Though some research indicates that concerns over rising orphan drug costs may be unwarranted, a study conducted by America’s Health Insurance Plans (AHIP) found that orphan drug prices were more likely to rise when the drug was primarily used to treat common conditions – in contradiction to the Orphan Drug Act of 1983 which grants drug manufacturers a period of exclusivity and financial incentives to produce drugs to treat diseases that affect fewer than 200,000 people. The study found that drugs with mostly non-orphan uses had greater price increases than drugs prescribed almost always for their rare disease indications.
Orphan drugs are vital for patients suffering from rare conditions and the Orphan Drug Act has greatly incentivized the development of new drugs. The AHIP study ultimately finds that “A proper balance has to be struck between ensuring that the incentives remain for those firms focused on developing these very important, and much needed orphan disease therapies; while not allowing the Act to be exploited purely for financial gain.” The FDA recently noted that they are continuing to receive increased numbers of applications for orphan drug designations from drug makers. As prescription drug costs, and health care costs across the board, continue to rise sharply, more scrutiny of the orphan drug program may be inevitable.