Rare Diseases and Orphan Drugs

Why treatments for rare diseases can cost crores of rupees, how incentives encourage their development, and how India supports patients.

A rare disease affects a small number of people, though together thousands of rare diseases affect many millions worldwide. Medicines for them are called orphan drugs, because the small market once left them “orphaned” by drug companies.

Why orphan drugs are costly

Development costs are high, but patients are few.
Firms charge very high prices to recover costs. Some therapies cost crores of rupees per patient, and some gene therapies cost millions of dollars.

Incentives

The US Orphan Drug Act of 1983 offered tax credits, fee waivers and seven years of market exclusivity. Orphan drug approvals rose sharply afterwards. Other countries adopted similar rules.

India’s policy

India’s National Policy for Rare Diseases, 2021 provides financial support, up to 50 lakh rupees per patient for certain rare diseases, treated at designated Centres of Excellence. It also encourages domestic production. Indian companies have started making cheaper versions of some rare disease drugs, cutting costs dramatically.

Ethical dilemmas

Should health budgets spend huge sums on a few patients or cheaper treatments for many?
Economists use cost-effectiveness analysis, but many argue rare disease patients deserve care regardless.

The local version

A drug for a rare genetic disorder costs crores a year when imported. An Indian firm develops a version at a small fraction of the price, allowing government funds to treat many more children.

Thinking rare diseases affect very few people overall

Each is rare, but thousands exist, affecting many millions of people in total.

Key takeaways

Orphan drugs treat rare diseases and can be extremely expensive.
The 1983 US Orphan Drug Act boosted development through incentives.
India's 2021 policy offers up to 50 lakh rupees per patient for some diseases.
Cheaper domestic versions and cost-effectiveness debates shape access.