It wasn’t that long ago that companies did not invest the time and money, in part because marketing drugs to such a small number of patients did not make economic sense.
The focus of pharmaceutical and biotech companies began to shift with the 1983 US Orphan Drug Act, which incentivized companies to focus on orphan diseases with tax credits for costs of clinical research, government grant funding, and a seven-year period of exclusive marketing given to the first sponsor of an orphan-designated product.
Now, orphan drug development shows great potential for commercialization, as noted in an economic analysis recently conducted by Thomson Reuters Life Sciences. In the report, they asked whether orphan drugs are truly economically viable for drug companies. Their answer was a resounding yes.