Orphan Drugs Could Lose Their Government Subsidies

Subsidies for producers of rare drugs are facing budget pressure
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Treatments for rare diseases are hot properties for drugmakers, who covet the medicines for their tax breaks, through-the-roof prices, and the exclusive marketing rights granted by government regulators. Lately, though, those orphan drugs—so named because they treat rare conditions for which there are no other approved treatments—are being slammed by an unlikely culprit: the European economic slump. As more medicines win approval to treat such diseases, affecting no more than 5 in 10,000 people, Europe’s austerity-conscious governments are applying the same pricing scrutiny to orphan drugs that they do to widely prescribed medicines for heart disease and diabetes. That’s putting the brakes on an $86 billion sector of the pharmaceutical industry that’s been growing twice as fast as the market as a whole.

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