Drug Companies Increasingly Investing in Treatments for Rare Diseases

The global pharmaceutical industry has traditionally taken a mass-market approach to investing in the treatment of disease. Mass-market drugs have generally been the most profitable for pharmaceutical companies, particularly those that treat common issues like heart disease or high cholesterol. However, as patents expire, drug companies have ramped up their efforts in the treatment of rare diseases. A rare disease is defined as an ailment that affects less than 200,000 people.

Physicians have uncovered roughly 7,000 rare diseases, and estimates show that 1 in 10 Americans has a rare disease. Diagnosis is often a challenge, and treatment may be impossible. However, this is changing. Pharmaceutical companies have found that the treatment of rare diseases can be highly profitable and require far less in terms of research and development costs. Drugs targeting rare diseases can cost $100,000 or more per year of treatment, face little competition in the market, and can be used to burnish a company’s image via financial aid for patients who otherwise cannot afford high drug prices. One estimate of the growth of the rare drug market suggests that these treatments will account for more than $1 billion of the pharmaceutical industry’s annual sales by 2019.

In addition to reduced research costs, government incentives, and easy routes to approval, pharmaceutical companies have stalwart allies in their efforts: patient advocacy groups and the “venture philanthropy” paradigm. Charities such as the ALS Association, the Cystic Fibrosis Foundation, and the Cure Sanfilippo Foundation have all had success in raising funds for drug research that have led to major advances in medicine. The Cystic Fibrosis Foundation, in particular, has been highly successful, raising millions of dollars that have gone toward drugs like Kalydeco. Moreover, the foundation’s pharmaceutical partner, Vertex Pharmaceuticals, hopes to create treatments that will target some 90 percent of cystic fibrosis patients by 2020.