I don't mean to disagree with you in spirit, but profitability is pretty closely entwined with probability. So companies are chasing solving problems that more people have, even if it's for the wrong reason.
As the benefactor of an extremely rare disease, it's not exactly unfair when you look at it from a societal view. If you solve a higher probability problem, you are helping far more people.
The real tragedy isn't the allocation of the resources we have spare, it's that so many of our resources are not spare because billionares and corporations have hoarded it.
Without changing the percent of allocation, and only changing input resources by capturing it back from billionaires as taxes, we could be helping far more people including super rare diseases.
And if you take a step back and look at Covid spending, what it was spent on, and how much fraud was involved, it's absolutely maddening that the government isn't instead spending money on solving actual problems its constituents face. We basically just shoveled free money at anyone who claimed to have a business, to no real effect.
I don't know how much longer it will last but the US government invests significant resources into rare diseases in order to improve outcomes where the normal market wouldn't otherwise support the r&d.
A metric other than profitability seems like a terrible target for private research which (outside of a charity or cause-driven org) needs to justify its expenses.
In the US alone, we have dozens of grants, programs, and funding sources for things like orphan/rare diseases.
Those seem like pretty good ideas of the kind of targets we should have. But as you mention, those seem to only be considered for cause driven places or charities.
For a private company, QOL for someone doesn’t pay the researcher, laboratory chemical supplier, or lab’s landlord. Money does.
You won’t get a cure or treatment if you can’t discover it, get it approved, or distribute it, all of which costs (a lot) of money.
Inevitably, the bigger the quality of life improvement or more significant the impact = more money, so those measures are already indirectly considered.
It’s only incredibly rare diseases that aren’t receiving active research efforts.
The reason why it's less profitable is because it will help less people. If profitability didn't dictate what is researched, widespread diseases would get less researched and rare diseases - more researched, which would be a net negative.
IMO the issue isn't discovery and research, it's development. Unless companies foresee a good return for buying/licensing/etc rights to treatments, discovered drugs with potential just sit there.
What sucks is when drugs are deliberately not brought to market, but kept in portfolios, because it might impact sales of other existing cashcows. For example, Gilead has a history of staggering the release of new drugs only once their patents expire for similar drugs they already have on the market.