Since its passage in 1983, the Orphan Drug Act (ODA) has led to the approval of 357 drugs for rare diseases and a pipeline of more than 2,100 additional products. Before the ODA, just 10 such drugs existed. Considering that some 7,000 rare diseases affect 20 million to 30 million Americans, federal overseers and patient advocates are anxious to ramp up efforts even more.

But finding a way to give the act a second wind is kicking up dust both scientific and financial. The U.S. passed the ODA as a way to encourage pharmaceutical firms to develop treatments for uncommon illnesses—those affecting no more than 200,000 Americans. The act hinges on financial incentives, including federally funded grants and contracts for clinical trials, a 50 percent tax credit on trial costs and, above all, seven years of market exclusivity starting from the date of drug approval. (Nonorphan drugs receive patent protection, a more cumbersome and potentially less profitable arrangement.) The law has enabled researchers and manufacturers to invest in drugs otherwise unlikely to turn a profit because of the limited need.

But these provisions still do not cast a wide enough net. Peter Saltonstall, president of the National Organization for Rare Diseases, a patient advocacy group, claims that a company recently cited financial reasons for dropping a promising drug for a disease affecting 1,500 people nationwide. (Saltonstall declined to name the disease.) Diseases affecting even fewer people—and there are plenty of them—have even less of a chance.

Tim Coté, head of the Food and Drug Administration’s Office of Orphan Products Designation, acknowledges that there is no easy answer. Coté, whose office decides whether a new product warrants orphan designation, is also troubled by the persistent unwillingness of big pharma to focus on rare diseases. “They frequently come out with press releases saying how important orphan products are to them,” he says. “And they infrequently pass anything substantive over my desk.”

To woo industry giants and ease the process for already committed smaller companies, the 2010 fda appropriations bill has charged Coté’s office with reevaluating the review process for orphan drugs. As Coté explains, alternative statistical models (such as Bayesian design) may allow investigators to shrink trial size without jeopardizing safety and efficacy—basically, developing the ability to glean more insight from fewer data. These designs have yet to be implemented on a wide scale, but Coté emphasizes the fda’s flexibility when it comes to orphan drug studies. The compound PEG-ADA, which treats severe combined immunodeficiency—also known as bubble boy disease—received fda approval based on case studies with just 12 patients.

Coté also hopes to generate interest in orphan product development through new on-site workshops. These sessions, the first of which was held recently in Claremont, Calif., provide practical guidance about the ODA’s financial incentives and how to file an orphan drug application.

Still, cost issues loom. Orphan drugs are expensive to produce, and prices need to be set high to recoup costs within such a small market. The ODA’s exclusivity period also means drugmakers can price drugs at whatever the market will bear. And they can reap huge benefits if an orphan drug becomes a blockbuster, as happened with Botox, initially created to treat two rare conditions that cause eye and neck muscle spasms. In contrast, the European equivalent of the ODA includes a provision for revisiting orphan status in such cases. Similar proposed amendments to the ODA, approved by Congress in 1990, were vetoed by President George H. W. Bush, citing concern that the new measures would stifle innovation.

Coté sees no problem with drugmakers earning an unexpected bonanza from their investment. “The ODA is very single-minded in terms of driving innovation for the treatment of rare diseases,” he says. “If larger populations end up benefiting from those inroads made for rare diseases, then so what?”

Still, orphan drugs, which cost up to $600,000 a year, may end up driving a broader discussion of how much is too much. This is an issue “that society is going to have to deal with,” says Mike Scott, who serves on the board of directors of the International Myeloma Foundation. “And that has commercial implications, research implications and societal implications.”

As Coté sees it, the focus should be on getting orphan drugs made, whatever the cost, to repay a long overdue debt. Rare diseases have led to a host of medical knowledge, including the urea cycle, metabolism and blood clotting. “We owe people with rare diseases some therapies,” he argues, “because most of our understanding in medical science is based on rare diseases.”