directed toward fighting the pandemic.
However, as per RwHealth article published in 2023, despite the challenges compounded by the COVID-19 pandemic while conducting clinical research in orphan diseases, the average number of applications seeking permission for marketing of orphan medicinal products sent to the European Medicine Agency (EMA) during COVID-19, i.e., 2020 – 2021, were higher as compared to the pre-pandemic period.
In 2021, the growth of the market continued primarily due to resumption in research and development activities of market players.
This growth is expected to be continued during forecast period, owing to launches of various pipeline candidates for various indications by key players. Such trends indicate that the market is poised for steady growth during the forecast period.
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Strong Product Launches to Drive Market Growth
Globally, patients suffering from rare diseases are seeking efficient and potent treatment for these disorders. Increasing R&D initiatives and rising advocacy by patients’ groups for effective treatment are propelling the introduction of newer and more effective product offerings. These trends have led to the development and marketing of several blockbuster drugs for the treatment of many types of cancers, immunological diseases, and other rare disorders.
Increasing R&D Initiatives to Drive Market Growth
One of the critical driving factors prevailing in the global market is the increasing R&D investments by prominent players for the development of novel products. Since the awareness and understanding regarding rare diseases has increased, a number of key clinical stage biopharmaceutical companies and established market players are creating strong pipeline candidates for orphan drugs in various stages of clinical trials. This increasing foray into rare disorder therapeutics is due to the reason that major pharmaceutical breakthroughs resulting in the development of blockbuster drugs are quite possible in rare disorders in comparison to the traditional pharmaceutical portfolios.
Another strong driver for this is that pharmaceutical companies are required to conduct larger outcome studies for the regulatory approvals of traditional therapeutics for diseases, such as diabetes and Coronary Artery Disease (CAD) in comparison to rare diseases. This factor is projected to propel the market growth during the forecast period.
Growing Patient Population with Rare Diseases is Propelling Market Development
Strong research and development initiatives for rare disease therapeutics are expected to have a significant positive impact on the global market. According to an article published by Euronews in 2023, there are 5,000 to 8,000 rare diseases in Europe and affects the daily life of almost 30 million people in the region and 300 million across the world. This has created a sizable patient population who have significantly unmet clinical needs, which are extremely serious in nature. Hence, growing investment in R&D and increasing involvement of major and emerging market players in the development of sophisticated and effective products are expected to boost the market growth.
High Cost Associated with Orphan Drugs to Limit their Adoption
Despite the increasing focus on the development and marketing of rare disease therapeutics globally, certain limitations are restricting the global market growth. One of the critical restraining factors is the high costs associated with these drugs.
Such high cost of treatments has significantly limited the adoption of these products, especially in emerging countries. Such high costs are also a cause of concern for the developed countries where many of the drugs may not be adequately reimbursed, thus significantly increasing a patient’s out-of-pocket costs.
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Oncology Segment to Dominate due to Robust Regulatory Drug Approvals
On the basis of therapy area, the market is classified into oncology, hematology, neurology, endocrinology, cardiovascular, respiratory, immunotherapy, infectious diseases, and others.
The oncology segment held a dominant orphan drugs market share in 2022. The dominance is due to the presence of several oncology drugs in the product development pipelines of key players and presence of a large number of orphan drugs dedicated to the treatment of various cancers. For instance, in February 2022, CTI BioPharma received the U.S. FDA approval for its drug Pacritinib for the treatment of adult patients with myelofibrosis, a rare bone cancer affecting over 21,000 patients in the U.S.
The hematology segment is projected to be the second most dominant segment owing to a number of new product launches and increasing number of regulatory approvals. The neurology segment is also anticipated to register a comparatively strong CAGR due to positive developments in the product offerings for chronic diseases, such as multiple sclerosis.
However, the endocrinology, respiratory, and cardiovascular segments are anticipated to register lower CAGRs during the forecast period. The immunotherapy segment is expected to register a strong CAGR due to the presence of reliable products, such as Keytruda, and also increased research initiatives.
Biologics Segment Dominated Due to Strong Product Offerings
Based on drug type, the market is segmented into biologics and non-biologics.
The biologics segment dominated the global market share in 2022 due to the overwhelming presence of product offerings classified as biologics. According to an estimate by the U.S. Food and Drug Administration (FDA), the Office of Orphan Products Development (OOPD) of the organization has developed and marketed over 600 drugs and biologic products to treat rare disorders since 1983. The non-biologics segment accounted for a lower share of the global market and also registered a comparatively low CAGR.
High Accessibility toward Hospital Pharmacies Led to Segment Dominance
On the basis of distribution channel, the market is segmented into hospital pharmacy, retail pharmacy, online pharmacy, and others.
The hospital pharmacy segment is expected to hold the largest market share during the forecast period. The primary reason behind the segment’s dominance is that a significantly large number of drugs have to be administered at hospitals intravenously by trained healthcare professionals. The retail pharmacy segment is expected to register a comparatively lower CAGR during the forecast period.
The online pharmacy segment is expected to register a high CAGR due to the ease given to consumers while buying drugs. Also, during the COVID-19 pandemic, online pharmacies registered strong growth due to the increasing number of consumers switching to online pharmacies to purchase these drugs.
North America Orphan Drugs Market Size, 2022 (USD billion)
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In terms of region, the global market is segmented into North America, Europe, Asia Pacific, and the Rest of the World.
In North America, the market size stood at USD 84.59 billion in 2022. The dominance of North America is attributed to the significant expenditure on orphan drugs, strong patient population, and presence of key market players leading to the development of sophisticated and innovative products. For instance, according to the Genetic and Rare Diseases (GARD) Information Center, there are more than 10,000 known rare diseases in the U.S. that affect about 1 in 10 people or 30 million people in the U.S. This factor, coupled with the presence of favorable reimbursement policies in the U.S., is responsible for North America’s dominance in the global market.
The Europe market is anticipated to register a strong CAGR owing to the rising patient population in the region and strong adoption of sophisticated rare disease therapeutics. The market in Asia Pacific is expected to register the highest growth owing to the increasing healthcare expenditure and high awareness of rare diseases. The rest of the world comprises Latin America and the Middle East & Africa, which accounted for a lower share of the global market owing to the under penetration of these medicines in the regions.
Strong Portfolio of Bristol-Myers Squibb Company and F. Hoffmann-La Roche Ltd. to Drive Market Growth
The market is highly competitive in nature, owing to the presence of a large number of key market players and their diverse product development pipelines. Currently, Bristol-Myers Squibb Company and F. Hoffmann La Roche Ltd. are dominating the market, accounting for a significant share of the global market in 2022. This is primarily due to the strong sales and product portfolios of oncology-related drugs of these companies.
However, several key players, such as Biogen Inc. and BioMarin Pharmaceutical Inc., with their innovative product pipelines for various rare diseases, are emerging in this industry. Other prominent players include Amgen, Alexion, Novartis, AstraZeneca, DAIICHI SANKYO COMPANY LIMITED, and Agios Pharmaceuticals who also have a significant presence in the global market of novel drugs.
An Infographic Representation of Orphan Drugs Market
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The global research report provides a detailed analysis of the market and focuses on key aspects such as prevalence of major rare diseases in key countries, pipeline review of novel drugs, technological developments, and healthcare spending by key countries in 2019. Besides this, the report offers insights into the latest market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the market in recent years.
CAGR of 11.6% from 2023 to 2030
Value (USD billion)
By Therapy Type, Drug Type, Distribution Channel, and Region
By Therapy Type
By Drug Type
By Distribution Channel
Fortune Business Insights says that the global market size was USD 156.97 billion in 2022 and is projected to reach USD 368.43 billion by 2030.
In 2022, the North America market stood at USD 84.59 billion.
Recording a CAGR of 11.6%, the market will exhibit steady growth during the forecast period of 2023-2030.
The oncology segment is expected to be the leading segment in this market during the forecast period.
Rising prevalence of rare diseases and increasing R&D of orphan drugs by market players are major factors driving the growth of the market.
Bristol-Myers Squibb Company and F. Hoffmann-La Roche Ltd. are major players of the global market.
North America region dominated the market in 2022.
Launch of advanced product offerings by prominent market players, increasing R&D initiatives, and increased awareness of rare diseases are expected to drive the adoption of orphan drugs in the global market.
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