The Healthcare Dilemma Between Economic Sustainability and Ethical Responsibility
Ultra-orphan drugs can cost over $2.1 million for a single course of treatment
Orphan drugs represent more than one-fifth of all pharmaceutical expenditures 9
Imagine a pharmaceutical company develops a revolutionary treatment for a devastating genetic disease that affects only 500 people worldwide. The therapy works, potentially saving lives, but costs $2.1 million for a single course of treatment. Should healthcare systems pay this price? Is it fair to other patients whose treatments could be funded with the same money? This isn't a hypothetical scenario—it's the reality facing healthcare systems today with drugs like onasemnogene abeparvovec-xioi for spinal muscular atrophy .
We find ourselves in an era of unprecedented growth in "orphan" drugs for rare diseases, which are poised to represent more than one-fifth of all pharmaceutical expenditures 9 . These ultra-orphan products—medicines for exceptionally rare conditions—command staggering price tags, creating one of modern healthcare's most complex dilemmas: how do we balance economic sustainability with ethical responsibility toward patients with rare conditions?
Healthcare systems face budget constraints while needing to fund treatments for all patients.
Patients with rare diseases deserve access to life-saving treatments regardless of prevalence.
Affect fewer than 1 in 2,000 people in Europe or under 200,000 people in the US
Affect fewer than 1 in 50,000 people or under 10,000 patients in the US
95% of rare diseases lack any approved treatment 8
The United States introduced legislation designed to incentivize pharmaceutical companies to develop treatments for rare diseases. This landmark legislation provided financial benefits including tax credits, grant funding, and periods of market exclusivity during which competing products cannot be sold 8 .
Similar regulatory frameworks now exist worldwide, including in the European Union, Japan, and Australia. These incentives have successfully stimulated drug development—the FDA approved 31 orphan products out of 53 novel drugs in 2020 alone 8 .
Critics argue that manufacturers may sometimes exploit these incentives to generate excessive profits 1 , raising questions about the balance between innovation encouragement and cost control.
Developing treatments for ultra-rare conditions presents unique scientific hurdles. With very few patients available, traditional randomized controlled trials—the gold standard of medical evidence—are often not feasible 6 .
These methodological adaptations allow drug development to proceed despite small patient populations but can create uncertainty about true treatment effectiveness 6 .
Rare Disease Research Complexity
Patient Recruitment Difficulty
"High orphan drug prices signify a healthy market that justifiably supports longer-term innovation while promoting wider equity of access" 1 .
Recent studies have attempted to objectively evaluate whether ultra-orphan drugs deliver sufficient value to justify their costs:
| Drug Category | Typical Health Gain (QALYs) | Additional Costs | Cost-Effectiveness |
|---|---|---|---|
| Ultra-orphan (<10,000 patients) | Most substantial | Highest | Often unfavorable |
| Orphan (10,000-200,000 patients) | Moderate | High | Mixed |
| Non-orphan (≥200,000 patients) | Reference level | Reference | Most favorable |
A 2024 study in Value in Health found that while ultra-orphan drugs typically offer significantly greater health benefits than other drugs, their substantial additional costs tend to result in less favorable cost-effectiveness ratios .
In 2020, researchers published a novel approach to determining reasonable orphan drug pricing in the journal Cost Effectiveness and Resource Allocation. Their methodology was based on a core proposition: rates of return for investments in developing orphan drugs should not be greater than the pharmaceutical industry average 5 .
The research team analyzed all novel drug approvals by the FDA between 2011-2015 (N=182), comparing orphan versus non-orphan drugs. They investigated two key variables:
Using the UK's National Institute for Health and Care Excellence (NICE) incremental cost-effectiveness threshold (£20,000 per QALY) as an anchor, they calculated adjustments based on R&D costs and expected market revenue 5 .
| Drug Category | Population Size | Adjusted CET (£ per QALY) |
|---|---|---|
| Non-orphan | Reference | £20,000 |
| Orphan | At designation cut-off | £39,100 |
| Orphan | At population mid-point | £78,300 |
| Ultra-orphan | Exceptionally small | £937,100 |
The research demonstrated that smaller patient populations logically require higher prices to deliver similar returns on investment. However, the dramatically higher threshold for ultra-orphan drugs—nearly £1 million per QALY—highlighted the fundamental tension in ultra-orphan drug pricing 5 .
The study authors noted this approach could help establish maximum allowable prices that society should be willing to pay, while acknowledging that decision-makers might still negotiate lower prices or refuse to pay such premiums 5 .
Developing and evaluating ultra-orphan treatments requires specialized methodologies and tools. Here are key components of the rare disease research toolkit:
| Tool/Method | Function | Application in Rare Diseases |
|---|---|---|
| Natural History Databases | Collect longitudinal disease data | Provides control group data when traditional trials aren't feasible |
| Biomarker Qualification Programs | Validate surrogate endpoints | Helps develop sensitive measures of treatment response |
| Multi-domain Responder Indices | Combine multiple outcome measures | Increases sensitivity to detect treatment effects in small populations |
| Adaptive Trial Designs | Allow modification of trial parameters | Maximizes efficiency of limited patient resources |
| International Patient Registries | Pool data across centers | Accelerates recruitment for clinical studies |
Each of these tools helps address the fundamental challenge of studying very rare conditions: limited patient availability for research. Without these specialized methodologies, drug development for ultra-rare conditions would be virtually impossible 6 .
The question of whether ultra-orphan medicinal products warrant ultra-high prices reveals a fundamental conflict in healthcare values. The evidence suggests that these treatments do deliver significant health benefits to patients with few alternatives, but at costs that challenge the sustainability of healthcare systems.
Based on monopoly capitalism and incentive misuse 1
As necessary for innovation and market functioning 1
Proposing alternative models of innovation and valuation 1
What emerges clearly is that current incentives and regulations are viewed as insufficient across all perspectives, with a sustained call for reform centered on welfare economics and resource allocation 1 .
As research advances and genetic therapies become more common, this dilemma will only intensify. The solution will likely require innovative pricing models, greater international cooperation, and transparent dialogue among manufacturers, payers, patients, and policymakers. What remains undeniable is that behind the economic debates are real patients and families hoping for treatments that might alleviate suffering from devastating rare conditions—a human dimension that transcends any cost-effectiveness calculation.
The global orphan drugs market is projected to grow from $193 billion in 2024 to approximately $610 billion by 2034, ensuring that these critical questions of value, price, and ethics will remain at the forefront of healthcare policy for the foreseeable future 8 .