Getting FDA approval on a brand name for vandetanib, AstraZeneca’s very first orphan drug, isn’t the only challenge the company has faced during launch. The size of the patient population eligible for Caprelsa is decidedly small, but ultimately fuzzy. “We don’t really know how many patients there are at any given time,” says Eric Vogel, executive director of oncology, at AstraZeneca. “In some reports its 1,000 [in the US], and the FDA thinks it may be 2,000 to 2,500.” Compounding the difficulties presented by a tiny patient population, relatively speaking, is the fact that not all medullary thyroid cancer patients would benefit from Caprelsa; the drug is indicated only for patients whose cancer “has progressed to the point where surgery is no longer an option.”

Vogel says the company is “learning as we go” during the launch. “We believe that roughly half of the patient population will end up in the major treatment centers around the country, but that the other half may or may not continue to be followed by the community endocrinologist or medical oncologist,” says Vogel. Traditional market research hasn’t uncovered a network of physicians treating medullary thyroid cancer, since Caprelsa represents the first pharmaceutical treatment option for those patients, says Vogel. “There are some things that we can do to find physicians that look like they might be treating [medullary thyroid cancer], but it’s an inexact science at this point.”

AstraZeneca signed an exclusive distribution deal with Biologics, an oncology management company and specialty pharmacy, last April. Biologics also distributes AstraZeneca’s Arimidex, as well as Novartis’ Afinitor, Gleevec and Tasigna, Bayer/Onyx’s Nexavar, Celgene’s Revlimid, BMS/Otsuka’s Sprycel, Pfizer’s Stutent, Merck’s Zolinza, Roche/Genentech’s Xeloda and others, according to an “in stock” list on the company’s website. The decision to partner with Biologics for distribution had to do with the size of the patient population, and the amount of support that patients using Caprelsa would need, says Vogel. “We’re pleased with the relationship. [Biologics] spends 45 minutes, on average, with each patient, according to the reports we get from them,” Vogel says. Biologics, for its part, provided a team of 10 nurse liaisons tasked with educating physicians about the drug, and easing the administrative burden on the physician’s practice, Dan Duffy, executive VP and general manager, oncology pharmacy services group, told PharmExec.

In addition to Biologics’ nurse liaisons, AstraZeneca has deployed “regional scientific managers” – physician and/or nurse-facing individuals, to “communicate to our HCP audience about risks associated with Caprelsa, the REMS programs and all of the precautions, as well as any questions they might have around the efficacy or safety of the product,” says Vogel. The REMS program has helped AstraZeneca identify customers, since physicians have to become certified through REMS before prescribing the drug. “Down the road, we may broaden our reach out to community oncologists, those who we’re already calling on with our sales forces for Faslodex,” says Vogel.

The company hopes new indications will be forthcoming, and is currently looking to Europe for the next Caprelsa launch. Laura Woodin, senior manager, corporate affairs, said in an email that Caprelsa is being evaluated in “more than 40 early-stage studies” and various tumor types, including pancreatic, glioblastoma (brain), biliary tract (liver duct), as well as two other forms of thyroid cancer, papillary and follicular. “We’re trying to take our learnings from the US and apply those to other markets,” says Vogel. In terms of a possible launch in the EU, Vogel says the patient population size across Europe is roughly the same as the US patient size, but right now, “it’s not efficient to commercialize [Caprelsa] country by country.” “We will commercialize it country by country as we get new indications, but we have to look at it more broadly by much larger markets” for now, says Vogel.

Caprelsa is currently under review with the European Medicines Agency (EMA) and Health Canada, according to Woodin.

“As a society, as we’re having this big debate around healthcare, everyone agrees that there’s a certain baseline of people that we have to take care of,” says Craig Kephart (pictured right), president and CEO of Centric Health Resources, a direct-distribution company focused on specialty pharma and orphan diseases. “And I put people with rare and pediatric orphan diseases in that bucket. Their condition isn’t based on a health or lifestyle choice—they just lost the genetic lottery.”

According to the National Organization for Rare Disorders (NORD), of the nearly one in 10 Americans with rare diseases (those diseases affecting under 200,000 patients in the US), approximately two-thirds are children. “Many of these rare pediatric diseases are very serious and treatments are desperately needed,” said NORD president and CEO Peter L. Saltonstall in a statement. But, until recently, those desperately needed treatments weren’t exactly on the radar for Big Pharma.

For some orphan diseases, the marketplace may be only 500 or 1,000 patients, so pharma’s opportunity to recoup its investment in bringing a drug to market is very limited, resulting in the need to charge a very significant amount of money for the therapy. Historically, what this has meant for the orphan disease population—especially for diseases that affect less that 6,000 patients, which Kephart calls ultra-orphan diseases—is that pharma never bothered to research possible treatments because the prospective ROI just wasn’t there; or perhaps even worse, a drug did reach patients but was priced unreasonably high to compensate.

“Right now we seem to be going through this foolish-thinking phase where the knee-jerk reaction by managed care is to raise the patients’ financial burden, saying ‘Oh, we’ll cover the drug, but we’re going to make it a Tier 4.’ So the patient will have a much higher out-of-pocket expense,” adds Kephart. “When you look at the impact of these types of rare and neglected diseases, not only are they personally catastrophic for the families and patients affected; they can also be economically devastating.”

However, new science, new laws, and new interest from Big Pharma may point to a light at the end of the tunnel, says Kephart. “We are seeing a tremendous focus—all in the past few years—on these ultra-orphan diseases,” he says. “There are a couple of driving factors behind this shift. One of them is certainly all the talk about patent cliffs, the lack of blockbuster drugs, and the R&D pipeline not being as strong as it once was. Pharma companies are naturally looking for new places to grow—and if there aren’t any more big markets to grow in, you have to grow in a bunch of smaller markets.”

Although the changing landscape of Big Pharma has played a part in putting ultra-orphan and rare pediatric diseases back on the map, much of the credit should go to developments in science, particularly in genomics. Kephart says that often, scientists and pharma companies tell him that these rare diseases are easier to crack, because they tend to be isolated to one specific genetic defect or one section of the gene that’s got a mutation, so they can more easily try to create therapies for it.

In the interest of trying to get Big Pharma to put all this newfound scientific and technological insight to good use, US Senator Bob Casey (D—PA) introduced in March the Creating Hope Act of 2011—a bipartisan bill that would encourage the development of new treatments for rare and neglected diseases that disproportionately affect children. But where’s the incentive?

Essentially, the law tells pharma companies that if they focus on a rare or neglected childhood disease and try to bring a drug to market there, they’ll get a voucher for one of their other non-rare drugs to qualify for expedited review through the FDA—thus cutting up to five months off the review process.

So by working on ultra-orphan drugs under this new law (which has not passed yet), a pharma company could then significantly decrease the time to market for one of its other, bigger money-makers. “The idea here is that if you cut four or five months off your review time and get your drug to market sooner, that’s four or five months of revenue that you weren’t counting on,” says Kephart. “That’s just good economic sense.”

In order for treatments for these ultra-orphan diseases to come to market and be accessible to the patient, all the planets need to align perfectly. Pharma needs to be interested; the clinical trials and other R&D costs need to be recouped; investors need to see a strong potential for ROI down the line; and value needs to be evident in more than just (millions of) dollars and cents.

“This is one thing I talk about often to companies and potential clients—they need to focus on the value equation,” explains Kephart. “If your drug is just sort of a nice-to-have convenience, then patients and payers aren’t going to value it. You need to start looking early on, to collect the outcomes that prove your product is making a difference. You need to consider other measures beyond cost—is your drug keeping people out of the hospital, or do the results of taking this drug allow people to go back to work?”

To succeed going forward in this new, leaner, more competitive climate, says Kephart, “Those are the things I think pharma companies have to get used to focusing on, and they’re going to have to make that a part of the deal.”

To expedite distribution, and to make sure educational initiatives – under  Risk Evaluation and Mitigation Strategies (REMS) requirements, and otherwise – are being met, AstraZeneca signed a deal with Biologics, an oncology management company, to distribute vandetanib exclusively through Biologics’ specialty pharmacy. Financial terms of the deal were not disclosed.

Approved in the US on April 6, vandetanib is an orphan drug indicated for the treatment of medullary thyroid cancer that can’t be removed by surgery, or that has spread to other parts of the body. In the US, somewhere between 500 and 1,000 patients, approximately, have this rare form of cancer, according to Dan Duffy, executive VP and general manager, oncology pharmacy services group, at Biologics. FDA puts the number at 1,300 to 2,200 in 2010, according to a release.

Biologics is tasked with managing vandetanib’s REMS requirements (only REMS-certified pharmacists are allowed to dispense the drug) in addition to working with payers and consolidating referral sources. Ten nurse liaisons are “going out to educate the physician and clinical staff about program specifics, how to make it efficient for them, and to ease the administrative burden for the physician,” said Duffy. For patients, the company expedites available copay assistance, with a focus on rapid turn-around times. Without insurance, a 30-day supply of 300 mg vandetanib, taken once daily, costs $10,454.00, according to an employee in Biologics specialty pharmacy. Patients without insurance may be elligible to recieve the drug at no cost, through AstraZeneca’s prescription savings program, according to Laura Woodin, a spokesperson at AstraZeneca. In clinical trials, vandetanib was “shown to affect the electrical activity of the heart, which in some cases can cause irregular heart beats that could lead to death,” hence the REMS, said FDA, in the release.

Woodin said in an email that the company’s exclusive distribution arrangement with Biologics is “a new approach for our US business…vandetanib is also the first treatment that AstraZeneca has developed and brought to market under orphan drug designation in the US.” Woodin said the small patient population for vandetanib was a major factor in signing the exclusive distribution deal. Duffy said the agreement lets AstraZenca “standardize the distribution channel and really control it.”

Vandetanib doesn’t currently have a brand name; AstraZeneca requested Zactima, but FDA did not accept that name, said Woodin. The company is currently in talks with FDA about a new name.

But now that the bubble has burst, pharma can expect what Russell predicted a decade ago: a more competitive industry, with greater focus on pharmacoeconomic data, ROI, and less tolerance for me-too drugs. “The economic miracle is over—there will be a struggle to survive in this industry,” he says.

Russell, a speaker at the Reuters healthcare conference today, breakfasted with Pharm Exec at the W Hotel, and offered a preview before tomorrow’s main event, the business update for its Human Genetic Therapies (HGT) business. The meeting will take place in HGT’s new Lexington, MA, headquarters, and with more than 1,000 employees (up from 300 in 2005), it will also provide a visual reminder of how this business is a growth engine for Shire.

Over the last three years, this specialty pharma company has grown and diversified both its product portfolio and geographic reach. A few years back, Adderall XR accounted for the lion’s share of Shire’s sales. But recently announced Q3 earnings show that the company has succeeded in bringing along its newest drugs—and for the first time, new product sales exceeded those of Adderall XR (and not a moment too soon, as generic Adderall arrives on the market in just six months). With almost two dozen potential launches planned for 2008-2015, Russell says the company is in “the best shape it’s ever been.” He attributes this to strong IP (even for its next-stage ADHD drug Vyvanse), a heavy focus on orphan drugs, and Shire’s litany of productive deals including Jerini.

On Tuesday, Russell will address HGT and outline Shire’s seven-year plan. (“Five years was too short, 10 too long,” says Russell.) It includes expansion into China and  a reorganization along patient lines; drugs for diseases that serve more than 50,000 patients will fall under specialty pharma head Mike Cola; smaller drugs will fit within Shire HGT, presided over by Sylvie Grégoire. Russell says this paradigm best capitalizes on the different commercialization models, enabling smaller orphan drugs to fully leverage the “advocacy-based selling model.”

But it’s not all roses for Shire. In the short-term, the company will experience a dip in sales in 2009, and possibly 2010, as it fully transitions away from Adderall XR. Perhaps a bigger issue is the biogenerics bill that’s shaping up among legislators. Russell plans to visit Washington, DC, several times over the next few months to conduct what he characterizes as much-needed education on the interaction between intellectual property and biosimilars. Right now, small molecules have 20 years of patent life, but biologics only have seven. “Without 12 or 14 years of exclusivity, it just might not warrant the investment,” says Russell. “You see the reaction when I tell people that—their eyes light up and you can tell they are beginning to understand.”

“Language is very important, and you have to understand how it affects perception,” says Maria Hardin, vice president of patient services for NORD (National Organization for Rare Diseases). “You have to think of the 30 million patients with rare diseases as a whole. We don’t want to salami slice it any more than we already have.”

Hardin presented today at CBI’s Pre-Approval Access conference, here at the Hilton Baltimore, and said she is concerned that classifying some drugs as “ultra-orphan” and others just “orphan” will artificially divide services and access to life-saving drugs. “We refuse to use that word,” she says.

Instead, says Hardin, the word “ultra-orphan” has been put into play by pharma companies that specialize in treating rare diseases. But sources say that this sub-classification has at least one utilitarian purpose.

“How do you explain to a regulatory agency that your trial only has 30 patients in it–and half of those are on placebo control?” asks Mark DeRosch, senior director of regulatory affairs for Vertex Pharmaceuticals. DeRosch plays a part in the development of the company’s promising cystic fibrosis candidate, VX-770.