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A new report from America’s Health Insurance Plans (AHIP) finds that pharmaceutical companies have manipulated federal law to raise the prices of orphan drugs 26-fold the past two decades, from an average price of $7,136 in 1997 to $186,758 in 2017.
Orphan drugs treat rare medical conditions, often referred to as orphan diseases, and would not be profitable to produce without government assistance. Congress passed the Orphan Drug Act in 1983 to encourage pharmaceutical manufacturers to invest in treatments for these rare diseases and conditions while making them affordable.
Pharmaceutical companies have responded by making these drugs 25-times more expensive than traditional drugs, with an average price of $123,543. They also achieve a gross profit margin of more than 80 percent, compared with an average of 16 percent for the rest of the pharmaceutical industry.
AHIP’s study notes that these drugs are being prescribed in increasing numbers and for conditions that could be treated with other therapies. In 2017, seven of the top 10 best-selling drugs were orphan drugs widely prescribed for non-orphan indications and off-label uses.
“Every patient deserves to get the medications they need at a cost they can afford, but drug makers are gaming well-intentioned legislation to generate outsized profits from drugs intended to treat a small population of patients with rare diseases,” Matt Eyles, president and CEO of AHIP, said in a release. “Now more than ever we need lawmakers to revisit the Orphan Drug Act. We must balance the incentives to develop new treatments for rare diseases while preventing drug makers from exploiting the system with launch prices that defy gravity, blocking competition, and increasing their prices on the same products year after year.”
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