How The Orphan Drug Act Opened the Door for Rare Disease Research


Drug research and development is a complicated process that the average person has little influence over and rarely thinks about. This is not the case for rare disease patients. Thoughts about how drugs are developed and why this process is so expensive are sure to come up more often for those affected by a rare disease. It can be a source of frustration since many pharmaceutical companies are reluctant to develop treatments for a rare disease.

Pharmaceutical companies are limited to developing drugs that will pay off the expensive research and development process. With the average cost of drug development estimated at 2.7 billion dollars, this process is astronomically expensive (1). Phases of drug development include research, preclinical testing of the drug in a laboratory, clinical trials on humans, a review by the FDA, and safety monitoring of the drug once it hits market (5). All of these steps contribute to the cost of drug development.

These companies have to meet a bottom line and fewer people with a disease means less product will be sold when the drug is eventually developed. Still, drug prices are highly inflated even after development costs are accounted for. The top five pharmaceutical companies are estimated to have a profit margin of 20% or more. This 20% quickly adds up to enormous profits for these companies.

There are countless reasons to develop treatments for rare diseases beyond economic profit. Up to 30 million people in the United States alone have a rare disease. If they were all left untreated it would be an enormous disservice to a large community.

Researching a rare disease can result in unexpected medical discoveries that have far larger impacts than originally anticipated. There are countless stories where a drug being developed for one purpose ended up having multiple applications. Just one of many examples is the drug Gabapentin which was originally developed as a treatment for epilepsy but was later found to be very effective in treating pain (2). Since rare diseases may affect unstudied biological mechanisms, rare disease research has the potential to give us new information about human health that can also be applied to more prevalent disorders or preventative medicine. Studying rare diseases is valuable for reasons beyond the most obvious ones.

In 1982, the National Organization for Rare Disorders (NORD), a group that advocates for the funding and research of rare diseases, began lobbying for legislative changes to make developing drugs for rare disease an easier process. A year later, the Orphan Drug Act was passed. This has had a transformative effect on progress towards rare disease treatments. Before the Orphan Drug Act was passed, only 38 orphan drugs were approved in the United States. There are now over 400 and this number continues to grow (3). This legislation has led to the creation of treatments for multiple sclerosis, multiple rare cancers, narcolepsy, and more.

The legislation works by offering a number of financial incentives to a company developing an orphan drug. These incentives include an ability to market the treatment exclusively for 7 years, a 50% tax credit on research and development costs, and grants for clinical trials (3). Using the Orphan Disease Act as an example, Japan passed similar legislation in 1993, as did the European Union in 2000 (3).

Though this legislation gives rare disease patients a much higher chance of their disease being studied and a treatment being developed, the system is still not perfect. Treatments are sometimes prohibitively expensive to rare disease patients while pharmaceutical companies receive large financial gains.

The price of a drug called Soliris perfectly illustrates this inflation. Soliris treats two rare diseases called paroxysmal nocturnal hemoglobinuria and atypical haemolytic uremic syndrome. In some places, it costs patients up to 700,000 dollars a year. This had led to extreme controversy in the healthcare industry and consequently an examination of how a drug could be this expensive. In 2015, experts in the field agreed that the price of Soliris and other orphan drugs was largely unrelated to the costs of research, development, and manufacturing (4). Pharmaceutical companies such as Alexion (the manufacturer of Soliris) profit more off of these orphan drugs than drugs for more common medical conditions (4). This is especially infuriating when you consider that 80 to 90 percent of the research and development for Soliris was done by publicly funded researchers in academic laboratories, according to industry insider Sachdev Sidhu (4).

Since the majority of patients cannot afford such an exorbitantly expensive medication, the cost is usually picked up by public health care. This puts strain on the entire health care system and forces some countries to deny access to the drug altogether. In New Zealand and certain provinces of Canada, Soliris is not covered by public health care at all and patients are left untreated (4). Soliris may be an extreme example but inflated medication costs are a huge problem for rare disease patients.

The Orphan Drug Act has resulted in the development of an influx of rare disease treatments. The legislation incentivizes treatments being developed for rare diseases but does not limit pharmaceutical companies from charging rare disease patients extraordinary amounts to use these drugs. In other words, rare disease advocates may have won an important battle but there is still a war being fought.

The Orphan Drug Act was passed because of advocacy efforts by NORD, a relatively small group of people representing a small demographic. Even a small group can make a large impact. Advocacy is one of the most important ways to open doors when it comes to rare diseases.


(1) Joseph DiMasi, Henry Grabowski, Ronald Hansen. “Innovation in the pharmaceutical industry: New estimates of R&D costs”. Journal of Health Economics. 2016.

(2) Peng Sun, Jiong Guo, Rainer Winnenburg, Jan Baumbach. “Drug Repurposing by Integrated Literature Mining and Drug–Gene–Disease Triangulation”. Drug Discovery Today. 2016.

(3) Andreas Hadjivasiliou. “Orphan Drug Report 2018” (PDF). EvaluatePharma. Retrieved 3 October 2018.



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Author Bio: Zoe Mandese is a biologist who is enthusiastic about using genetic data to improve lives. In her day job, she works with DNA sequencing and analysis. Zoe is volunteering with the Rare Genomics Institute as a copywriter and blogger writing about the complex factors surrounding rare disease.