27 February 2017 - Pharma companies are under increasing pressure to reduce the cost of new treatments.

Drugs for rare diseases have become big business in recent years. That is because they have been able to command very high prices — often hundreds of thousands of dollars a year per patient — even as cash-strapped healthcare systems try to crack down on costs.

Drug makers must charge a lot, they say, because rare or “orphan” drugs target conditions that each affect fewer than 200,000 people — so they must recoup their outlay from far fewer patients. In the US, it has also been possible for drug makers to resist pressure from insurers to lower prices because of the very small customer base, which means that the aggregate cost to health insurers has been low compared to drugs for more common conditions such as cancer and hepatitis.

Read Financial Times article