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The number **** most expensive drug, as of 2024, was Lenmeldy or atidarsagene autotemcel, a drug for the treatment of metachromatic leukodystrophy (MLD) in children, with a manufacturer price of around **** million U.S. dollars per dose. The most costly drugs worldwide based on wholesale acquisition cost (list price) are mostly orphan drugs for rare diseases.

What are orphan drugs?

Orphan drugs are pharmaceutical products for the treatment of so-called rare diseases. These are diseases with a very low prevalence within a population. Thus, it is not too appealing for companies to invest into R&D for drugs, which they potentially could sell only to a small number of patients. However, because persons afflicted by rare diseases should have the same right for care and treatment as persons with more common diseases, specific regulations were introduced over time. In 1983, for example, the Orphan Drug Act was signed in the United States.

The impact of the Orphan Drug Act

The Orphan Drug Act applies certain incentives for pharmaceutical companies to develop and market orphan drugs. This includes, for example, tax credits on clinical research, accelerated administrative procedures, and a 7-year market exclusivity after approval. These and other benefits significantly changed the level of interest in rare disease treatments. Given the fact that there are around rare and ultra-rare diseases, drug manufacturers are increasingly entering this market with large potential. It becomes especially profitable when an already existing drug for common diseases also shows effects on a rare disease, or when an orphan drug emerges to be effective for other, more common diseases. In such cases, the orphan status of the drug helps companies to extend market exclusivity and add higher price tags, causing some critics to claim that the industry is gaming the system.