Three Pillars of Support for Orphan Drug Programs: Individual Valuations, Societal Valuations, and Anonymous Altruism

To identify and describe potential societal and individual sources of support for orphan drug programs.

The Generalized Risk-Adjusted Cost-Effectiveness method shows that acute illness and disability severity increase individuals' willingness to pay for health gains. We develop a social welfare function (SWF) that incorporates individuals' own values, combined with politically or ethically determined weights. We introduce the concept of horizontal equity-that individuals in similar situations should be treated similarly-into the SWF. Finally, we introduce anonymous altruism into individuals' utility functions-the desire to help others, without knowing their identity.

Combined with the empirical link between disease severity and rarity, the Generalized Risk-Adjusted Cost-Effectiveness method demonstrates heightened willingness to pay for health gains for people with rare diseases, leading rational individuals to support orphan drug programs, our first pillar of support. Adding horizontal equity to the SWF further increases societal support for orphan drug programs. Anonymous altruism, focusing most strongly on those in the most-dire circumstances, leads to altruistic support for those with severe disorders. Because innovators' economic incentives lead them to focus on larger markets, anonymous altruistic individuals will increasingly prefer public investments into rare diseases over time, as private markets systematically produce gains for common diseases.

We identified 3 supporting pillars for orphan drug programs: (1) individuals' propensity to prefer treatments for severe diseases; (2) the preference for horizontal equity in our social welfare; (3) anonymous altruism, the desire to help strangers, coupled with market incentives that underserve strangers with rare diseases.