Price of Rarity: Regulating Equity in Orphan Drugs

Authored by: Lamisa Aziz

Art by: Andrew Mo

A diagnosis of a rare disease often sounds less like a medical label and more like a sentence: one marked by uncertainty, isolation, and the unspoken fear that help may exist but remain out of reach. Orphan drugs, treatments designed for these rare conditions, offer a glimmer of hope to patients long overlooked by the pharmaceutical market. Yet that hope comes with a staggering cost, with jarring price tags that can exceed the value of a home. In this world of orphan drugs, hope comes with an invoice, and the balance between innovation and basic human dignity is starting to crack.

The Orphan Drug Act of 1983 was born from good intentions. At the time, rare diseases were largely ignored by pharmaceutical companies because they didn’t promise a profitable market. The Act stepped in with incentives like extended market exclusivity, tax credits, and fee waivers to encourage development. It worked: more than 600 orphan drugs have been approved since the legislation passed, compared to just a handful before [1]. But its success has come with consequences that policymakers did not fully anticipate. Today, the price of many orphan drugs ranges from $200,000 to over $800,000 per patient per year. Spinraza, a treatment for spinal muscular atrophy, launched at $750,000 for the first year. Zolgensma, a gene therapy for the same condition, made headlines with a $2.1 million price tag [2]. These are not outliers; they are the new standard. As Hughes, Tunnage, and Yeo point out, orphan drugs represent an increasingly large share of total pharmaceutical spending in the United States, and that share continues to climb as more therapies enter the market [3].

The issue is not simply price—it’s equity. High costs restrict access, even for those with insurance. Copays, prior authorization requirements, and coverage denials can put life-saving care behind administrative and financial barriers. Research by Kesselheim and colleagues underscores the human cost: many patients with rare diseases still cannot access therapies because insurers and public programs struggle to absorb the expense [4]. Pharmaceutical companies often argue that high prices reflect the cost of development and the small patient pool. But evidence from research studies complicates that justification. Many “rare” drugs end up earning blockbuster-level revenue by expanding their indications or exploiting regulatory definitions. Nearly a third of orphan drugs eventually receive approval for additional conditions, dramatically increasing their profits well beyond the niche populations they were ostensibly designed to serve [5]. Moreover, half of all orphan drugs approved over the last decade received some degree of public research funding before private companies stepped in, raising questions about who should reap the rewards.

Ethically, the current system fails its central promise: helping vulnerable patients. When access depends on wealth, geography, or insurance generosity, the value of innovation is fundamentally undermined. From a policy standpoint, this is unsustainable. As more gene therapies for rare diseases reach the market, the cost burden for Medicaid, Medicare, and private insurers will swell. Without intervention, these drugs will deepen inequalities and force impossible budgetary trade-offs. Government regulation of orphan drug pricing isn’t about punishing innovation; it’s about putting guardrails on a system that was never designed for the economic conditions we currently face. European countries, including France and Germany, already negotiate prices for orphan drugs and tie reimbursement to clinical value [6]. The U.S. could do the same through value-based pricing, caps linked to development costs, or requirements for transparency in pricing decisions. These aren’t radical ideas but pragmatic responses to a distorted market.

Innovation is only meaningful when it reaches the people it was designed to help. The Orphan Drug Act opened the door to possibility, but unregulated pricing has turned that door into a toll gate only few can pass through. Regulation is not the enemy of progress; it’s the condition for its legitimacy. If we believe rare disease patients deserve treatment, we must make sure that treatment doesn't come at the cost of access, equity, and economic sustainability.

References

1. Gabay M. (2019). The Orphan Drug Act: An Appropriate Approval Pathway for Treatments of Rare Diseases?. Hospital pharmacy, 54(5), 283–284. https://doi.org/10.1177/0018578719867665

2. Nuijten M. (2021). Pricing Zolgensma - the world's most expensive drug. Journal of market access & health policy, 10(1), 2022353. https://doi.org/10.1080/20016689.2021.2022353

3. Hughes, D. A., Tunnage, B., & Yeo, S. T. (2005). Drugs for exceptionally rare diseases: do they deserve special status for funding?. QJM : monthly journal of the Association of Physicians, 98(11), 829–836. https://doi.org/10.1093/qjmed/hci128

4. Kesselheim, A. S., Myers, J. A., & Avorn, J. (2011). Characteristics of clinical trials to support approval of orphan vs nonorphan drugs for cancer. JAMA, 305(22), 2320–2326. https://doi.org/10.1001/jama.2011.769

5. Yin W. (2008). Market incentives and pharmaceutical innovation. Journal of health economics, 27(4), 1060–1077. https://doi.org/10.1016/j.jhealeco.2008.01.002

6. Young, K. E., Soussi, I., Hemels, M., & Toumi, M. (2017). A comparative study of orphan drug prices in Europe. Journal of market access & health policy, 5(1), 1297886. https://doi.org/10.1080/20016689.2017.1297886