What hinders Indian pharma companies from making drugs for rare diseases

India has already played a major role in global healthcare by making generic medicines affordable and widely accessible.

Understanding the Scale of the Problem

• A rare disease affects only a small number of people individually, but the collective disease burden is substantial.
• Around 8,000 rare diseases are known worldwide.
• In India, 1,004 rare genetic disorders have been reported so far.
• Since each individual rare disease has a very small patient population, pharmaceutical companies have historically had limited commercial incentive to invest in drug development.
• Medicines developed specifically for such conditions are therefore known as “orphan drugs.”

How Other Countries Addressed the Issue: Orphan Drug Act

• The US Orphan Drug Act, 1983 encouraged rare-disease drug development through:
  • Tax incentives
  • 7 years of market exclusivity
  • Research grants
  • Regulatory fee waivers
• Impact: US orphan-drug approvals increased from 38 before the Act to 1,122 by 2022.
• Japan, Australia and the European Union later adopted similar frameworks.
• However, small patient markets keep prices extremely high, often $100,000 (around ₹1 crore) or more per year, requiring insurance or government support.

Two Core Challenges in Drug Development

1. Small Patient Population

• Rare diseases have very few patients, making it difficult to recruit a sufficiently large clinical-trial cohort.

2. Defining Trial Endpoints

• It is difficult to determine clear and measurable indicators of treatment success for very rare conditions.

Other Challenges

• Affordable small-scale manufacturing
• Maintaining high quality standards
• Reliable distribution and supply

A Benefit-Sharing Model for Pricing

• Indian patients involved in drug development should also benefit from the resulting medicines.
• India could seek greater control over pricing for the domestic market and Global South, while firms retain pricing flexibility elsewhere.
• This aligns with the benefit-sharing principle under the WHO Pandemic Agreement.
• With the US and China expanding rapidly in rare-disease drugs, India can position itself as a major research and manufacturing partner.

India’s Manufacturing Strength

• India is a major global producer of generic medicines.
• It supplies about 47% of US generic prescriptions.
• India has the largest number of US regulator-approved manufacturing facilities outside the US.
• Indian firms supply around 15% of US biosimilars.
• India also has capacity to manufacture advanced therapies such as CAR-T cell therapy.

Regulatory Advantage

• Under Rule 101 of the New Drugs and Clinical Trials Rules, 2019, CDSCO may waive fresh Indian clinical trials for certain drugs already approved in specified foreign countries.
• This can reduce approval time, cost and duplication.
• Greater regulatory transparency and clearer guidelines are still needed.

Underlying Policy Approach

• The objective should not be to permanently subsidise pharmaceutical companies.
• Instead, government support should reduce the initial commercial risk of research and manufacturing.
• Once sufficient demand, manufacturing capacity and procurement mechanisms are established, orphan-drug production should become commercially sustainable on its own.