Orphan Drugs and Diseases

Orphan Drugs and Diseases: 101


What are orphan drugs and orphan diseases? 

The term “orphan drug” was coined in the 1960s when drugs for rare diseases were “orphaned” by pharmaceutical companies because of their lack of profitability (1). Specifically, orphan drugs were defined as “A drug that is not developed or marketed because it’s extremely limited use makes it unprofitable” (2). But what is an orphan disease? This is more complicated, and the definition varies from country to country with the orphan drugs act in the US defining it as a disease that affects less than 200,000 people nationally (3), equating to a prevalence of roughly 6 in 10,000. However, this differs slightly to the definition in the EU where the prevalence must not be more than 5 in 10,000 (4).  

Why do we need treatments for orphan diseases? 

Whilst the prevalence of individual orphan diseases is low, collectively they can account for a significant burden on a population’s health.  It is estimated that 30 million people in the EU suffers from a rare disease and 10% of the American population (4). This makes finding effective therapies for them of importance to fill this large unmet need which can present a disproportionally large strain on healthcare and social services.  

How is treating orphan diseases incentivised? 

Getting drugs to patients is a long process, taking on average 10 years from discovery to marketing authorisation. Further to this it is an expensive process costing several tens of millions of pounds. Therefore, if there is the desire to have treatments for these rare diseases pharmaceutical companies must be incentivised to bring them to market. 

Some countries give orphan drug designations to drugs that are intended to treat orphan disease. Incentives can then be offered to those designated drugs but there is a lot of variation between countries. They often offer benefits such as attractive pricing, extension of patents or less data requirements. For example, in the UK, manufactures can apply to the highly specialised technology fund where the cost effectiveness threshold is raised from £20,000-30,000 to £100,000 (5). In Germany, if orphan drugs have sales of less than €50 million per year then they do not have to provide comparative data (6). Finally in the US, orphan drugs may be eligible for tax cuts on clinical trials and patent extension3. 

How successful have incentives been?  

Treatments for orphan diseases have risen greatly in recent years due to government incentives, advances in technology, and patient advocates groups. In the US for example, orphan drug designation began in 1983 and since this point there has been an increase in the number of drugs granted the designation from 0 in 1983 to 476 in 20207. Manufactures are often keen to seek orphan drug designation as the incentives can make them highly profitable, demonstrated by the fact that 6 out of the 10 best selling drugs form 2020 where orphan drugs8. However, many healthcare systems are beginning to resent the high prices charged for these drugs, exemplified by Bluebird Bio’s Zynteglo which had a price tag of almost €1.6 million has been rejected in the UK, Germany and was the subsequently pulled from the European market8. Therefore, future orphan drugs are likely to start facing tougher reimbursement hurdles.  

Data: FDA orphan drug designation and approvals (7)


  1. Koichi Mikami. Orphans in the Market: The History of Orphan Drug Policy, Social History of Medicine. 2019. 32(3) 609–630 
  2. Orphan Drug. Accessed at December 2021 
  3. Rare Diseases at FDA . Accessed at December 2021 
  4. Orphan designation: Overview. Accessed at December 2021 
  5. National Institute for Health and Clinical Excellence (NICE). Interim process and methods of the Highly Specialised Technologies Programme updated to reflect 2017 changes. London: NICE; 2017 
  6. Schulz S, Passon AM, Perleth M, Kulig M, Paschke N, Matthias K. The Evaluation of Orphan Drugs by the German Joint Federal Committee-An Eight-Year Review. Dtsch Arztebl Int. 2020;117(50):868-869.  
  7. FDA. Orphan drug designation and approvals. Accessed at December 2021 
  8. The top 20 drugs worldwide sales in 2020. Accessed at December 2021 
  9. Zynteglo, bluebird bio. Accessed at December 2021 

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