Hit by patent expiries, dry pipelines and strict approval guidelines, many players in the pharmaceutical industry is focusing more on ‘niche busters’ than blockbusters, according to a new report.

The analysis, published by Frost & Sullivan, looks at “the evolution of a paradigm shift in the industry: orphan drugs”, noting that in five years, some $90.00 billion worth of branded drugs will lose their exclusivity. As such, pharmaceutical companies are moving to a new business model, which consultant Shabeer Hussain calls niche busters.

This model will provide an approach to “an integrated healthcare solution”, says the report, enabling drugmakers to develop “newer areas of therapeutics, diagnosis, treatment, monitoring and patient support”. It argues that clinical trials for orphan drugs “are run efficiently with smaller patient groups, thereby reducing costs significantly”, while incentives to go down this route are offered by governments and regulators alike.

The F&S study also notes that while the focus on niche busters grows, “the safety regulations and approval processes will become stricter, putting larger companies in a better position to cope with the increasing demands”. However, though smaller companies will struggle to compete with the more powerful competitors in the industry, Mr Hussain believes there will “still be assurance for niche players with specialist therapies, technologies, unique capabilities and expertise”.

Given the challenges ahead for the sector, orphan drugs “seem to offer the key to recovery and stability within the market”, says the report, arguing that “the crucial focus is maintaining unique desirability within smaller collaborations, while emphasising competitive strategy and vigour”.