Parthenon Research
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Aegerion And The Orphan Drug Paradox

Once Scorned, Orphan Diseases Have Become Popular

Companies developing drugs for Orphan Disease have emerged as a specialty group within the Biotechnology industry. These companies are using provisions of the 1984 Orphan Drug Legislation that provide FDA assistance, financial and tax incentives, and favorable reimbursement. During the first 15 years after the legislation, Orphan Drug approvals increased attention to rare diseases and led to a few successful product introductions. There have been some outstanding successes, leading more companies to focus on orphan drugs. However, we believe this overlooks the difficulties involved in rare diseases.

The business model for an Orphan Drug company was largely pioneered by Genzyme in 1990s, which demonstrated that rare diseases could lead to profitable products. At...

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