Cost of a Rare Disease Cure

Why does it cost millions to find a treatment?

You don’t have to be a scientist or work in pharma to know that it takes a lot of time and money to develop a new treatment or cure for a long-term health condition. But just how long, how much, and who’s footing the bill?

When it comes to orphan drugs (i.e., those that treat rare diseases), the bill for early-stage research is often footed by parent and patient advocacy groups. It can add up to millions of dollars and take a decade or longer to complete before a pharmaceutical or biotech company steps in. The Cystic Fibrosis Foundation, for example, “funds research to help de-risk the early stages of drug development to attract companies into CF research,” a foundation spokesperson tells Rare Parenting. That’s all before official clinical trials even begin. “It’s a pretty long and arduous process,” says Mike Kelly, Ph.D., the chief scientific officer of CureDuchenne.

Why do parents foot the bill? While big pharma companies usually fund all research stages for common conditions, like Alzheimer’s or diabetes, that’s not the case for orphan drugs—which have a much smaller number of potential patients to buy the drug. “Rare diseases are less appealing to many pharmaceutical companies because they don’t have as much return on investment,” says Allyson Berent, the chief science officer for the Foundation for Angelman Syndrome Therapeutics (FAST). In other words, the costs recouped in selling the drug or drug therapy may not be more than the costs involved in the long process of research and development that created it.

The early stages of drug development

The early stages of rare disease research are usually initiated and funded by advocacy groups, which are most often created by parents. The goal is to both understand the biology of the disease and to cure or treat it, with therapies such as a drug or gene therapy. “They’ve always gone out, found the scientists that are already working on the disease or have been working on a similar disease, and encouraged them by giving them grants to work on their disease,” explains Berent.

Early drug development breaks down into phases:

Basic research

Organizations first need to gather the basic tools required to design and run a study. This involves:

  • Understanding how a disease works (its biology)
  • Identifying potential treatments
  • Funding a cell line (cells that contain genetic information mirroring a specific disease) or organoid (tissue cultures created from stem cells) that can be used for initial lab tests
  • Funding an animal model (an animal, such as mice, that acts as a stand-in for humans in preclinical studies)


With these basics in place, investigators begin testing drugs in human cell lines to understand how they work and whether they impact the disease. This is called “discovering” a drug because you’re discovering if one works. For example, if they’re researching a gene therapy, they’ll test it in a cell line to see if they can affect the gene causing the disease. Further research is required to determine the correct dosage and avoid complications, using toxicity studies.

Preclinical research

If a drug or therapy works as expected in a cell line, researchers may need to refine it. Then they begin testing it in an animal model created to mimic the disease and its symptoms. “We want to see: Does this drug help symptoms, such as seizures? Can we improve the symptoms?” says Berent. When researching using animals, “we can go through one compound maybe in a couple of months,” says Kelly. Drugs or therapies that pass preclinical research are considered the “proof of concept.” Proof-of-concept studies—from basic research to preclinical studies—can take three to ten years and cost $2 million or more, says Berent. “That is where most of the advocacy groups live,” she says.

Natural history

In order to move to clinical trial, other details need to be determined and gathered. These include defining the natural history (stages) of a disease, its most significant symptoms, and how to measure those symptoms. The collated information is presented to regulatory agencies to prove that a treatment has a “meaningful” impact on patients. “The goal is to understand if the outcomes with the treatment would be better than what would happen if you did nothing,” says Berent.

Developing the natural history and its meaningful measurements can take additional time and millions of dollars more.

Lab researchers working with microscopes
Credit: iStock | Peopleimages

“We at FAST have spent over $4 million on understanding biomarkers and outcome measures for clinical trials for Angelman syndrome over the last three years,” says Berent. This work is critical to eventual pharma involvement. Kelly says that “almost every” major biotech and pharma company has programs involved in Duchenne muscular dystrophy, thanks in part to CureDuchenne’s work defining the disease’s natural history. “Once you’re able to do that, then both the regulators, as well as biotech companies, can understand how to do a clinical trial,” he explains.

IND-enabling studies

Once researchers have proof of concept and their natural history in place, they prepare to submit an investigational new drug (IND) application to the U.S. Food and Drug Administration (FDA). It’s typically at this stage that a biopharmaceutical company steps in to help fund the program. They typically take one to three years and cost between $5 million to $20 million, depending on the drug, says Berent. “It’s more money than 99% of most advocacy groups have ever raised,” she says. “Finding that kind of money to run these studies is really hard. Most advocacy groups raise $200,000 a year.”

An IND application permits human clinical trials and requires rigorous studies that prove the drug is safe and has the potential to benefit patients. “There is a whole host of regulatory tests and assays,” says Kelly. For example, sometimes the drug has to be proven safe and effective in at least two species of animals.

IND-enabling studies are very expensive and high-risk. Berent says that pharma companies are increasingly waiting for orphan drugs to make it to phase 1/2 clinical trials before sponsoring research. “A lot of things fail in IND, and that’s a very expensive space that takes a long time…and you might not even get a successful drug,” she explains. “It’s a big commitment.” Some advocacy groups are now sponsoring and running IND-enabling studies by hiring contract research organizations, which recruit and manage teams of scientists to run studies.

To increase the odds that the FDA will approve a drug for research in humans, the organization supporting the research will ask regulatory agencies, such as the FDA (or a corresponding international agency, if the research will be done abroad) for feedback on their plans. “Early engagement with regulators is absolutely essential…getting them to understand the disease burden, and what are meaningful factors to judge success,” says Kelly. “We build relationships with the FDA to make sure they really understand the disease through the lens of the way families and patients see it.”

During IND-enabling studies, the organization supporting the research recruits and trains researchers and negotiates university and hospital contracts for the eventual phase 1/2 clinical trials. Once the IND trials are complete, the organization presents its project to various ethics committees to get the official green light to run the trial in humans.

What happens when the research makes it to clinical trials?

FDA Headquarters - White Oak Campus
Credit: iStock | hapabapa

Once the FDA approves an IND application, it’s tested in humans in what’s called a phase 1/2 clinical trial, which assesses if the drug is safe, has a “meaningful” impact on patients, and what dose to use.

About 33% of drugs in phase 1/2 trials move on to phase 3 clinical trials. Phase 3 trials usually add more patients to further assess safety and dose, and compare whether patients do significantly better with the drug than without it.

After a successful phase 3 trial, the company sponsoring the research can apply for approval from the FDA and regulatory agencies in other countries, each of which has its own requirements.

Because clinical trials are so expensive, they’re usually financially feasible only if pharma, biotech, and/or the government (such as with the NIH and DARPA) steps in. Phase 1/2 trials cost roughly $8 million to $50 million and take two to five years, Berent says. Phase 3 trials take another two to five years and cost $50 to $200 million.

The Orphan Drug Act offers tax incentives for some of this work, making it more appealing for pharma to get involved. The National Institutes of Health (NIH) and the Defense Advanced Research Projects Agency (DARPA) may also step in at this stage, Kelly says. For example, the NIH gave Yale University, in collaboration with FAST and Rush University, a $40 million grant to advance a CRISPR gene therapy (CRISPR is a form of gene editing) for Angelman Syndrome, from proof of concept through phase 1/2 clinical trials, says Berent.

When research pays off

Although getting a drug into clinical trials and beyond requires a lot of fundraising, established advocacy organizations have seen their work pay off. In recent years, the Cystic Fibrosis Foundation has invested more than $200 million annually into research for a cure and often funds multiple approaches to address key issues in CF.

Within just over a decade, their work led to the FDA approval of drug treatments that address the underlying cause of CF—four cystic fibrosis transmembrane conductance regulator (CFTR) modulators for people with certain genetic mutations.

In another example, the SMA (Small Muscular Atrophy) Association has invested more than $60 million into drug development programs, including more than $40 million on drug discovery alone. Their advocacy has resulted in the FDA approval of three new therapies for SMA over the past decade. This includes a gene therapy, which targets the genetic root cause of SMA to stop the progression of the disease. Two other drugs help increase low levels of survival motor neurons (SMN, a protein that our muscles need to function properly) to decrease muscle breakdown in people with SMA and slow disease progression.

Resources and Further Reading

Animal Models and Experimental Medicine, 2018, Swearengen, J.R., Choosing the Right Animal Model for Infectious Disease Research

A Dictionary of Epidemiology, 6th Ed., 2016, Porta, M., Natural History of Disease

U.S. Food and Drug Administration, 2018, The Drug Development Process

U.S. Food and Drug Administration, 2018, Step 1: Discovery and Development

U.S. Food and Drug Administration, 2018, Step 2: Preclinical Research

U.S. Food and Drug Administration, 2018, Step 3: Preclinical Research

Cystic Fibrosis Foundation, n.d., Drug Development Pipeline

Cystic Fibrosis Foundation, n.d., CFTR Modulator Therapies

SMA Foundation, n.d., Drugs in Development: Overview

SMA Foundation, n.d., Drug Discovery Assets: Overview

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