Skip to content
America, for decades, has been the undisputed global leader when it comes to innovative drug development. But this leadership is now at risk.
“We are here today to talk about innovation—both the power of innovation and the threats to it,” that is how Karin Hoelzer, Senior Director of Patient Advocacy at the Biotechnology Innovation Organization (BIO) opened BIO’s June Coffee Chat, “Running on empty: Threats to early-stage drug development.”
The panel of leading patient advocates and health policy experts discussed the impact of price controls in the Inflation Reduction Act (IRA) on biopharmaceutical innovation and patient access. The discussion underscored the urgency of passing the ORPHAN Cures Act, at a time when a number of other harmful policies exacerbate the threat to innovation—including expiration of key drug development incentives such as the Pediatric Priority Review Voucher Program; Most-favorite Nation (MFN) type drug pricing proposals; pharmaceutical tariffs; abuse of the 340B program; lack of pharmacy benefits manager (PBM) reform; and much more.
As Sara Jones, representing the Eosinophilic & Rare Disease Cooperative (ERDC), and a rare disease patient herself, explained: ”To date, more than 95% of the 10,000 plus rare diseases still have no approved therapies—and we patients simply do not have time to wait.” And there are many rare diseases patients waiting for a treatment: Although each rare disease is by definition rare, combined, rare disease patients make up about 25–30 million people in the U.S. alone, or about 1 in 10 Americans.
The unintended consequences of the IRA’s single orphan drug exclusion
Although the law was passed in August of 2022, the IRA has already negatively impacted access to healthcare through more restrictive Medicare Part D formularies, and fundamentally disincentivized investments in post-approval clinical trials. One of the most concerning impacts, however, is much further upstream, and threatens to permanently damage the drug development pipeline. The bill’s drug price controls, compounded by the overly limited scope of the associated orphan drug exclusion, has already slowed, and in some cases, stopped, the development of desperately needed innovative rare disease therapies.
Dr. Jon Campbell, PhD, Chief Science Officer, National Pharmaceutical Council (NPC), and his team studied the effects of this legislation and published their initial results in May 2025 under the title, “Early Signals of the IRA on Orphan Drugs.”
“Developers of drugs with a single orphan designation may be less likely to pursue a second or multiple orphan drug designations in additional rare diseases, because under the current interpretation of the orphan drug exclusion by the Centers for Medicare and Medicaid Services (CMS) that would make the drugs eligible for the drug price negotiation,” he explained.
So, in other words, studying a rare disease drug to determine if it may be able to treat a second rare disease would expose it to the price control process. This has already had very chilling effects on the drug development pipeline.
“Our analysis found that the number of drugs receiving a first orphan designation, both pre- and post-IRA, were largely consistent over time,” said Dr. Campbell. “So that can be considered some good news for patients in terms of medicines that are continuing to be studied and developed.”
However, Dr. Campbell continued, after the passing of the IRA, “The percentage of drugs with the first orphan designation that later received a second designation decreased by about half. So we’re seeing half the medicines that we did before the IRA now go on to get that second designation, and again, that has some really concerning signals for patient access.”
Patients rely on drugs that were developed to treat additional rare diseases
As Jones explained, “The medications for my disease are all the second approved indications. The reality is that it’s so expensive to do drug development, and of course, nine out of 10 drugs fail.“ That is why further developing drugs that have already proven safe and effective for one disease for additional rare diseases is key. “The cost is just prohibitive for people to do extensive drug development on really small populations.”
The vital importance of this follow-on research holds true for many therapeutic areas including many cancers. As Lisa Schlager, representing FORCE: Facing Our Risk of Cancer Empowered, explained: “When PARP inhibitors [a type of targeted cancer therapy that blocks the PARP enzyme, which is involved in DNA repair] were first created, their initial approval was for ovarian cancer patients with BRCA mutations [changes in a tumor suppressing gene].”
According to Schlager, companies decided to further study the drug and eventually got an approved indication for BRCA mutation carriers with pancreatic cancer, meaning that the same innovation now benefited patients with ovarian cancer and pancreatic cancer.
“That probably would not have happened under the current scenario,” she said. “And that’s really disturbing, because when you think about pancreatic cancer and ovarian cancer, these are incredibly deadly cancers. The five-year survival rate is very low, and any chance that these patients have at extending life, we want to see development of those therapies.”
Both Jones and Schlager also emphasized the nearly insurmountable insurance barriers many patients already routinely face when trying to access the treatments they need and that are prescribed to them by their healthcare provider. Without an FDA-approved indication, both agreed, patient access would simply not be feasible.
Repairing the damage: the ORPHAN Cures Act
The panel discussed how the ORPHAN Cures Act will help to ensure products that are exclusively for rare diseases remain protected from negotiation and that the bill clarifies that the timeline used to determine when a drug may become eligible for negotiation begins at the product’s first non-rare disease approval.
Dr. Campbell said: “The timing at which these drugs become eligible for negotiation is also an important aspect. The ORPHAN Cures Act protects vital incentives to develop medicines in rare conditions, and does so, importantly, with evidence.”
The ORPHAN Cures Act is included in the 2025 Budget Reconciliation Bill (HR1: One Big Beautiful Bill Act), which was approved by the U.S. House of Representatives May 22 and is currently under consideration in the Senate.
Why patients are embracing the ORPHAN Cures Act
Patient advocates are embracing the ORPHAN Cures legislation and continue to weigh in with lawmakers—most recently when the bill was included in the Budget Reconciliation package and reintroduced in the Senate as a stand-alone bill with strong bipartisan support.
The data from Dr. Campbell’s study provides critical context and will support these efforts. “We’ve been going in and talking to lawmakers about our concerns and asking them to support the ORPHAN Cures Act,” noted Schlager, “but having the data to back that up now is going to be so much more powerful. I think that’s where we have a great partnership, because we don’t necessarily have the resources to get that data.”
“I always tell people I’m meeting with that these are not just feel-good medications,” said Jones. “These are literally life and death medications. Every single one of these medication and treatment means that someone is going to live longer, and frankly, it’s going to save the health care system money from the downstream impact.”
“I do think that our system tends to look at things, at least from the government perspective and also from the payer perspective, through a very short-term lens,” added Schlager, “and that is problematic because we really need to be looking at the long term. What are the long-term costs? What are the long-term benefits?”
And so, education has become key.
“What we’ve tried to explain is that we think this was a mistake. It was an oversight,” Schlager continued. “Whenever you pass a large piece of legislation with multiple components, there are bound to be nuances or little oversights or errors. With the ORPHAN Cures Act you are basically supporting patients and their ability to access medications and treatments.”
And time is of the essence. “When I come to it with a patient perspective, frankly, it’s heartbreaking,” said Jones. “It’s heartbreaking to know that only 5% of rare diseases have treatments. I mean, that’s unconscionable.”
“The top 5% of rare diseases have treatments available,” Dr. Campbell echoed. “We need to get that to 95 or 100%. How do we get there? We’re likely not to get there by way of additional cuts to innovation and patient access. That is why legislation like the ORPHAN Cures Act is so important to restore and protect the rare disease pipeline.”
