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By Diya Asawa, 2025
The Orphan Drug Dilemma: Profit or Progress?

19-month old Teddi Shaw was diagnosed with a rare genetic disease called metachromatic leukodystrophy (MLD), soon after her 3-year old sister, Nala, began to show symptoms. The early diagnosis managed to save Teddi’s life, but it was too late for Nala, who became terminally ill. Nala, like most children with this fatal genetic disease, was born seemingly healthy. However, at around age 2, she began showing signs of a tremor and started to fall over more frequently. After an MRI scan, doctors found that her brain had experienced irreversible damage due to MLD, and she no longer qualified for Libmeldy, the novel gene therapy that had recently been approved for MLD treatment.
MLD is a rare genetic disorder characterised by severe damage to the central nervous system (CNS), affecting approximately 1 in 40,000 children in the UK. It is an inborn error of metabolism associated with a mutation in the ARSA gene, which is responsible for encoding the enzyme arylsulfatase A (ARSA). In healthy individuals, this enzyme degrades fats known as sulfatides, which are necessary for forming and maintaining the protective white matter or myelin around neurons. However, children like Nala lack functioning ARSA enzymes, which leads to abnormally high levels of sulfatides in the brain and nervous system.
This toxic build-up of sulfatides, specifically within neuronal lysosomes, negatively affects myelin-producing nerve cells called oligodendrocytes, causing demyelination (see Figure 1) and interfering with normal cellular processes like waste removal and cellular homeostasis. The subsequent deterioration of the nervous system leads to debilitating symptoms like motor difficulties, low muscle tone, cognitive decline, loss of speech and vision, paralysis, and eventually death.
Figure 1: A sketch illustrating MLD-induced degradation of the myelin encapsulating neuronal axons. Myelin acts as an insulating layer of protection around axons, increasing the speed of electrical signalling between neurons. Demyelination of neurons can impair signalling mechanisms, causing cognitive decline.
Teddi, who received an early diagnosis due to her sister’s visible symptoms, became the first child in the UK to receive Libmeldy (branded as Lenmeldy in the United States) - a one-off gene therapy developed by Orchard Therapeutics. With a list price of £2.875 million in the UK and $4.25 million in the US, it is also one of the most expensive treatments ever approved by regulatory bodies.
Libmeldy is an infusion made by collecting the patient’s own haematopoietic (blood) stem cells and genetically modifying them to include working copies of the ARSA gene (see Figure 2). Prior to the infusion, patients undergo chemotherapy treatment, which destroys their bone marrow cells so that they can be replaced by the modified stem cells. Once the gene-corrected cells are infused into the patient, the stem cells differentiate into myeloid immune cells, which produce functional copies of the ARSA gene. This allows for the production of healthy ARSA enzymes, which can degrade sulfatides and prevent MLD progression. Despite being a remarkably effective and life-saving treatment for patients like Teddi, Libmeldy’s steep price tag has sparked ethical concerns regarding healthcare equity and sustainability.
Figure 2: A diagram illustrating the key steps involved in the Libmeldy treatment pathway.
Libmeldy is one example of several recently approved orphan drugs, which are pharmaceutical agents or technologies that target rare diseases like MLD. According to the World Health Organisation (WHO), a rare disease is defined as one that affects fewer than 65 per 100,000 individuals globally. Libmeldy’s pricing, when compared to other similar treatments like Hemgenix (£2.6 million for a one-off dose) and Zolgensma (£1.79 million per dose), doesn’t seem so surprising anymore - naturally, orphan drugs are associated with expensive price tags due to their biological complexity, small patient populations, and significant upfront investment costs.
However, considering the exorbitant research & development (R&D) costs for drugs like Libmeldy, what are the incentives for pharmaceutical companies to invest in rare diseases in the first place? Can government policies truly encourage scientific innovation and fair access over profit?
The reduced potential for profit from orphan drugs can be partially attributed to the devastating Thalidomide drug scandal in the 1950s. Thalidomide was originally sold as a morning sickness medication for pregnant women, but was later found to cause serious congenital deformities in babies. The scandal led to significant global changes in drug approval and safety regulations such as the 1962 Kefauver-Harris amendment in the United States (US), which greatly increased the costs associated with drug development for the pharmaceutical industry.
Historically, pharmaceutical companies have faced various challenges that deter investment in rare disease research, including a limited specialist knowledge of the disease, difficulties in recruiting enough patients for clinical trials, and stringent regulatory procedures. The scarcity of available patients for clinical trials makes it difficult to gather sufficient scientific data - this may delay or prevent regulatory approval for the drug, incurring further costs. Considering that the costs for rare disease treatments must be distributed over a small number of patients, it becomes challenging for pharmaceutical companies to generate enough revenue to justify their investment.
In 1983, the US Congress introduced the Orphan Drug Act, which became the first of its kind to support the development of orphan drugs by offering financial incentives to pharmaceutical companies. Any drug that receives orphan drug designation by the Food & Drug Administration (FDA) is granted market exclusivity for a 7-year period, during which the company has the exclusive right to market the drug. During this period, the FDA cannot approve any other treatments for the same therapeutic indication, which reduces competitive pressures and allows time for pharmaceutical companies to recoup their R&D costs. However, by removing competition, market exclusivity can discourage further innovation and research into treatments targeting the specified indication, creating limited and very costly treatment options for patients. Accessibility and affordability are further lowered for patients without support structures like insurance coverage or public healthcare.
Companies requiring approval for a standard drug have to submit various applications such as a New Drug Application, which is usually associated with a fee of over $2 million. When combined with other application fees for clinical trials, licensing, and marketing authorisation, these costs can accumulate to substantial amounts. However, medicines with orphan drug designation are eligible for fee waivers and reductions, which significantly decrease the associated regulatory costs. Alongside further benefits such as tax credits and free protocol assistance/scientific guidance, the Orphan Drug Act has provided numerous incentives for pharmaceutical companies to invest in rare diseases.
Prior to the Orphan Drug Act in 1983, there were 38 existing orphan drugs or products. However, after the legislation was introduced, thousands have received orphan drug designation and more than 600 have been approved by the FDA. Libmeldy, for instance, was approved by the FDA on March 18, 2024, under the brand name Lenmeldy. Needless to say, the incentives provided by the Orphan Drug Act have helped the US emerge at the forefront of rare disease research. In the following decades, similar policies have been implemented in several other countries and regions including Europe, Singapore, Japan, Australia, and more recently, India and China.
In the US, there are additional mechanisms within the FDA which benefit orphan drug development. A fast track designation can expedite the drug approval process, allowing orphan drugs to be approved based on early indicators from clinical trials (such as biomarkers, laboratory measurements, and radiographic images) even if the long-term clinical outcomes are unknown. Additionally, orphan drugs qualify for priority review by the FDA, a process that shortens the standard 10-month timeline for reviewing a drug application to 6 months.
While these benefits accelerate innovation within rare disease research and help patients access life-saving treatments more quickly, there are several drawbacks. Since accelerated approval is granted based on early clinical evidence, this could lead to oversights in trial design and production. If long-term clinical use reveals health or safety risks, the drug could risk being withdrawn from the market, causing financial losses and treatment disruption for patients.
Due to the lack of sufficient research and the complexity of rare diseases, patients are frequently misdiagnosed and also require care from multiple healthcare specialists and providers. This places significant burdens on healthcare systems that may be unequipped to deal with specific rare diseases, with negative implications for 300 million people around the world who currently suffer from rare diseases.
The pursuit of profit has historically discouraged investment in rare disease research, but policies like the Orphan Drug Act have incentivised pharmaceutical companies to shift their focus and diversify their drug portfolio. However, given that over 90% of rare diseases lack approved therapies, a significant gap in patient care is yet to be addressed by the pharmaceutical industry.
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