The orphan disease issue
It has long been recognised by the healthcare world that thetreatment of rare, or orphan, diseases is a challenge. It was the year 2000 when the European Medicine’s Agency launched its Orphan Designation Programme, to encourage pharmaceutical companies to research and develop medicines for such conditions. The scheme offers incentives such as specialised scientific advice, fee reductions and ten years of market exclusivity for products granted orphan status.
Beyond the regulatory level, a well-recognised challenge for companies launching drugs in orphan disease areas is return on investment. Although the estimated R&D costs for orphan diseases are 27% lower than non-orphan therapy areas,1 the potential market revenue is limited by the far smaller target population. To counteract this, manufacturers often seek elevated annual per patient prices for drugs with orphan status, following a loose rule that the smaller the prevalence of the disease, the higher the price potential for the drug.
The outcome of this is clear in the US market, where the average annual cost for drugs with orphan status is $32,000 per patient per year, and over one third have price tags of more than $100,000 per patient per year.2 But is this happening in markets such as the UK, where cost-effectiveness is both the major driver, and major restraint, of price?
Orphan status and UK price potential
Analysis of seven drugs all with orphan status compared prevalence rates with UK list price (Figure 1). The analysis appears to suggest a clear correlation3, although there are some caveats to make.
Figure 1: The correlation between prevalence and price in the UK
Source: Adapted from Cockerill K, et al. (2017)3
The first caveat is the small sample size of course means the significance of the data is limited, with scope for a more comprehensive and up-to-date analysis. The second, is that the analysis has been conducted at a list price level. In the UK, allowance of ‘free pricing’ at a list price level and the widespread use of confidential patient access schemes means list price often gives very little insight into true drug costs.
However, the data is still striking, suggesting a clear price benefit conferred to drugs with the lowest prevalence in the UK. Unsurprisingly, the highest priced drugs are also those that were assessed in England by the National Institute for Health and Care Excellence (NICE)’s Highly Specialised Technology, or HST, appraisal route. The HST route allows for an elevated cost-effectiveness threshold of at least £100,000 per quality adjusted life-year (QALY) gained; while this does allow for the massive uncertainty surrounding the ICER that can be expected when using data gained in a very small population, it undoubtedly allows manufacturers to set a greater price for their product. What’s more, these benefits will be seen at the net price level.
Conversely, the three drugs with the largest patient population have far lower prices, suggesting they see relatively less benefit on price potential.
What about access?
Orphan drug status may confer a price potential benefit to at least those products that are assessed via the HST appraisal route in England, however further analysis would be needed to demonstrate a significant correlation. But when returning to our initial challenge, that of return on investment, pricing is only half the story. Patient access to drugs with orphan status is also critical to commercial success. In the UK, this is determined by a recommendation from NICE or the Scottish Medicines Consortium (SMC).
The potential benefits of orphan status for access in England was investigated by Remap last year. Our analysis concluded that in fact no benefits are conferred, with Single Technology Appraisals (STAs) of drugs with and without orphan status having a comparable success rate, although a clear exception to this rule is the 100% success rate of HSTs (Figure 2). Of the eight drugs assessed via HST included in our analysis, all had orphan status due to the strict criteria for this route, which includes limiting the technology to an ultra-rare population.
Further to the comparable success rates seen within STAs, drugs with orphan status appraised by either route were more likely to require a financial agreement and took longer on average to be assessed. To see the full analysis, visit our 2021 ISPOR Poster: Does Orphan Drug Status Confer Any Benefits for Products Undergoing HTA Appraisal by NICE in England?
Figure 2: Comparative NICE success rates* of drugs with and without orphan status in both STA and HST appraisals
*The success rate is defined as the proportion of drugs that were recommended by NICE, regardless of any restrictions.
Source: Remap Consulting internal analysis (2021)
In conclusion
Initial analysis of the UK landscape for rare disease suggests that orphan status does not automatically confer benefit in terms of price or access in the UK. However, drugs that qualify for an HST appraisal are a potential exception.
As we have discussed, the target population limits for HST appraisal are stricter than those needed to qualify for orphan status, and this is only part of the HST criteria. The technology must also address a substantial unmet need and target a condition which severely limits the quality or length of life. Most drugs with orphan status will therefore be assessed via STA. Consequently, achieving optimal price and access for these drugs will require a robust pricing and launch strategy.
To find out how Remap can help you maximise the price potential and minimise access barriers for your product in the UK, or to learn more about HST appraisal, contact us.
Sources:
- Berdud M., Drummond M. F., and Towse A. Establishing a Reasonable Price for an Orphan Drug. Office of Health Economics. 2018. Accessed February 22, 2022. https://www.ohe.org/publications/establishing-reasonable-price-orphan-drug#:~:text=Research%20shows%20that%2C%20on%20average,cost%20of%20a%20non%2Dorphan.
- Orphan Drugs in the United States: Rare Disease Innovation and Cost Trends Through 2019. IQVIA Institute. 2020. Accessed February 22, 2022. https://rarediseases.org/wp-content/uploads/2021/03/orphan-drugs-in-the-united-states-NRD-2020.pdf
- Cockerill K, Funderburk A, Hegde S and Gaebler J. White Paper: Orphan Drug Pricing in Europe. Health Advances. 2017. Accessed February 22, 2022