Government Price Caps Threaten Rare Disease Cures

Millions in the United States suffer from rare diseases and are waiting for a cure. Forty years ago, there were fewer than 40 medicines targeting rare diseases. But today, thanks to smart policies that promotes free enterprise, there are more than 880 such medicines on the market and another 700 are under development. Unfortunately, this progress is under threat due to arbitrary price caps-imposed Congress.

Rare but not sparse: Rare diseases are those that impact fewer than 200,000 people in the United States. But, considering there are more than 10,000 recognized rare diseases - and new diseases are being discovered every year – the reality is that more than 30 million Americans and between 263 million and half a billion people suffer from them globally.

Challenges continue: Developing new treatments for rare diseases is extremely difficult, complex, expensive, and time-consuming. Because, by nature, rare diseases afflict so few people, it is hard to conduct proper clinical trials. In addition, the market for these medicines is so small that securing investment for these trials can be even harder. To address these challenges, in the 1980s, policymakers created new economic incentives for research and development into rare diseases, and this sound policymaking led to the development of hundreds of new medicines.

Price Caps harm innovation: As we’ve written about previously, experts have long warned that price caps imposed by federal bureaucrats would have devastating consequences on medical innovation. To safeguard rare disease research and development, Congress exempted orphan medicines from price controls, but only if they’re approved for just one indication. In practice, this means that products with the potential to treat more than one disease, which accounts for 1 in 5 orphan medicines, could be threatened with arbitrary price caps.  

Real impact: Already, government price caps have caused many companies to stop developing orphan medicines. For instance, a leader in RNAi therapeutics, made the difficult decision to stop researching whether their nerve damage drug might also help patients with a rare genetic eye disease that results in childhood vision loss.

The bottom line: Market-restrictive policies like price caps are causing more harm than good for pharmaceutical innovation, and orphan medicines are no exception. Congress must act swiftly to ensure all orphan medicines are kept safe from damaging price caps. Doing so will ensure American patients can receive the next generation of treatments and cures.

About the authors

Brad Watts

Brad Watts is the Vice President for Patents and Innovation Policy at the U.S. Chamber of Commerce's Global Innovation Policy Center (GIPC). He works with U.S. Chamber members to foster a political, legal, and economic environment where innovators and creators can invest in the next big thing for the benefit of Americans and the world.

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