Orphan Drug Expenditures In The United States: A Historical And Prospective Analysis, 2007-18

The Orphan Drug Act of 1983 established incentives for the development of drugs that treat rare, or orphan, diseases. We used the IMS Health MIDAS database of audited biopharmaceutical sales to measure US annual spending on orphan drugs in the period 2007-13, and we estimated spending on the drugs for the period 2014-18. We identified 356 brand-name orphan drugs that were approved by the Food and Drug Administration in the period 1983-2013. While we included orphan drugs with both orphan and other indications, we adjusted spending to include only spending for orphan indications. In 2014 dollars, expenditures on orphan drugs totaled $15 billion in 2007 and $30 billion in 2013-representing 4.8 percent and 8.9 percent of total pharmaceutical expenditures, respectively. Our future trend analysis for the period 2014-18 suggests a slowing in the growth of orphan drug expenditures. The overall impact of orphan drugs on payers' drug budgets is relatively small, and spending on orphan drugs as a percentage of total pharmaceutical expenditures has remained fairly stable. Concerns that growth in orphan drug expenditures may lead to unsustainable drug expenditures do not appear to be justified.