The world orphan drug market is expected to increase at a rate of 11.5%, reaching a value of $105.2 billion by 2017.” – Myshko, PharmaVoice. 2014 Feb; 26

In the United States, about 30 million people suffer from some form of rare disease. Around the globe, that number rises to 350 million, according to a white paper by Premier Research. Of those 350 million patients, 75% are children. Despite the fact that making drugs for rare diseases comes with financial difficulties, the orphan drug market is growing. In 2011, orphan drugs made up one-third of new molecular entities (NMEs) approved by the FDA. The orphan drug market is growing because of patient need and government incentives.

Patient need lies at the core of orphan drug approval. According to Orphanet, there are more than 4,000 rare diseases in the world for which there is no treatment. The FDA defines rare diseases as those that affect fewer than 200,000 people in the United States. Children are the most commonly affected by such diseases. According to a 2013 report about rare diseases, 30% of children with a rare disease die before the age of five. Drug makers see this dire need and are responding. Of all orphan treatments, one-third are for children.

The orphan drug market is also growing because of government push incentives. Push incentives are those that minimize costs to create the drug. Tax credits, research grants and fee exemptions are examples of the FDA’s push incentives. These incentives were created as part of the 1983 Orphan Drug Act. According to the ICE Epilepsy Alliance, only 15 drugs had been approved for rare diseases before the 1983 Orphan Drug Act and its push incentives. Since then, 265 such drugs have been approved.

Government pull incentives are another cause of growth in the orphan drug market. Part of the 1983 Orphan Drug Act, pull incentives are designed to benefit the pharmaceutical company after the drug discovery. These include special protocol assessment and priority review, which quicken assessment of clinical trial protocol and drug applications, respectively. Another perk of pull incentive is that of market exclusivity, which grants all orphan drugs seven years of marketing exclusivity.

Patient need and push and pull incentives are causing growth in the market for orphan drugs. This growth gives hope to clinicians and patients. If such growth continues at this accelerated rate, the 262.5 million children diagnosed with rare diseases will live longer and healthier lives.