Orphan diseases are diseases or conditions that affect an extremely small number of individuals as compared to the general population. In the U.S., a therapeutic that treats a disease with a prevalence of 200,000 or less is referred to as an Orphan drug, while in the EU the threshold for receiving an Orphan designation is aimed at diseases that affect fewer than one in 2,000 people.
Over the past several years, the regulatory environment in both the U.S. and EU has been relatively favorable. The rare disease space, in particular, has grown significantly with regard to the number of (1) Orphan drug designations issued by the FDA, (2) new drugs in active clinical development, and (3) approved drugs. Since the start of the decade, the pricing environment has also been largely favorable, which has enabled companies to achieve premium pricing for their Orphan drug portfolio.
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