Orphan drugs are the most expensive drugs in America. They are products that treat rare conditions or diseases. Orphan drugs are manufactured for a limited population of patients. The U.S. Food and Drug Administration (FDA) has a specialized office for orphan drugs that provides incentives for their development. It is difficult to get drug companies to focus on these rare diseases since there is a small market for the therapies. Drug companies argue that the astronomical prices for orphan drugs are justified due to the significant development costs for the products.

As scientific advances are made in the pharmaceutical industry, the prices of specialized medications have skyrocketed. The amount of money spent on pharmaceuticals is also increasing exponentially. It is estimated that prescription drug sales will reach $1.3 trillion by 2018. In fact, Congress held hearings in 2014 and 2015 on the high prices of drugs. It remains to be seen whether Congress will take any action on this issue.

Soliris

Soliris, manufactured by Alexion Pharmaceuticals, is the most expensive drug in the United States, with a cost of around $537,000 per year. The drug treats paroxysmal nocturnal hemoglobinuria as well as atypical hemolytic uremic syndrome. These are both very rare diseases with no other drugs for treatment available. This allows Alexion to charge very high prices for the drug.

The drug is effective, giving patients with this disease life spans of 10 to 15 years after diagnosis. The company has realized substantial revenue growth recently, going from $1.12 billion in 2012 to $2.21 billion in 2014.

Naglazyme

Naglazyme is a drug treatment for Maroteaux-Lamy Syndrome, a progressive disease that can cause organ enlargement and skeletal abnormalities. The drug had a cost of $485,000 in 2014. The drug received FDA approval in 2005. It is manufactured by BioMarin Pharmaceutical. Biomarin also manufactures Vimizim for the treatment of Morquio A Syndrome. This drug has a hefty price tag of $380,000 per year. It is an enzyme drug that is given weekly to patients with the rare genetic disorder.

Biomarin is developing an experimental drug called drisapersen for the treatment of muscular dystrophy. An FDA decision on the drug is anticipated in 2015 or 2016. The company sold its cancer project drug talazoparib to Medivation for $410 million up front with another $160 million in milestone payments and additional royalties.

Biomarin has a market cap of $16.63 billion as of October 2015. The company has increased its revenues annually since 2010. Net revenues were $548 million in 2013 and grew to $750 million in 2014, an increase of 36%. The company was founded in 1997 and went public in 1999.

Elaprase

Elaprase is another one of the most expensive drugs in America, with an annual cost of $375,000. The drug treats the very rare disease Hunter’s syndrome. Somewhere around 500 Americans have the disease, which causes infections, breathing problems and brain damage.

Elaprase is manufactured by Shire PLC. Shire has a market cap of over $40 billion. The company produces a number of other drugs, including Fosrenol for the treatment of chronic kidney disease in predialysis patients and the genetic therapy Firazyr for the treatment of acute hereditary angioedema. Its most popular drugs are Adderall XR and Vyvanse, which are used in the treatment of attention deficit disorder. The company earned over $428 million alone from Vyvanse in the second quarter of 2015.

The company has had steady revenue growth since 2011. Shire earned revenues of $3.16 billion in 2013 and $3.66 billion in 2014. The company’s share price has gone up along with revenue, increasing over 150% since 2013. It pays a very small dividend of 0.13%.

In August 2015, Shire announced it was seeking a merger with Baxalta, a spinoff company from Baxter. Baxalta focuses on treatments for hematology and rare diseases. The company estimates it could create a revenue stream of $20 billion by 2020 if the deal is completed.

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.