Improving Orphan Drug Incentives to Address Unmet Health Needs

While the orphan drug market has been growing, a new study argues that the current unmet needs of patients with rare disease proves that current incentives are not efficiently stimulating orphan drug development.

Researchers analyzed orphan designations and FDA approvals from 1983 to 2015 using data from the FDA Approved Drug Products with Therapeutic Equivalence Evaluations and peer-reviewed papers on incentives for the development of orphan drugs. The research was published in Orphanet Journal of Rare Diseases.

“Given the growing number of rare and ultra-rare diseases, the overall rising cost of healthcare and stretched budgets to cover rare disease treatment, this study has the potential to enrich and appraise the current debate on the ethical imperatives of providing timely access to orphan drugs,” the authors wrote.

They found that during the time period, the FDA granted 3647 orphan drug designations and 554 orphan drug approvals. The diseases with the highest number of FDA approvals during this time were hemophilia and acute lymphoblastic leukemia with cancer an increasingly large target for orphan drug approvals.

However, patients face significant barriers to access these treatments, including delays in diagnosis, misdiagnosis, and psychological and economic stress.

“The price of orphan drugs is often the most significant barrier for patients to access care,” the authors wrote. “Life-threatening health conditions and the lack of therapeutic alternatives creates an inelastic demand for orphan drugs leading to high prices in a market with already limited competition.”

The cost of these drugs is typically much higher than the cost for drugs used to treat common diseases. The authors note that orphan drugs are profitable, and so pharmaceutical company incentives should be better aligned with societal budgetary constraints.

While there is no doubt that the Orphan Drug Act has successfully increased orphan drug designations and FDA approvals since 1983, the benchmark of success needs to be updated, the authors argue.

“Advocates are reluctant to point out any flaws based on the fear of stifling innovation, but with over 6500 diseases needing treatment, there is evidence to suggest patients’ unmet health needs remains a concern and more effective incentives have to be implemented,” the authors concluded.