Rethinking Orphan Drug Policy for Modern Innovation: Kristi Martin, MPA, MA

Since its inception in 1983, the Orphan Drug Act has been a transformative force for the rare disease community, providing life-saving treatments for conditions after it was signed into law by then-President Ronald Regan and advocated for by Sen Orrin Hatch (R, Utah) and Rep Henry Waxman (D, California). Although few treatments for rare diseases existed in 1983—34 to be exact—that number has grown to approximately 800 and 4% to 6% of rare disease today.1-3 Despite this success, Kristi Martin, MPA, MA, principal with Highway 136 Consulting, suggests that the landscape of drug development has evolved, requiring a “reevaluation of the incentives” and definitions that drive innovation.

One significant area of discussion is the definition of an orphan drug and whether its financial benefits should be qualified by a product’s commercial success. For example, if a drug achieves blockbuster status—meaning it generates at least $1 billion in annual revenue—some argue that companies should repay the tax credits they received, as the original intent of the Orphan Drug Act was to support drugs that would not otherwise provide a return on investment. Furthermore, recent policy shifts have reduced the orphan drug tax credit from 50% to 25%, which disproportionately affects smaller companies.

Martin also advocates for a more surgical approach to drug price negotiations. Rather than granting blanket exclusions to all orphan drugs, the government should analyze the specific economics of each drug to better understand the long-term costs. Modern tools, such as real-world evidence and patient registries, can further assist by making translational science more affordable and efficient.

Central to this effort is the National Institutes of Health, which Martin describes as the “backbone for all drug development” because it is willing to take the high-risk research leaps that private industry may avoid. Ultimately, the objective is to return to the original 1983 mindset to identify the exact incentives needed to get to the treatments where none exist.

References

1. Martin K. Revisiting the Orphan Drug Act. The Commonwealth Fund. November 24, 2025. Accessed February 11, 2026. https://www.commonwealthfund.org/publications/issue-briefs/2025/nov/revisiting-orphan-drug-act
2. Asbury CH. The Orphan Drug Act: the first 7 years. JAMA. 1991;265(7):893-897. doi:10.1001/jama.1991.03460070075046
3. Fermaglich LJ, Miller KL. A comprehensive study of the rare diseases and conditions targeted by orphan drug designations and approvals over the forty years of the Orphan Drug Act. Orphanet J Rare Dis. 2023;18:163. doi:10.1186/s13023-023-02790-7