Medications that treat rare diseases are generally not profitable for drug companies to develop because there is not a large market of patients who will use them. Without medications, many rare diseases would go untreated.
The US Food and Drug Administration has an Office of Orphan Products Development that offers incentives for sponsors to develop products for rare diseases. Since 1983, over 600 drugs and biological products have been developed and marketed through this program. Orphan designation can apply to drugs, diagnostic agents, and medical devices. It applies to treatments intended for conditions that affect less than 200,000 people, or for treatments that are not expected to recoup the cost of development and marketing.
When a drug and the condition it treats meet certain criteria the drug can be designated as an orphan drug and the sponsor can receive incentives like tax credits, grants, and a waiver of application fees that are normally applied to other drugs.
To have a product designated as an orphan drug, the sponsor must submit enough information to establish a plausible basis to expect the drug to be effective for the rare disease it will be used to treat.
Some diseases that are considered rare in the United States, and that lack treatment options include Huntington’s disease, Tourette’s syndrome, ALS (Lou Gehrig’s disease), and muscular dystrophy.
Despite financial incentives, orphan drugs that come to market are often very expensive. One recent example is Spinraza, a medication to treat spinal muscular atrophy. This drug costs about $750,000 for the first year of treatment and $375,000 annually after that, making it one of the most expensive medications in the world.
For more information about the Orphan Drug program click here