Orphan drug

An orphan drug is a pharmaceutical agent that has been developed specifically to treat a rare medical condition, the condition itself being referred to as an orphan disease.

In the US and EU it is easier to gain marketing approval for an orphan drug, and there may be other financial incentives, such as extended exclusivity periods, all intended to encourage the development of drugs which might otherwise lack a sufficient profit motive. The assignment of orphan status to a disease and to any drugs developed to treat it is a matter of public policy in many countries, and has resulted in medical breakthroughs that may not have otherwise been achieved due to the economics of drug research and development.

According to Thomson Reuters in their 2012 publication "The Economic Power of Orphan Drugs", there has been increased investing in orphan drug Research and Development partly due to the U. S. Orphan Drug Act of 1983 (ODA) and similar Acts in other regions of the world and also driven by "high-profile philanthropic funding." The period between 2001 to 2011 was the "most productive period in the history of orphan drug development, in terms of average annual orphan drug designations and orphan drug approvals." For the same decade the compound annual growth rate (CAGR) of the orphan drugs was an "impressive 25.8 percent, compared to only 20.1 percent for a matched control group of non-orphan drugs." By 2012 the market for orphan drugs was worth USD$637 million compared to the USD$638 million matched control group of non-orphan drugs.