Go Ad-Free
logoThe People's Perspective on Medicine

Are Sky-High Orphan Drug Costs Bankrupting Healthcare?

Can the drug companies justify extraordinarily high orphan drug costs? If a new cancer treatment can cost up to a million dollars, who will pay? Will insurance premiums skyrocket?

Drug companies have fallen in love with rare diseases. That’s because they are huge money makers for the pharmaceutical industry. It wasn’t always this way. Before the Orphan Drug Act, rare or unusual conditions didn’t get much attention. That’s because they were perceived as money losers. If only a few hundred or a few thousand people took your medicine, it was deemed unprofitable. That has changed radically. As orphan drug costs have skyrocketed, such medications have become gold mines for Big Pharma.

Profiting from Orphans:

Most people have a great deal of sympathy for orphans. They have lost their parents and often have to depend upon the kindness of strangers to overcome the significant challenges life throws at them.

When it comes to orphan drugs, however, the pharmaceutical industry has discovered that this classification can represent huge profits. It wasn’t supposed to be that way.

The Orphan Drug Act:

In 1983 Congress passed and President Reagan signed the Orphan Drug Act. This legislation was intended to encourage the pharmaceutical industry to research and develop medicines for rare conditions. It was assumed that such drugs would not be profitable because so few patients would take them.

The Food and Drug Administration was very cooperative in advancing this program. It referred to these medications as “significant drugs of limited commercial value.”

To incentivize drug companies to invest in this kind of research, Congress offered tax breaks. Market exclusivity and patent extension were added benefits. In those days neither the FDA nor Congress imagined that pharmaceutical companies would charge tens of thousands of dollars for orphan drugs.

We met with a high-level executive within the pharmaceutical industry. He told us about a meeting of several other drug company executives. A hypothetical question was posed: What would we do if one of our companies discovered a cure for cancer? After much discussion, these leaders of key pharmaceutical companies concluded that they would have to give the drug away. Otherwise they would be despised by the American public. How far we have come since that meeting decades ago.

Are Orphan Drug Costs Out of Control?

Fast forward to today’s marketplace. The humanitarian Orphan Drug Act that was supposed to create affordable medicines for rare conditions has become a windfall for the pharmaceutical industry. It has challenged many patients and their families who may not be able to afford the medicines they so desperately need. Check out these mind-bending orphan drug costs:


Some of the most expensive drugs in the pharmacy were developed under the orphan drug umbrella. One example is interferon gamma-1B (Actimmune). Injections of this drug treat a rare immunodeficiency disease called chronic granulomatous disease.

A genetic defect causes people with this condition to develop frequent fungal and bacterial infections. The drug is also used to treat severe malignant osteopetrosis. A month’s supply of Actimmune could cost as much as $55,000. Over a year that could add up to $600,000 or more.


Another orphan drug is a C1 inhibitor called Cinryze. It is prescribed for a rare condition called hereditary angioedema. Without warning the face may swell. The lips and tongue can also balloon and block breathing. The life-saving drug that prevents the attack can cost over $46,000 a month.


Cancer drugs are also notoriously expensive. The multiple myeloma drug lenalidomide (Revlimid) is a life-saving medication. A month’s supply can run over $14,000. Even people with insurance may find their copay and deductible payments are out of reach.

Opdivo, Keytruda, Yervoy and CAR-T:

Other very expensive cancer treatments include drugs like pembrolizumab (Keytruda), nivolumab (Opdivo) and ipilimumab (Yervoy). A new generation of cancer treatment called CAR-T (chimeric antigen receptor T-cell therapy) is projected to cost anywhere from $373,000 to $475,000. That doesn’t include the cost of hospitalization. An article in the Wall Street Journal (April 26, 2018) points out that the entire treatment could add up to $1 million. The Headline:

“The Million-Dollar Cancer Treatment: Who Will Pay?”

It’s hard to imagine how any individual could afford such orphan drug costs. Even insurance companies are likely to find the payments busting their budgets. Premiums will rise. That will impact everyone.

We have no fondness for the insurance industry, but with orphan drug costs out of control, insurance companies will have to raise prices across the board just to survive. Even so, co-pays and deductibles will make it hard for people with “rare” conditions to pay for life-saving medicines. Some people sell their homes and go into debt to keep a child alive. Others will doubtless die because they cannot afford a new breakthrough.

People’s Pharmacy Perspective:

Perhaps it is time for Congress to revisit the Orphan Drug Act. What was intended as an act of kindness has become a pathway for the pharmaceutical industry to charge exorbitant prices. Orphan drug costs should not be unconscionable. To profit to such a degree from the misery of others seems to us an affront to decency.

Rate this article
4.9- 13 ratings
About the Author
Joe Graedon is a pharmacologist who has dedicated his career to making drug information understandable to consumers. His best-selling book, The People’s Pharmacy, was published in 1976 and led to a syndicated newspaper column, syndicated public radio show and web site. In 2006, Long Island University awarded him an honorary doctorate as “one of the country's leading drug experts for the consumer.”.
Tired of the ads on our website?

Now you can browse our website completely ad-free for just $5 / month. Stay up to date on breaking health news and support our work without the distraction of advertisements.

Browse our website ad-free
Join over 150,000 Subscribers at The People's Pharmacy

We're empowering you to make wise decisions about your own health, by providing you with essential health information about both medical and alternative treatment options.