Budget impact analysis of high-priced orphan medicinal products intended for the treatment of rare diseases in China: evidence from a densely populated metropolis of Chengdu.

BACKGROUND: An increasing number of orphan medicinal products (OMPs) are being included in social health insurance schemes, significantly improving access to medicines for patients with rare diseases. However, high-priced OMPs are still not covered, primarily due to health equity controversies and inadequate data systems required for economic evaluation. The aim of this study was to estimate the burden of drug expenditures and the size of the reimbursement budget required for high-priced OMPs from the perspectives of society and healthcare payers. METHODS: The study performed a budget impact analysis using data from multiple sources to estimate the reimbursement budget for high-priced OMPs in Chengdu, a densely populated metropolis in China. The budget analysis consisted of three main elements: the number of patients, the price of drugs, and the simulated policy scenario. By adjusting the combinations of these elements, the budget fluctuations for payers were estimated. Furthermore, the study predicted the budget trend for the next three years to validate its sustainability. RESULTS: The analysis indicated that 98 rare disease patients in Chengdu required high-priced OMPs in 2019. This suggested a projected budget of CNY 179 million for these patients without reimbursement policies, from a societal perspective. Under six assumed policy scenarios, this budget ranged from CNY 32 million to CNY 156 million. Over the next three years, the annual budget was estimated to range from CNY 200 million to CNY 1.303 billion. CONCLUSION: Integration of multi-source data helps to obtain more scientifically reliable results on budget impacts. The study found that the budgetary impacts of high-priced OMPs on society and payers are relatively limited. Health policymakers can choose appropriate reimbursement strategies based on financial affordability among a diverse mix of elements. The results of related studies provided insights for optimizing the allocation of health resources and improving patient access to medications.

Federal Funding for Expensive Drugs for Rare Diseases: How Do We Pick and Choose?

The number of expensive drugs for rare diseases (EDRDs) approved by Health Canada and their contribution to healthcare costs have been rapidly increasing. The federal government has announced a three-year funding commitment of $1.4 billion for EDRDs, but principles need to be developed for how that funding will be allocated, especially in cases where insufficient data are available to guide decision making. Here, we review the role of evidence quality in making choices and draw on the experience from other countries to put forward five principles about how the money should be spent.

Commentary: Which Principles Should Apply for a National Strategy on Rare Diseases?

Lexchin and Sirrs (2024) proposed five relevant principles to guide the use of federal funding for expensive drugs for rare diseases, including funding of outcomes-based risk-sharing agreements (OBRSAs) and proactive commitment and participation in the generation of high-quality evidence in a transparent way. This rejoinder, however, questions whether the federal funding should be used only to buy new drugs or whether it could be used to develop new drugs as well. It also examines what OBRSAs would require in terms of institutional capacities to allow the collection of real-world evidence.

Utilization and affordability of health insurance coverage for rare disease drugs in a first-tier city in Northeast China from 2018 to 2021: a study based on the health insurance claims database.

OBJECTIVE: The accessibility issue of orphan drugs in China is prominent. Based on real-world data from a tier-one city in Northeast China, this study aims to analyze the current usage and affordability of orphan drugs for rare diseases. METHODS: The data was sourced from the health insurance claims data of a certain city from 2018 to 2021, including a total of 16 orphan drugs. The utilization of orphan drugs is assessed using four indicators: frequency of medical insurance claims, medication cost, defined daily doses (DDDs), and defined daily drug cost (DDDc). Affordability is measured using the concept of catastrophic health expenditure (CHE). RESULTS: Between January 2018 and December 2021, there were a total of 2,851 medical insurance claims in the city, with a total medication costs of $3.08 million. Overall, during the study, there was a year-on-year increase in the utilization frequency of individual rare disease drugs in the city, with DDDs rising from 140.22 in 2018 to 3983.63 in 2021. Additionally, the annual medication costs of individual drugs showed a consistent upward trend, increasing from $10,953.53 in 2018 to $120,491.36 in 2021. However, the DDDc of individual drugs decreased from $398.12 in 2018 to $96.65 in 2021.The number of sales and the amount of sales for orphan drugs in community pharmacies have significantly increased. Prior to medical insurance coverage, out of the 16 orphan drugs, 9 drugs had annual treatment costs exceeding CHE for urban residents, and 15 drugs had annual treatment costs exceeding CHE for rural residents. After medical insurance coverage, there were no drugs with out-of-pocket costs exceeding CHE for urban residents, while 8 drugs had out-of-pocket costs exceeding CHE for rural residents. Furthermore, both before and after medical insurance coverage, the four treatment drugs for idiopathic pulmonary arterial hypertension were more affordable compared to the four treatment drugs for multiple sclerosis. CONCLUSION: The usage frequency of orphan drugs in a certain city increased gradually, but the disease burden remained heavy. More policy support should be provided to the priority rare disease populations, and the rare disease medical security and diagnosis and treatment systems should be improved.

HTA criteria adopted in different models of public healthcare systems for orphan drugs: A scoping review.

Access to drugs for rare diseases constitutes a challenge to healthcare systems, especially those with public funding. This study aimed to map and summarize the criteria used by HTA agencies in different healthcare systems to evaluate reimbursement recommendations for orphan drugs. A comprehensive literature search was performed on the databases PubMed, LILACS, Scopus, and Embase and the gray literature (Google Scholar and websites of HTA agencies). Publications addressing the criteria used by HTA agencies in countries with public healthcare systems when evaluating reimbursement recommendations for orphan drugs were included. This scoping review included 23 studies published between 2014 and 2023, mostly consisting of reviews of HTA reports, guidance documents, and original articles. The criteria were mapped from 19 countries and ranked within three models of healthcare systems (National Health System, National Health Insurance, and Social Health Insurance). All models shared concerns about unmet needs and disease nature. In addition, NHS countries (e.g., United Kingdom, Sweden, and Italy) prioritized innovation and system-level impact, while SHI countries (e.g., Germany, France, the Netherlands) usually valued budget impact and employed expedited evaluation processes. This review provides a comprehensive understanding of the general tendencies of each healthcare system model in establishing differentiated criteria to address the challenges posed by the limited evidence and investment in the field of rare diseases.

Towards ethical drug pricing: the European Orphan Genomic Therapies Fund.

An increasing number of novel genomic therapies are expected to become available for patients with rare or ultra-rare diseases. However, the primary obstacle to equal patient access to these orphan genomic therapies are currently very high prices charged by manufacturers in the context of limited healthcare budgets. Taking into account ethical pricing theories, the paper proposes the implementation of a pricing infrastructure covering all European member states, which has the potential to promote distributive justice while maintaining the attractiveness of genomic therapy development.

The EU as a Political Determinant of Global Health: The Case of Research and Development Incentives for Orphan Medicines and Biotechnology.

CONTEXT: The European Union (EU) governs global health through its constituent laws, institutions, actors, and policies. However, it is unclear whether or how these political factors interact to position the EU as a political determinant of global health. METHODS: The authors conduct a case study of the political factors influencing the adoption of the EU's Biotechnology Directive 98/44/EC and Orphan Medicines Regulation 141/2000. FINDINGS: The European Commission (EC) generally framed both of its proposals around economical and biomedical paradigms aligned with the needs of the EU's industry and patients, whereas the European Parliament (EP) contested some of these frames and proposed amendments supporting global access to medical products. The political factors influencing the adoption (in the Biotechnology Directive) or rejection (in the Orphan Regulation) of the EP's amendments include the complementarity between the EP and EC proposals, the EP's power in the intra- and interinstitutional negotiating process, the existence and support of civil society, and the alignment with member state priorities in the Council. CONCLUSIONS: In the late 1990s, the EU was an internally fragmented and politicized player concerning global health matters. These political factors should be considered for a coherent post-2022 EU strategy on global health.

Issues, Challenges and Opportunities for Economic Evaluations of Orphan Drugs in Rare Diseases: An Umbrella Review.

BACKGROUND AND OBJECTIVES: There are significant challenges when obtaining clinical and economic evidence for health technology assessments of rare diseases. Many of them have been highlighted in previous systematic reviews but they have not been summarised in a comprehensive manner. For all stakeholders working with rare diseases, it is important to be aware and understand these issues. The objective of this review is to identify the main challenges for the economic evaluation of orphan drugs in rare diseases. METHODS: An umbrella review of systematic reviews of economic studies concerned with orphan and ultra-orphan drugs was conducted. Studies that were not systematic reviews, or on advanced therapeutic medicinal products, personalised medicines or other interventions that were not considered orphan drugs were excluded. The database searches included publications from 2010 to 2023, and were conducted in MEDLINE, EMBASE and the Cochrane library using filters for systematic reviews, and economic evaluations and models. These filters were combined with search terms for rare diseases and orphan drugs. A hand search supplemented the literature searches. The findings were reported by a compliant Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) flow diagram. RESULTS: Two hundred and eighty-two records were identified from the literature searches, of which 64 were duplicates, whereas five reviews were identified from the hand search. A total of 36 reviews were included after screening against inclusion/exclusion criteria, 35 from literature searches and one from hand searching. Of those studies 1, 27 and 8 were low, moderate and high quality, respectively. The reviews highlight the scarcity of evidence for health economic parameters, for example, clinical effectiveness, costs, quality of life and the natural history of disease. Health economic evaluations such as cost-effectiveness and budget-impact analyses were scarce, and generally low-to-moderate quality. The causes were limited health economic parameters, together with publications bias, especially for cost-effectiveness analyses. CONCLUSIONS: The results highlighted issues around a considerable paucity of evidence for economic evaluations and few cost-effectiveness analyses, supporting the notion that a paucity of evidence makes economic evaluations of rare diseases more challenging compared with more prevalent diseases. Furthermore, we provide recommendations for more sustainable approaches in economic evaluations of rare diseases.

[Translated article] Current situation and evolution of the availability of drugs in the pediatric population in Spain.

OBJECTIVE: To analyze the characteristics of the new medicines approved in the pediatric population in the last 3 years, both those with studies only in the pediatric population and those that extend their indication in this population group, as well as the current situation in relation to their marketing and financing. METHODS: Descriptive observational study of all drugs that include an indication in the pediatric population in Spain (by extension of the indications of drugs already authorized or because they are new drugs that already include an indication in this population group), from January 2019 to March 2022. RESULTS: During the study period, 129 drugs included their indication in the pediatric population. 13.9% of them are not marketed, 46.5% are in a situation of non-financing, under study or without a request for financing, and 4.6% are financed for a specific pediatric subpopulation. 52.7% are original drugs, 4.7% are generic, 38.8% are biological, 3.8% are biosimilar, and 17.8% are orphan drugs. 57.36% of these medicines obtain the pediatric indication due to extension of the indication and 42.64% obtain it because they are new medicines that already include their studies in the pediatric population. CONCLUSIONS: Drugs with authorized indications are increasingly available in the pediatric population and the trend is to extend the indication of authorized drugs to the adult population. However, barriers in terms of financing and marketing need to be expedite and overcome to facilitate access to them.

Five-Year Sales for Newly Marketed Prescription Drugs With and Without Initial Orphan Drug Act Designation.

This study evaluates sales revenue earned in the first 5 years for newly marketed brand-name drugs with and without an initial orphan drug designation.

The actual status of drug prices and adjustment factors for drug price calculation: an analysis of ultra-orphan drug development in Japan.

BACKGROUND: Extremely high prices facilitate drug development for ultra-rare diseases (ultra-orphan drugs). However, various problems arise in terms of healthcare financing and fairness, and the status of ultra-orphan drug pricing remains ambiguous. In this study, we investigated ultra-orphan drug prices in Japan relative to that of other drugs. We examined the relationship between annual expected drug prices and expected sales, and the expected number of patients, for 393 drugs containing new active ingredients for therapeutic use that were listed on the National Health Insurance drug price list in Japan between April 16, 2010 and August 26, 2020. In addition, we compared prices, the drug price calculation method, and price calculation adjustment factors for ultra-orphan and other drugs. RESULTS: Drug prices tended to increase as the expected number of patients to whom the drug was administered decreased; however, this trend diminished when the expected number of patients was less than 1000. On the other hand, the expected sales tended to decrease as the number of expected patients decreased, and this tendency was reinforced when the expected number of patients was less than 1000. The cost accounting method tended to be used for the price calculation of ultra-orphan drugs, but there were no price differences based on the drug price calculation method. Regarding the price calculation adjustment factors, the premium for usefulness tended to be higher for ultra-orphan drugs. The premium for marketability was higher for non-orphan drugs but did not differ from that for orphan drugs, except for ultra-orphan drugs. CONCLUSIONS: The status of drug prices and expected sales differed beyond a threshold of 1000 expected patients, indicating that recovering the development cost for ultra-orphan drugs is difficult. In addition, the higher premium for usefulness for ultra-orphan drugs reflects the largely unmet need of the associated diseases. Scarcity among orphan drugs is not considered for marketability, highlighting the need for a new framework to promote the development of ultra-orphan drugs.

Comparison of US and EU Prices for Orphan Drugs in the Perspective of the Considered US Orphan Drugs Act Modifications and Discussed Price-Regulation Mechanisms Adjustments in US and European Union.

The 2019 worldwide sales of Orphan Drugs were estimated at $136 billion USD, which constituted 16% of the global pharmaceutical prescription market and is expected to grow by 12% in the next 5 years. A better understanding of Orphan Drug pricing may contribute to on-going discussions on Orphan Drug Act (ODA) corrections in US or modifications of price setting mechanisms in EU. The objective of the study was comparison and analysis of the prices of Orphan Drugs in US and EU. All drugs with Orphan Drug status were compared in the US and EU. For the US prices, the US Department of Veterans Affairs (VA) was sourced. The EU List Prices came from six EU countries: Denmark, France, Germany, Greece, Poland, Spain. We found US prices to be higher than the six selected EU countries. The average Price Ratio was 1.64. The prices across EU countries were more homogeneous, while the number of the reimbursed and therefore available to patient medicines varied and was correlated with GDP per capita r = 0.87. Considered implementation of the External Reference Price system in US may generate significant savings in the US but may result in upward pressure on pricing of Orphan Drugs in EU. Centralization of the Orphan Drugs pricing negotiations in EU may prevent such development and offer a win-win opportunity for all involved parties.

Meeting the affordability challenges posed by orphan drugs: a survey of payers, providers, and employers.

BACKGROUND: As an increasing number of orphan drugs are FDA approved, health care payers, employers, and providers are attempting to strike a balance between patient access to innovative treatments and overall affordability. Payers and employers are evaluating how traditional specialty pharmacy management strategies and innovative models can support continued coverage of orphan drugs. OBJECTIVE: To understand how health care stakeholders are meeting the financial challenges posed by the increasing number and cost of orphan drugs and how these strategies are affecting orphan drug acquisition for providers. METHODS: A survey was conducted with payer, provider, and employer decision makers recruited from both AMCP and a proprietary database of market-access decision makers in July and August 2020. Respondents were asked about their experiences and activities in the orphan disease space, including tactics to manage affordability of drugs to treat orphan diseases. RESULTS: Reinsurance was the most commonly utilized strategy to maintain affordability of the benefit for both payers (42%) and employers (55%). Although 31% of payers have adopted gene therapy carve-outs, no employers had done so. Approximately three quarters (76%) of payers believe that limited distribution networks impede their abilities to manage orphan drugs, compared with 4% who believe limited networks improve orphan drug management. For most payers (78%), the decision to cover orphan drugs on either the medical or pharmacy benefit depends on the specific drug. Medical benefit coverage was driven primarily by site-of-care policies (55%) and the lower drug cost of average sales price pricing (50%). Pharmacy benefit coverage was driven primarily by a greater ability to manage the orphan drug (71%) and by rebates (62%). One in 3 (33%) of providers with experience treating orphan diseases acquire orphan drugs exclusively through buy and bill, whereas 10% acquire them exclusively through a specialty pharmacy provider. Buy-and-bill acquisition by providers was driven primarily by improved patient affordability (47%) and 340b pricing (47%). Specialty pharmacy provider acquisition was driven primarily by payer requirements (64%) and reduced administrative burden (64%). CONCLUSIONS: Payers and employers are adopting innovative benefit designs and strategies to cover orphan drugs while maintaining plan affordability. Cost considerations are prominent factors in determining whether orphan drugs will be covered under the pharmacy or medical benefit and how providers will acquire orphan drugs. DISCLOSURES: This research was sponsored by AMCP and PRECISIONvalue. Lopata, Terrone, and Gopalan are employees of PRECISIONvalue. Ladikos and Richardson are employees of AMPC. The authors have nothing further to disclose. This research was presented during the AMCP Partnership Forum "Preparing for and Managing Rare Diseases" held virtually September 8-10, 2020.

The current state of patient access to new drugs in South Korea under the positive list system: evaluation of the changes since the new review pathways.

Objective: This study aims to provide an up-to-date analysis of the current state of patient access to new drugs in South Korea, focusing on the effect of new review pathways for reimbursement. Methods: We analyzed patients' access to new drugs, listing rate and lead time until listing from marketing authorization. New pathways were defined as 'price negotiation waiver,' 'risk-sharing agreements,' and 'pharmacoeconomic evaluation exemption.' Results: The listing rate for drugs increased after the introduction of the new pathways (93.7% vs. 77.9%, p < 0.001). Before the new pathways, the median lead time for listing was 21.0 months (95% CI: 16.9-25.0), while afterward it was shortened to 10.9 months (95% CI: 10.2-11.7) (p < 0.001). Conclusion: Although it has strengthened national health insurance coverage by positively impacting the rate and lead time, the lead time for the oncology and orphan drugs is substantially longer as compared to other drugs. Expanding the eligibility criteria to include non-life-threatening but rare or intractable diseases, and resolving the system's operational issues are still necessary.

The 'Netflix plus model': can subscription financing improve access to medicines in low- and middle-income countries?

At present, pay for prescription models are insufficient at containing costs and improving access to medicines. Subscription financing through tenders, licensing fees and unrestricted or fixed volumes can benefit stakeholders across the supply chain. Pharmaceutical manufacturers can reduce the need for marketing expenses and gain certainty in revenue. This will decrease costs, improve predictability in budget expenditure for payers and remove price as a barrier of access from patients. Inherently, low- and middle-income countries lack the purchasing power to leverage price discounts through typical price arrangements. These markets can realise substantial savings for branded and generic medicines through subscription financing. Procuring of on-patent and off-patent drugs requires separate analysis for competition effects, the length of contract and encouraging innovation in the medicine pipeline. Prices of competitive on-patent medicines and orphan drugs can be reduced through increased competition and volume. Furthermore, pooling expertise and resources through joint procurement has the potential for greater savings. Incentivising research and development within the pharmaceutical industry is essential for sustaining a competitive market, preventing monopolies and improving access to expensive treatments. However, technical capacity, forecasting demand and the quality of generic medicines present limitations which necessitate government support and international partnerships. Ultimately, improving access requires progressive financing mechanisms with patients and cost containment in mind.

Rising Drug Costs for Neurologic Diseases.

The cost of prescription drugs in the United States is rising like never before and has led to an inflection point where clinicians must consider the potential financial damage to the patient and to society related to the more expensive drugs available. Many of the highest-priced drugs are approved as orphan drugs, a legally defined status providing additional benefits to pharmaceutical companies that is intended to incentivize therapeutic development for rare diseases. The Orphan Drug Act has been a great success since it was enacted in 1983, resulting in the development of many innovative, life-changing, and even lifesaving drugs; however, high drug prices place patients at risk for personal bankruptcy, prescription abandonment, and higher rates of hospitalization. These negative consequences have become more widespread and severe because some companies exploit pricing via the market exclusivity granted to them under the provisions of the Orphan Drug Act. As more and more companies develop these drugs, the cost to society increases as does the capacity to tolerate unjustified prices. The societal effects of drug pricing must be considered through the prism of opportunity costs; that is, what benefit is lost by choosing to spend on one thing instead of another. Clinical- and economic-based analyses from independent groups such as the Institute for Clinical and Economic Review can help physicians understand the value of drugs (ie, the benefits relative to cost). When prescribing a high-priced medication, clinicians should discuss the drug's value and the associated opportunity cost with patients and have an open discussion about patients' ability to financially tolerate the treatment.

Modifying the Criteria for Granting Orphan Drug Market Exclusivity.

OBJECTIVES: To examine policy options to deny orphan drug exclusivity after drugs exceed a target population of 200 000 across all orphan indications (combined prevalence threshold) or once drugs receive a nonorphan approval (market approval threshold). METHODS: Retrospective analysis of drugs with 2 or more orphan approvals from 1983 to July 01, 2017 examining prevalence of orphan indications and approval years of orphan and nonorphan indications. Characteristics of drugs crossing either threshold are described. A budget impact analysis of Medicare and Marketscan® claims databases estimated potential savings from generic or biosimilar entry as a result of foregone market exclusivity periods determined by these policies. RESULTS: Out of 86 drugs with 2 or more orphan approvals, 21 drugs would be denied orphan drug exclusivity periods under the prevalence threshold and 18 drugs would be denied orphan drug exclusivity periods under the market approval threshold. Drugs with orphan approvals after 2010 were more likely to be denied orphan drug exclusivity. In 2017, Medicare could have saved about $2 billion on 8 drugs under the prevalence threshold policy and $1.3 billion on 12 drugs under the market approval threshold policy). Private insurers could have saved $814 and $919 million, respectively. Over half of the savings would come from 9 drugs that first entered the market for a nonorphan indication. CONCLUSIONS: Modifying the criteria for granting orphan drug exclusivity would affect a small number of orphan drugs but could generate large savings through increased competition. Other incentives such as grants or tax credits for clinical trials could be explored to incentivize research for new orphan indications for drugs that crossed either threshold.

One drug to treat many diseases: unlocking the economic trap of rare diseases.

There are two major problems with the development of therapies for rare diseases. First, among over 7000 such diseases, the vast majority are caused by genetic defects and/or include neurodegeneration, making them very difficult to treat. Second, drugs for rare diseases, so-called orphan drugs, are extremely expensive, as only a small number of patients are interested in purchasing them. This results in the appearance of a specific economic trap of rare diseases; namely, despite high biomedical, pharmaceutical and technological potential, the development of new orphan drugs is blocked by the economic reality. The purpose of this work was to find a potential solution that might resolve this economic trap of rare diseases. A literature review was conducted, and a hypothesis was formulated assuming that the use of one drug for the treatment of many rare diseases might overcome the economic trap. We provide examples showing that finding such drugs is possible. Thus, a possible solution for the problem of developing orphan drugs is presented. Further preclinical and clinical studies, although neither easy nor inexpensive, should verify whether the hypothesis regarding the possibility of unlocking the economic trap of rare diseases is valid.