Pharmaceutical pricing, cost containment and new treatments for rare diseases in children

Cost-containment in healthcare spending has become a central issue in public policy and healthcare reform, especially as the affordable care act adds millions of people to public and private insurance rolls. In this climate, longstanding criticism of pharmaceutical pricing has grown sharper, and many in both policy and medicine have characterized the costs of newly developed drugs as both exorbitant and wasteful of scarce healthcare resources. At the same time, pharmaceutical research and development pipeline costs are increasing exponentially. Price resistance poses a significant threat to the development of drugs to treat rare pediatric diseases, where exceptionally high prices are a sine qua non of commercial viability. This article examines the trends in public discussion of high cost drugs and the potential consequences for orphan drug development. We conclude that despite growing public hostility towards high unit costs, drugs that treat rare diseases in children are likely to remain well-compensated and commercially viable.