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Illustration: Sarah Grillo/Axios

The past 2 years have seen a surge in the number of prescription drugs approved through a special process that was designed to help foster new treatments for rare diseases.

Why it matters: Rapid scientific advances have helped fuel this rise. But the sheer volume of rare-disease approvals is also sparking a debate about whether they're too easy to obtain, or whether they give drugmakers a way to game the system.

How it works: Federal law gives extra market protection and tax credits to "orphan" drugs — those that treat conditions affecting fewer than 200,000 people. The financial incentives are there to help offset the fact that not many people will buy these drugs.

  • The Food and Drug Administration has approved 174 drugs to treat rare diseases under the Trump administration.
  • The approval pathway has been around for 35 years, but about 23% of all orphan approvals have come in the past 2 years.

The rise of personalized medicine, especially through highly complex biologic drugs, has made it easier to target products toward specific rare conditions.

  • Treating a specific subtype of cancer, for example, is one way to win orphan status. One drug, Keytruda, received 6 orphan approvals over the past 2 years for treating different types of skin and immune-system cancers.

Yes, but: Orphan drugs are often very expensive.

  • And in many cases, orphan approvals and the accompanying financial incentives aren't being given to a newly developed drug, but rather for a new use of a product that's already on the market — including drugs that are already blockbusters.
  • In 2017, the average annual cost per patient of the top 100 orphan drugs — excluding blockbusters with additional orphan uses — was $147,308, while the average cost for the top 100 non-orphan drugs was $30,708, according to EvaluatePharma.

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