A rare disease is defined by the Orphan Drug Act of 1983 as a disease or condition that affects less than 200,000 people in the United States. More than 7,000 diseases fit this definition, affecting a total of 30 million people or about 9% of the US population. More than 80% of rare diseases are genetic in origin. Rare diseases account for nearly 13% of all adult cancers, over 200,000 cancer cases.

Previously, treatments for patients with rare disease were “orphaned” because there was not enough demand and/or financial incentive to continue biopharmaceutical development or production. An “orphan drug” is defined as any drug in development or produced to treat patients with rare conditions.

The Orphan Drug Act provides financial incentives and grants for clinical trials of drugs, biologics and devices for use in patients with rare diseases or conditions. Between 1973 and 1983, <10 treatments were approved, but since 1983, >600 drugs and biologics for patients with rare diseases have received US Food and Drug Administration (FDA) approval.

Other FDA designations are used to approve medications used to treat patients with rare diseases. The novel drug approval process is a pathway for innovative products that serve a previously unmet medical need or significantly help to advance patient care and public health. In 2020, 31 of the 53 (58%) novel drug approvals within the FDA’s Center for Drug Evaluation and Research (CDER) were for rare diseases.

Economic Impact

The Orphan Drug Act significantly impacts the development of therapeutics available and affordable for people with rare disease. Repurposed drugs, already FDA-approved with a known safety profile, are an efficient means of providing treatment. With expanding label indications, repurposed drugs are more rapidly available to patients and have already been evaluated by payers. For a new molecular entity, the capitalized cost of an orphan drug is half that of a non-orphan drug, resulting in a 43% lower out-of-pocket cost.

Patients with a particular rare disease may show limited overall economic impact. When combined, rare diseases have an enormous influence on health economics. In 2019, the estimated total economic burden of 379 rare diseases was $966 billion, based on prevalence of 15.5 million patients, including:

  • $418 billion in direct medical costs of which $48 billion was attributed to prescription medications
  • $548 billion in non-medical and indirect costs, of which $38 billion was spent on healthcare services not covered by insurance


Despite the incentives for drug development, challenges continue when it comes to rare diseases. Among these challenges is finding a medical center or registry that has an adequate number of patients with the rare disease to conduct research and outcomes analysis. Especially in rare pediatric diseases, multi-center clinical trials frequently are required for sufficient safety and efficacy data.

The prevalence of rare diseases is highest (11.3%) among patients 65 years of age and older. For patients 18-64 years of age, the prevalence of rare diseases is 4.6%, and 1.8% for patients <18 years of age.

Within the US National Institutes of Health (NIH), the Office of Rare Diseases Research (ORDR) coordinates programs including the Rare Diseases Clinical Research Network (RDCRN), the Rare Diseases Registry Program (RaDaR), and the Genetic and Rare Diseases Information Center (GARD). In conjunction with the NIH and the European Commission, the International Rare Diseases Research Consortium coordinates international research efforts.

While all these entities conduct clinical trials, obtaining information regarding the natural history or current standards of care for a rare disease remains difficult.

Unlike the NIH Surveillance, Epidemiology, and End Results (SEER) Registry Program for cancer, the NIH RaDaR program only provides guidance regarding the initial set up and maintenance of high-quality registries, but does not manage multiple rare disease registries. Instead, rare disease registries are generally managed by foundations.

Real-World Data

Recognizing these challenges, recent FDA guidance includes the use of real-world data (RWD) to support orphan drug submissions, and the use of natural history studies as external control groups for single-arm interventional trials.

We explore the vast healthcare ecosystem with STATinMED RWD Insights, our robust, licensed, all-payer medical and pharmacy claims RWD, sourced directly from claims clearinghouses managing transactions between payers and providers. Updated monthly with data from all 50 states encompassing over 300 million patient lives, we have current, relevant RWD with details about Medicare Fee-for-Service, Medicare Advantage, Medicaid and commercial insurance coverage.


Rare diseases are not so rare in RWD. Use of orphan drugs has advanced the treatment for patients with rare diseases, affecting nearly 10% of the US population (economic impact of nearly 1 trillion dollars per year).

Accounting for variability in access to care based on payer and healthcare infrastructure, our claims data population in STATinMED RWD Insights can help to monitor the outcomes and identify gaps in available therapeutics and healthcare resources for those with rare diseases.


As the authority in real-world evidence, STATinMED has partnered with the life sciences biopharmaceutical industry for over 14 years, with a proven track record of success based on hundreds of combined experience years and over 900 peer-reviewed publications.

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Alves VM, Korn D, Pervitsky V, et al. Knowledge-based approaches to drug discovery for rare diseases.  Drug Discovery Today.  2021;  In press. 

American Cancer Society. Surveillance Research Special Section: Rare Cancers in Adults. Cancer Facts & Figures. 2017;30-39.

Genetic and Rare Diseases Information Center; National Center for Advancing Translational Sciences; US National Institutes of Health.  FAQs about Rare Diseases. Accessed 11/4/21

Jayasundara K, Hollis M, Krahn M, et al. Estimating the clinical cost of drug development for orphan versus non-orphan drugs. Orphanet J Rare Dis. 2019;14:1-10.

Rare Diseases Registry Program (RaDaR); National Center for Advancing Translational Sciences; US National Institutes of Health.  Accessed 11/4/21.

US Food & Drug Administration; US Department of Health and Human Services. Novel Drug Approvals for 2021. Accessed 11/4/21.

US Food & Drug Administration; US Department of Health and Human Services.  Rare diseases at the FDA. Accessed 11/4/21.

Woodcock J, Maynard J. Rare Disease Day 2021: FDA shows sustained support of rare disease product development during the public health emergency.  US Food & Drug Administration.  Accessed 11/4/21.

Wu J, Wang C, Toh S, et al. Use of real-world evidence in regulatory decisions for rare diseases in the United States – Current status and future directions. Pharmacoepidemiol Drug Saf. 2020;10:1213-1218.

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