Ethics and Economics Intertwine for Firms Developing Orphan Drugs

For biopharmaceutical firms developing treatments for rare diseases, economic incentives are rarely the only reason to begin developing orphan drugs.

Economic incentives comprise only part of the reason biopharmaceutical firms enter orphan drug development, the results of a study appearing in the September 2013 issue of Journal of Business Ethics suggest.

In addition to the economic incentives provided by legislation, most executives stressed technologic advances and the potential for business opportunities as reasons to enter the orphan drug field. They also stressed the ethical ties needed to successfully do business in the orphan disease arena.

“Besides economic responsibility, the majority of biopharmaceutical companies that we interviewed made it clear that to successfully do business in rare diseases, a company needs to address ethical responsibilities,” the authors wrote. “Because of the specific economics of orphan drugs … companies have to interact directly with pharmacists, doctors, and patients. Because of this personal interaction, they express a greater sense of moral responsibility.”

The researchers examined drivers for corporate social responsibility toward developing orphan drugs, as well as the extent to which US and European pharmaceutical companies use corporate social responsibility resources toward that type of drug development.

The researchers used 2 study methods to gauge corporate responsibility in orphan drug development. First, they interviewed US and European executives from biopharmaceutical companies developing treatments for orphan diseases and analyzed publicly available content related to orphan drugs and corporate social responsibility. The research occurred over a 2-year period, with researchers interviewing 20 executives from 5 US and 4 European biopharmaceutical firms.

Next, they analyzed 100 company websites and online communication channels with information on the company’s strategic mission, corporate social responsibility activities, and communication patterns.

The research found 3 main forces contributing to orphan drug development for biopharmaceutical firms, including the business opportunities and growth within the rare disease sector, ability to avoid competition because of noncompetition clauses within orphan drug development legislation, and the chance that breakthrough orphan disease treatments may also be applied to more common diseases.

In addition, the interviews determined that orphan drug development legislation is not a sole driver for drug development. Although the legislation makes orphan drug development more attractive financially, executives tended to state that the legislation helped justify the ethical impetus to develop rare disease treatments, the researchers noted.

“Despite sometimes polarized motives explaining biopharmaceutical firms’ involvement in orphan drug development, all of the firms that we interviewed stressed that economic, legal, and ethical motives are usually intertwined, and none of them taken separately is typically sufficient alone to motivate orphan drug development,” they wrote.

Analysis of company websites determined that 50% of companies mention the orphan drugs they market and orphan drug designations on pipeline products, 30% mention orphan drugs in vision or mission statements, and 23% explicitly state their involvement in orphan drug development as part of corporate social responsibility.

The researchers noted a particular difference in corporate social responsibility communication between small and medium-sized biopharmaceutical companies and larger firms. Only 26% of small and medium-sized companies referenced their corporate social responsibility on their websites compared with 79% of large companies.