Saving orphan drug legislations: misconceptions and clarifications

Abstract

Orphan-drug sales are rocketing, with revenue expected to total $176 billion annually by 2020. As a share of the industry, orphan drugs now account for close to 15% of all prescription revenue globally (excluding generics) and the sector is set to grow at more than twice the rate (10.5%) of the overall prescription market (4.3%). But this success also equates to costs – borne by individual patients and cash-strapped health systems. Prices for orphan drugs can be 19 times higher than for other medications, hampering access for patients, many of whom are children. With ever more such expensive drugs reaching the market, the situation is becoming unsustainable and putting the survival of the orphan drug legislation itself at risk. Here the authors consider why there has been an increase in orphan drug designations, how orphan drug prices are set and regulated, before discussing proposals for how changes which could save the legislation.

Keywords:

• orphan drug
• reimbursement
• monopoly
• pricing
• law
• orphan disease
• Gaucher
• price setting

Key issues

• The orphan drug sector is outperforming the regular drug sector.

• Orphan drug prices are often set at very high levels and do not tend to reduce much despite new market entrants.

• Some drugs are designated orphan whilst deriving most of their revenue for non-orphan indications.

• Drug pricing is thought not to be controlled effectively by payers (the EU governments).

• Drug costs are set to rise and will become unsustainable for societies.

• Survival of the orphan drug legislation is at risk if a solution is not found.

• Payment based on clinical efficacy will likely become the norm.

• Shifting the cost of rare disease treatments to a more collective payment system will avoid discrimination because of rarity.

Financial & competing interests disclosure

HI Hyry and JCP Roos have attended symposia and received hospitality or funding towards attendance or related research from the UK Gaucher Association, Susan Lewis Memorial Fund, Helen Manuel Foundation and the European Working Group on Gaucher disease. JCP Roos has also received support from the National Institute for Health Research. TM Cox has received support from the UK Medical Research Council and the National Institute for Health Research as well as unrestricted research grants from Genzyme and Shire. TM Cox also advises pharmaceutical companies engaged in the orphan disease setting, including Actelion, Genzyme, Shire, Amicus Therapeutics, and Protalix Biotherapeutics, receiving speakers’ fees and travel costs. The authors have no other relevant affiliations or financial involvement with any organization or entity with a financial interest in or financial conflict with the subject matter or materials discussed in the manuscript apart from those disclosed.

ORCID

Jonathan C. P. Roos http://orcid.org/0000-0002-7605-6209