High prices make once-neglected ‘orphan’ drugs a booming business

By Carolyn Y. Johnson August 4 at 6:23 PM

Three decades ago, Congress listened to the plight of Americans sick with diseases so rare many people had never heard of them. They were victims of a pharmaceutical market failure — “orphans” ignored by drug companies because, the thinking went, tiny groups of patients would lead to trifling sales.

To make the business viable, Congress — pushed by patients and a popular television show that highlighted rare diseases — passed the Orphan Drug Act. The 1983 law offered drug companies attractive tax credits and monopolies to develop treatments for rare diseases, radically transforming the pipeline of orphan drugs.

Now, rare diseases are no longer a neglected niche of the pharmaceutical business; they are a tantalizing moneymaking opportunity. More than 400 treatments have been approved since the law passed. Last year, nearly half of all novel drugs approved were treatments for orphan diseases.

But critics and some medical experts are concerned that the Orphan Drug Act may have backfired.

(More here.)