Prices of drugs to treat rare diseases soar

Drugs approved to treat rare disorders have been spiking in price over the past few years, with a new report from the insurance industry raising questions about their affordability.

America's Health Insurance Plans, the leading lobbying group for the industry, released a report on the costs for orphan drugs. Last year, nearly half of all drugs approved by the Food and Drug Administration were orphan drugs, which are intended to treat rare diseases.

A company that pursues an orphan drug receives extra market exclusivity, a tax credit for research and development costs and a waiver for the $2.4 million filing fee, the report said. The incentives are designed to entice drug makers to produce products for ailments with lower patient populations, which don't make a large profit.

However, it appears that the drugs are being used for other types of treatments, which is mostly responsible for the big price increases. After the orphan drug gets approved, a drug maker can expand sales through getting a new indication for the drug and keep the price, the report said.

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