Orphan drugs are not driving health care spending so let’s invest in them

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As the debate over health care costs and drug prices intensifies, one of the issues that has been raised relates to the cost of orphan drugs — drugs for patients with rare diseases. Such drugs are often identified by critics as being more costly than drugs for more common diseases, despite the counterpoint that the volume of such sales is, by definition, low.

Thus, we often hear that orphan drugs are significant contributors to rising health-care costs in the U.S., out of proportion to their contributions to health care. 

{mosads}The National Organization for Rare Disorders (NORD), which I head, decided earlier this year to see if the critics are right. We commissioned the Quintiles/IMS Institute to study whether orphan drugs really are a significant driver of health care costs.


The results, a report entitled “Orphan Drugs in the United States: Providing Context for Use and Cost,” is the first study to quantify the cost of orphan drugs within the much larger health care system.

The inescapable conclusion of the study is that orphan drugs are not a major factor in health-care spending. Of total drug sales of $450 billion in the U.S. in 2016, only 7.9 percent was for orphan drugs.

The reason that this study is especially important to the rare disease patient community is that the false assertions about the high cost of orphan drugs to the health care system has led some to call for major undermining of the Orphan Drug Act (ODA).

This is the law passed by Congress in 1983 that provided, and still provides, incentives for companies to develop drugs for rare diseases, which is defined in the law as a drug used to treat rare diseases affecting fewer than 200,000 Americans. The U.S. Food and Drug Administration (FDA) administers the law.

The law has been wildly successful. Since 1983 almost 600 drugs have been approved for rare diseases. This is a small number compared to the 7,000 rare diseases that have been identified, but it still is great progress. Many people alive today are able to live with their rare disease because of the drugs that have been developed. Most of these diseases are genetic and affect people their entire lives.

The progress that has been made in treating and in some cases curing rare diseases can be attributed directly to the incentives in the law. Remove them, and we would see an immediate and substantial drop in biotechnology investment and innovation. 

The Orphan Drug Act is as necessary and important today as it was in 1983. The success of the ODA is particularly pertinent at this moment in time when scientific and medical momentum are spurring development of innovative, safe, and effective treatments for children and adults with very challenging medical conditions.

While complaints other than cost have been raised about the law, the record shows that where the ODA appeared to have missed the mark, simple adjustment of regulatory interpretation or procedures have obviated the need to revisit the original legislation.

For example, FDA, on its own initiative, found a basis in the law to extend the orphan drug program to cover biodefense products and drugs to treat tropical diseases. In the other direction, the agency has been persistent in interpreting the ODA to preclude the creation of new “rare diseases” that are not medically supported.

The burden of health care costs in America is great and rising. It would be easy to say we can no longer afford to seek and pay for safe, effective treatments for those with diseases affecting only a few. However, it isn’t orphan drugs that are driving up health-care costs, and we are a richer society, both in spirit and materially, when the health care needs of all our citizens are met to the best of our ability.

Peter L. Saltonstall is President and CEO of the National Organization for Rare Disorders (NORD).

Tags Orphan drugs Rare disease

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