Care About Rare: ODA in Danger?

By Connie Selinsky · Aug 2018

On August 16, 2018, a drug called WVE-210201 was granted orphan drug and rare pediatric disease designations by the FDA for potential treatment of Duchenne Muscular Dystrophy. Progress like this depends on the Orphan Drug Act (ODA) — and that act has faced calls for repeal.

What Makes a Disease Rare?

In the US, a rare disease is defined as affecting fewer than 200,000 people. There are over 7,000 known rare diseases affecting approximately 1 in 10 Americans — about 30 million people. Eighty percent have a genetic component. The ODA creates incentives for pharmaceutical companies to develop drugs for rare diseases by providing a 50% tax credit on qualifying clinical research costs. Since its passage, FDA-approved drugs for rare diseases grew from 34 to over 500.

Common Misconceptions

Some fear that pharmaceutical companies abuse the ODA because major-selling drugs are also approved for rare disease indications. However, the tax credit applies only to costs associated with rare disease clinical trials. Orphan drug costs represent less than 10% of total US drug sales — they are not a major driver of rising healthcare costs. Being informed about these facts matters for policy decisions that affect the 30 million Americans living with rare disease.