Patient access to orphan drugs

ABSTRACT

Background: The Orphan Drug Act of 1983 has been a success in terms of spurring development of orphan disease treatments. However, rising orphan drug spending coupled with increasing numbers of orphan approvals have led to greater payer sensitivity with respect to reimbursement. Given the relatively high per-patient costs of many orphan drugs, reimbursement is widely regarded as the most important determinant of patient access.

Methods: In this study, we examined patient access by analyzing payer reimbursement of orphan drugs approved in the U.S. from 2000 through 2016. Subsequently, we analyzed reimbursement by 20 leading payers of this subset of orphan approvals.

Results: The median payer in our sample of 20 leading payers covered 93% of orphan approvals, which represented a decrease compared to previous studies.

Conclusions: As per unit costs of orphan drugs and numbers of approvals increase, there is a trend towards imposition of more barriers to patient access. However, growth in U.S. orphan drug spending is expected to plateau. Accordingly, besides cost-effectiveness, payer formulary management considerations should encompass a broader concept of the value of orphan drugs, which would include the nature of the disease being targeted and whether the drug addresses an unmet need.

KEYWORDS:

• Orphan drugs
• Orphan Drug Act
• reimbursement
• patient access
• formulary management tools
• cost-effectiveness
• budget impact

Authors’ contributions

Joshua P. Cohen, data collection, analysis, and write-up; Josephine Awatin, data collection and analysis.

Declaration of interest

The authors have no 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. This includes employment, consultancies, honoraria, stock ownership or options, expert testimony, grants or patents received or pending, or royalties. Peer reviewers on this manuscript have no relevant financial or other relationships to disclose

Notes

1. Our study analyzed commercial payer management of orphan drugs, while the National Organization for Rare Disorders (NORD) study [7] and Faden and Huskamp [6] examined Medicare Part D plans. There is overlap, given that all commercial payers in our sample also operate Medicare Part D plans.

2. Specialty drugs are defined by the Centers for Medicare and Medicaid Services as therapeutic agents costing more than $600 per patient per month.

3. Medicare reimbursement rates for physician-administered Part B drugs (Average Sales Price + 6%) are often used as benchmarks [14]. Payers generally do not limit coverage of physician-administered drugs, though they do use formulary management tools, such as prior authorization, quantity limits, and health-care setting restrictions for prescribing.

4. This may reflect pushback in recent years by patient advocates and others who deem step therapy a particularly restrictive condition of reimbursement.

5. It is important to note that patient cost sharing is often blunted by patient assistance programs offered by drug manufacturers.

Additional information

Funding

We are very grateful for the funding support we received from Pharmaceutical Research and Manufacturers of America (PhRMA).