What are orphan drugs?

In the simplest terms, all international definitions and regulatory guidelines recognize that an orphan drug is a therapy developed for a disease that is rare and life-threatening or chronically debilitating and has development costs that will far exceed the monetary returns from the sale of the drug. It is estimated that there are over 5,000 rare diseases with many added to the medical literature each week. While 300 orphan drugs and devices have been approved in the last 25 years, there is still a growing unmet medical need. In the United States, an orphan drug as defined under the Orphan Drug Act of 1983 (ODA) is a therapy developed for a disease that affects less than 200,000 people in the United States or a disease that is of a low prevalence (<5 people per 10,000 in the community).

How do pharmaceutical or biotech companies afford to develop orphan drugs, knowing that their development will not be profitable? The Office of Orphan Products Development (OOPD) is the government body charged with overseeing orphan drug development in the United States. This body administers the provisions of the ODA and provides incentives to companies that take on the task of developing orphan drugs. They provide incentives such as funding for clinical research, streamlined regulatory processes which are acceptable in the United States and the European Union, assistance for designing research protocols, tax credits, process patents for biotechnology products, accelerated approvals and market exclusivity.

Such assistance appears to be effective in driving the development of orphan drugs. In fact, the global orphan drug market grew from $54.5 billion in 2005 to $84.9 billion in 2009 and the market is expected to reach $112.1 billion in 2014. Companies like Bayer, Eli Lilly, GlaxoSmithKline, Johnson & Johnson, Merck, Novartis, Pfizer and Sanofi-Aventis are all established pharmaceutical companies invested in the development of orphan drugs. Additionally, companies like Genzyme and Actelion have become very successful as specialists in orphan drug development.

Personalized Medicine

Personalized medicine is where a patient is provided a treatment plan based on their genetic profile. The field of oncology is thought to provide some of the best examples of personalized medicine. Two well-known oncology therapies that illustrate the idea of personalized medicine are Roche’s/Genentech’s Herceptin, developed for breast cancer patients that express the HER2 protein, and Novartis’s Gleevec, developed for chronic myelogenous leukemia (CML) patients to target the bcr-abl tyrosone kinase as well as for stomach cancer patients with c-kit positive gastrointestinal stromal tumors (GIST). These personalized therapies are a vastly different approach than the blockbuster, “one-size-fits-all” drugs that have been traditionally pursued by the pharmaceutical industry. While effective in these limited patient populations, the annual cost of Herceptin and Gleevec is estimated to be about $38,000-$60,000/year and $40,000-$98,000/year, respectively.

Personalized Medicine and Orphan Drugs

Personalized medicine and orphan drugs have many similarities. They both meet unmet medical needs, they provide a unique or significant benefit, they often link therapy with a diagnosis or biomarker, dosing may be individualized for both, and they provide a social benefit over health economics. Additionally, research and development costs are high, physician education is required, patient counseling for potential treatment outcomes is needed, and the identification of small patient populations is critical to a successful clinical trial.

We recognize that therapies for rare diseases and therapies affecting a small genetic population are similar in the fact that they are being developed for a small patient population. Is it possible that the strategies, incentives and streamlined regulatory processes for orphan drugs could be applied to the development of personalized medicines? Many believe it’s possible, especially when it comes to navigating the regulatory requirements needed for approval of a new therapy. It’s easy to see how more guidance on development strategies and accelerated approvals given to orphan drugs would be beneficial to therapies that could be considered personalized medicine.

As stated, orphan drugs and personalized medicines share the same high costs for development. Many are asking can we afford personalized medicines. Since it is fair to say that everyone would like to have the best treatments modern medicine can offer, personalized medicine will be an ongoing topic of discussion.


  1. Sharma, et al (2010). Orphan drug: Development trends and strategies. Oct-Dec 2(4):290-299.
  2. Hughes-Wilson (2010). Rare diseases and orphan drugs as a precursor to personalized medicine. Presentation at EuropaBio (March 2010).