“Orphan” drugs were once a market almost no company wanted. Four decades later, they make up more than half of the new drugs the Food and Drug Administration approves.
In 2024, the FDA’s drug center approved 50 new medicines. More than half of them (26 in all) were built to treat a rare disease.
That would have stunned anyone working in medicine in the early 1980s. Back then, rare diseases were a part of the market that drug companies avoided. The patient groups were too small, the costs too high, and the payoff too uncertain.
In the decade before 1983, fewer than 10 drugs for rare conditions reached the market. Only 38 such drugs had ever been approved in the United States at all.
Then Congress passed the Orphan Drug Act, signed into law on Jan. 4, 1983. Forty-plus years later, treating the rare has become one of the most active and closely watched areas in all of drug development.
This is the story of how that happened, developed by Kivo, a quality management system and RegOps platform for life sciences teams.
What The Orphan Drug Act Changed
The Orphan Drug Act did something really simple. It provided significant financial incentives to companies that could develop treatments for rare diseases.
The law applies exclusively to drugs meant to treat a rare disease, which the FDA defines as a condition affecting fewer than 200,000 people in the United States. If a drug qualifies, its maker can apply for an “orphan designation,” a tag that comes with significant financial rewards, including:
- Seven years of exclusive rights to sell the drug once it is approved
- Tax credits to help cover the cost of clinical trials
- Eligibility for research grants
These incentives leveled the financial playing field by significantly lowering the costs and raising the rewards for developing rare disease treatments. As a result, companies slowly began turning their attention toward this category of treatments.
A 4-Decade Development Explosion
The response built slowly at first, then took off.
From 1983 through 2022, the FDA granted 6,340 orphan drug designations, covering drug development for 1,079 different rare diseases. Of those designations, 882 went on to earn at least one FDA approval, delivering treatments for 392 rare conditions.
The pace picked up further in each progressive decade. Designations more than doubled from the 1980s to the 1990s. They nearly doubled again from the 1990s to the 2000s. And they nearly tripled from the 2000s to the 2010s.
That number continues to climb each year.
The share of all new drugs that are orphan drugs tells the same story from another angle. In the late 1980s, orphan drugs made up just 17% of all FDA approvals. By the late 2000s, that share had roughly doubled to around a third. In 2024, it crossed half. Rare disease drugs went from a small minority to the single largest category of new medicines the FDA clears.
Where The Money Goes
The boom has not spread evenly across all rare diseases. It has concentrated heavily in one area: cancer.
Seven of the 10 most-designated and most-approved