Context:

India transformed global healthcare by making generic drugs affordable. Experts argue that the next frontier for India is to make rare-disease drugs accessible.

With a streamlined regulatory pathway and government procurement, India could build a globally competitive rare-disease pharmaceutical sector.

What’s in Today’s Article?

• Understanding the Scale of the Problem
• How Other Countries Solved This: The Orphan Drug Act?
• India's Current Support System — and Its Limits
• The Two Core Challenges in Drug Development
• India's Manufacturing Strength
• What the Government Should Do?

Understanding the Scale of the Problem

• Each rare disease affects very few people, but collectively the numbers are staggering.
• There are around 8,000 rare diseases worldwide, cumulatively affecting hundreds of millions of people.
• In India, 1,004 rare genetic disorders have been reported so far.
• Because patient numbers for any single disease are tiny, pharmaceutical interest has historically been limited — hence the term "orphan drugs."

How Other Countries Solved This: The Orphan Drug Act?

• To overcome industry hesitancy, several governments introduced incentives.
• The US Orphan Drug Act (1983) offered tax incentives, seven years of market exclusivity, grants, and regulatory fee waivers.
• Impact: Before the Act, only 38 relevant drugs had been approved in the US. By 2022, this rose to 1,122 approvals.
• Japan, Australia, and the European Union later adopted similar legislation.
• The catch: Because markets remain small, companies set very high prices. A year's treatment can cost $100,000 (₹1 crore) or more — putting it out of reach without insurance or government support.

India's Current Support System — and Its Limits

• The Indian government supports rare disease patients with up to ₹50 lakh total for treatment.
• This is often insufficient to cover even a year's costs, forcing patients toward crowdfunding.
• Example: In mid-2025, ₹9 crore was crowdfunded for gene therapy for a 16-month-old child in Kolkata.
• Nearly 4,000 children are listed on a Government of India crowdfunding platform, with cumulative annual treatment costs exceeding ₹9,000 crore.
• Existing drugs cover only about 5% of rare diseases — most patients have no suitable drug at all, even at high cost.

The Two Core Challenges in Drug Development

• Finding a patient cohort large enough for clinical trials.
• Determining trial endpoints — what "success" means for a very rare condition.
• Beyond approval, affordable, high-quality small-scale manufacturing and distribution remain major hurdles.

India's Advantage: A Natural Trial Ground

• India's demographics make it uniquely suited for rare-disease research.
• With a population exceeding 1.4 billion, India has large absolute numbers of patients even for very rare conditions.
• High rates of endogamy in certain communities raise disease prevalence further. For instance, beta-thalassemia prevalence is 10.5% in specific ethnic groups, versus 3.7% in India's general population (2023 review).
• The Indian diaspora's gene pool carries unique mutations across ethnicities, adding further research value.
• The Gap
  • Indian patients rarely participate in international orphan-drug trials, despite this potential.
  • Analysts suggest government-fostered collaboration between foreign companies and local organisations — similar to India's approach in chip manufacturing — and inviting multinational firms to set up rare-disease drug-development centres with patient groups.

A Benefit-Sharing Model for Pricing

• Experts propose a key principle: Indian patients participating in drug development should be beneficiaries of the resulting drugs, not just data sources.
• Proposal: India should be allowed to decide the price of drugs sold domestically or in the Global South, while companies remain free to set prices elsewhere.
• This echoes the benefit-sharing concept discussed under the WHO's Pandemic Agreement, where pathogen information shared globally must lead to fair, equitable access to resulting drugs and vaccines.
• US and Chinese firms are already racing on rare-disease drugs, with China leveraging patient access and low-cost manufacturing. Western companies may find India an attractive collaboration partner too.

India's Manufacturing Strength

• India is already the "pharmacy of the world" for generics.
  • India fills 47% of US generic prescriptions.
  • It has the largest number of US-regulator-approved manufacturing sites outside the US.
  • Indian firms supply 15% of all biosimilars sold in the US.
  • Indian facilities now produce CAR-T therapy — a personalised cancer treatment — to international standards.
• Regulatory shortcut: Under Rule 101 of the New Drugs and Clinical Trials Rules, 2019, the CDSCO allows drugs already approved in six specified countries (including the US and UK) to skip a fresh Indian clinical trial before regulatory approval.
• This is a strong incentive for manufacturing such drugs locally — though the authors call for greater transparency and guidance documents to ease the application process.

What the Government Should Do?

• Analysts propose a policy package modelled on Production-Linked Incentive (PLI) schemes:
  • Tax incentives for investing in orphan drug manufacturing.
  • Production-linked incentives for approved orphan drugs.
  • Support for technology transfer with national laboratories.
  • Advance Market Commitments (AMCs) — government pre-committing to buy a certain output at a set price.
  • Distribution through Centres of Excellence on Rare Diseases, the Central Government Health Scheme, and Pradhan Mantri Bhartiya Jan Aushadhi Kendras.
  • Incentives for exporting to low- and middle-income countries.
• The Underlying Philosophy: The goal shouldn't be simply subsidising companies, but de-risking initial investment enough to make orphan drug manufacturing commercially viable on its own.