Rare diseases are mostly serious, chronic and life-threatening, associated with both psychological as well as financial burdens. In addition, only a few of them have effective drug treatment available. The European Union (EU) definition of a rare disease is one that affects fewer than 5 in 10,000 people. These affect 6–8% (or about 30 million people) out of the 508 million population of EU countries. So, pharmaceutical companies refrain from investing in them.
This the reason they are called orphan drugs as they are not commercially viable. When medicine is granted an orphan designation, various incentives are provided to the sponsor of the clinical trial.
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