What Is an Orphan Drug?

Reviewed by: HU Medical Review Board | Last reviewed: February 2024 | Last updated: March 2024

Rare diseases are sometimes called "orphan diseases" because they are neglected by the medical community or affect very few people. "Orphan drugs" have many challenges in the development pipeline because too few people need the medicine.1,2

Scientists have identified 7,000 rare diseases so far. Of these, only 500 have a treatment approved by the US Food and Drug Administration (FDA). This means more than 9 out of 10 rare diseases do not have an approved treatment.3,4

The Orphan Drug Act of 1983

Creating new drugs is expensive, so companies avoid investing in medicines if they will be used by small numbers of people. It can also be hard to build a clinical trial around a very small patient population or if there is little understanding of a disease.5

To help address this issue, the US Congress passed the Orphan Drug Act (ODA) in 1983. It was the first such legislation in the world and other countries soon followed.6

The ODA makes it more profitable for drug companies to develop treatments for rare diseases. Companies may request an orphan drug designation and get:1,3,5-7

  • Tax credits for clinical studies in people with a rare disease
  • A fee waiver that saves the company almost $3 million (as of 2022)
  • 7 years of market exclusivity for prescriptions given to treat the orphan disease upon FDA approval
  • Access to grants that help defray the costs of developing a new drug for a rare disease

The ODA dramatically increased the number of drugs available to treat rare diseases. From 2006 to 2015, over 270 orphan drugs were approved. That may sound like a small number. However, from 1973 to 1983 only 10 drugs were approved to treat rare diseases.7,8

What makes a disease rare?

Different countries have different standards for what makes a disease rare. The FDA defines a rare disease as one that affects fewer than 200,000 people in the United States. Other countries' standards for what makes a disease rare include:5,9-11

  • European Union: fewer than 1 in 2,000 people in Europe
  • Japan: fewer than 50,000 people or 4 in 10,000 people
  • Australia: 2,000 people or less of their total population

Each country uses its definition to decide whether to grant a drug company special incentives to develop rare disease medicines.7

Successes of the ODA

After 1983, it became more profitable for drug companies to invest in discovering new drugs or recycling older drugs that had been discontinued. Medicines for rare diseases have become more diverse, and now include traditional drugs, biologics, gene therapy, and devices.6,7

These new drugs have made improvements in the lifespan of people with some types of rare diseases, such as those with:8

Limitations of the ODA

There have been both successes and problems with the ODA. Even with government incentives, about 90 percent of all rare diseases still do not have a treatment. The reasons are complex.3,7,8

First, a drug may become available but is too expensive for the patient to afford even with insurance or discounts. The mid-range cost of orphan drug iscosts $100,000 a year, which is 20 times more than that of a non-orphan drug. Some orphan drugs are even more expensive. For example, eculizumab (Soliris®) cost $440,000 a year in 2019 to treat a rare blood disorder.7

Over time, the US Congress has cut the tax incentives available to companies who work on drugs for orphan diseases. This may reduce drug companies' interest in investing in medicines to help people with rare conditions.12

CDER's ARC Program

In 2022, the FDA's Center for Drug Evaluation and Research (CDER) launched a new program to address the development of drugs to treat rare diseases. The Accelerating Rare disease Cures (ARC) program focuses on speeding and increasing the number of safe, effective treatments for rare diseases.13

Examples of orphan drugs

Here are some examples of orphan drugs approved for use in the United States and the condition each one treats:14

  • Afamelanotide (Scenesse®) – a certain type of porphyria
  • Afatinib (Gilotrif®) – certain types of metastatic non–small cell lung cancer
  • Agalsidase beta (Fabrazyme®) – Fabry's disease
  • Alglucerase injection (Ceredase®) – Gaucher's disease type 1
  • Isavuconazonium sulfate (Cresemba®) – invasive aspergillosis and zygomycosis
  • Ivacaftor (Kalydeco®) – cystic fibrosis
  • L-glutamine (Endari®) – sickle cell disease
  • Mipomersen (Kynamro®) – homozygous familial hypercholesterolemia
  • N-acetylgalactosamine-4-sulfatase, recombinant human (Naglazyme®) – Maroteaux-Lamy syndrome

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