Orphan Drugs Are Neglected No More

Wall Street Journal

2 days ago

A bill as large as the GOP reconciliation budget takes time to pore through, and we can now report a hidden gem: It fixes the Inflation Reduction Act's disincentive to develop treatments for rare diseases.
The IRA was a woeful bill in countless ways, but the worst is its Medicare drug price controls. The early damage has been less investment in so-called orphan drugs for rare diseases. Because the pool of patients is small, manufacturers have to set higher prices to recoup their investment. This makes them an attractive target for Medicare bureaucrats.
The IRA price controls exempted orphan drugs, but only if they are approved for a single indication. They lose their exemption if they are used to treat more than one rare disease, though many diseases share an underlying pathology such as a gene mutation. Of the 280 orphan drugs approved between 2003 and 2022, 63 were approved later for another indication.
The law has discouraged companies from studying orphan drugs for multiple rare diseases. Some face a Hobson's choice. If an experimental medicine works for two rare diseases, companies might have to jettison one use lest their drug become subject to price controls and return on its investment collapse.