Steven Simoens PhD
Research Centre for Pharmaceutical Care
Katholieke Universiteit Leuven, Belgium
Hospital Pharmacy, University Hospitals Leuven, Belgium
Multiple criteria need to be considered when taking market access decisions on orphan drugs. These criteria include disease rarity and severity, availability of alternative health technologies, impact of orphan drug on disease, single or multiple indications, clinical evidence and manufacturing complexity. Multi-criteria decision analysis not only allows the consideration of such criteria, but also the degree to which individual orphan drugs attain each criterion. Such an approach would increase the transparency and consistency of market access decisions for orphan drugs, taking into account societal preferences about the criteria and their relative importance for rare diseases.
In Europe, an orphan drug is defined as a medicinal product intended for a rare disease or a medicinal product that would not be developed without incentives because its sales are unlikely to generate sufficient return on investment.(1) Examples of rare diseases include Lambert-Eaton myasthenic syndrome, nephropathic cystinosis and Wilson’s disease. These are life-threatening or chronically debilitating diseases with a prevalence of 50 out of 100,000 individuals or fewer.
When considering market access, societal stakeholders need to consider the specific features of orphan drugs for rare diseases:(2)
- Orphan drugs tend to target life-threatening diseases for which there may be no alternative health technology. For example, designated or established pharmaceutical treatment is available for only 10% of rare diseases(3)
- Society may be willing to give up cost-effective treatments for common diseases in return for the provision of treatment for patients with a disease for which no alternative health technology exists(4,5)
- Given that they tend to be very expensive, orphan drugs have a considerable impact on patients’ own healthcare expenditures if they would have to incur the drug costs themselves. It also follows that the budget impact of orphan drugs is substantial: the orphan drugs budget is expected to increase to 4.6% of total pharmaceutical expenditure in Europe by 2016(6)
- Market access of orphan drugs conforms to the principle of social solidarity in which vulnerable groups receive support. In this respect, European Union legislation states that “patients suffering from rare conditions should be entitled to the same quality of treatment as other patients”.(1)
Therefore, the European Union has introduced measures to stimulate the development of orphan drugs, and many Member States have in place domestic incentives and policy measures to facilitate market access of orphan drugs.
Multi-criteria decision analysis
To take account of the specific features of orphan drugs in market access decisions, there appears to be a role for multi-criteria decision analysis, which allows decision makers to consider multiple dimensions.(7) Under this approach, an expert panel defines the relevant decision-making criteria and their relative importance. Each criterion needs to be measurable, so that the degree to which an orphan drug attains the criterion can be assessed. The scores of an orphan drug on the different criteria are aggregated with a view to calculating the overall performance of the orphan drug. Decision-makers then allocate resources based on the ranking of drugs according to their performance scores until the budget is exhausted.(8)
Given that R&D costs need to be recouped from a small number of patients, prices of orphan drugs tend to be high. In our opinion, this also implies that prices of orphan drugs used to manage rare diseases with a higher prevalence should be lower than prices of orphan drugs used to manage rare diseases with a lower prevalence. This hypothesis is consistently corroborated by the literature: several studies have found an inverse association between orphan drug prices and the prevalence of the rare disease.(14)
Some orphan drugs are used to manage multiple rare/common diseases. Examples include: imatinib, which has five designated orphan indications in the European Union; bosentan, an orphan drug for the treatment of the rare condition, pulmonary arterial hypertension, which is also effective in the treatment of the common disease of heart failure; and sildenafil, the initial indication for which was erectile dysfunction, later extended to include the rare diseases of pulmonary arterial hypertension and chronic thromboembolic pulmonary hypertension.(14) Therefore, we believe that, despite the fact that the sponsor needs to develop a new dossier for every new indication, the price of orphan drugs should reflect the combined prevalence of all indications. However, to date, national pricing (and reimbursement) procedures consider the application of an orphan drug for a specific indication in its own right, without taking account of other current or planned indications.
Alternative health technology
According to European Union legislation, a requirement to qualify as an orphan drug is that no satisfactory method exists to diagnose, prevent or treat the disease or, if such a method exists, that the medicinal product will be of significant benefit to those affected by that disease.(1)
In the absence of an alternative health technology, an orphan drug benefits from market power and the manufacturer has an incentive to charge the maximum price for the orphan drug that the market is able to bear. In this respect, a Belgian study has shown that the award of orphan designation status (that is, the attribution of orphan status to a drug) raises drug prices.(15)
However, the market power of an orphan drug can be weakened by the availability of similar substances with comparable ATC codes.(16) This is the case for nearly all orphan drugs on the European market. Also, the European Union can give marketing authorisation to another orphan drug that offers a significant benefit to patients suffering from the rare disease as compared to the original orphan drug. For instance, four orphan drugs (Revatio®, Tracleer®, Ventavis® and Volibris®) with significant benefit are currently approved to manage primary pulmonary hypertension in Europe, together with three non-orphan medicinal products (Adcirca®, Flolan® and Remodulin®).
We argue that the availability of other products and competitive pressures need to be taken into account in orphan drug pricing and reimbursement. In this respect, an analysis of annual costs per patient in Belgium indicated that 13 orphan drugs with an alternative health technology had lower costs than nine orphan drugs without an alternative, although this finding was not statistically significant.(14)
We propose that market access procedures also need to consider repurposing, that is, the practice whereby a drug for a common disease (for example, ibuprofen for inflammatory joint disorders) is later shown to be effective in treating a rare disease (for example, patent ductus arterioles).(17,18) For repurposed drugs such as everolimus (Certican®) for the common disease of prophylaxis of organ rejection in allogeneic kidney and heart transplantation, and Afinitor® for the rare diseases of advanced renal cell carcinoma after failure of treatment with sunitinib or sorafenib, and subependymal giant cell astrocytoma associated with tuberous sclerosis, evidence of the effectiveness of the repurposed drug for the rare disease was published in the literature prior to the application for orphan designation. This implies that the manufacturer does not need to produce new evidence or set up extensive new clinical trials. Therefore, we argue that the costs of R&D and of market access of the repurposed drug are lower than those of a new orphan drug, and this needs to be reflected in the price of the repurposed orphan drug.
A study examined Belgian hospital prices per defined daily dose of drugs for common diseases that were subsequently repurposed for rare indications.(19) When comparing drugs that had the same pharmaceutical form for the common and rare indications, the data showed that prices for the rare indication nearly equaled those for the common disease for cladribine and tadalafil, but also that price differences between the common and rare indications ranged from a twofold difference (for example, aztreonam, sildenafil) to a 200-fold difference for histamine. This study also calculated that there was, on average, a 13-year gap between publication of evidence supporting the effectiveness of the medicine for the rare indication and the application for orphan designation. It can be argued that pharmacies need to consider validated compounding preparations of such repurposed orphan drugs instead of purchasing the branded products. A Belgian analysis compared hospital purchase prices of repurposed orphan drugs with compounding production costs: the variation ranged from a 2.5-fold difference for mercaptamine bitartrate to a 148-fold difference for aminolevulinic acid hydrochloride.(20)
Added clinical benefit
A number of factors make it difficult to demonstrate the added clinical benefit of an orphan drug, such as problems to recruit a sufficient number of patients and medical centres for clinical trials, difficulties in setting up a study comparing the orphan drug with a relevant alternative health technology, or the need to halt a trial early on ethical grounds when an interim analysis demonstrates clinical superiority of the orphan drug in terms of an intermediate outcome measure.(21,22) As a result, the added clinical benefit of an orphan drug can be assessed differently by national pricing and reimbursement authorities.
For instance, orphan drugs are automatically classified by the Belgian Drug Reimbursement Committee as so-called ‘class 1’ drugs, implying an added clinical benefit of the orphan drug as compared to a relevant alternative. However, this recognition of added clinical benefit does not always translate into reimbursement: reimbursement was refused for six orphan drugs in Belgium. In France, the Transparency Commission appraises the improvement of medical benefit (ASMR) of the orphan drug as compared to a relevant alternative and assigns the orphan drug to one of five ASMR stages. The majority of orphan drugs fall in stages I or II, implying an added clinical benefit compared to a relevant alternative, but also that some orphan drugs are not classified as adding clinical benefit in stages III, IV or V. Furthermore, the ASMR classification of the added clinical benefit assigned by the Transparency Commission does not always correspond with the evaluation carried out by Prescrire journal. Nevertheless, all orphan drugs are automatically fully reimbursed in France.
We argue in favour of introducing multi-criteria decision analysis in European and national market access procedures for orphan drugs. Such an approach would allow the explicit consideration of the specific features of orphan drugs in the decision-making process, such as: the rarity and the severity of the disease (that is, the unmet need); the availability of alternative health technologies; the impact of the orphan drug on the disease (that is, whether the drug’s objective is symptomatic, palliative, or to modify the disease); the use of an orphan drug in a single or in multiple indications; the level, quality and uncertainty of clinical evidence and research undertaken; and the manufacturing complexity involved in producing the orphan drug.(2) Our proposal to apply multi-criteria decision analysis is motivated by the observations that multiple features of orphan drugs matter when taking market access decisions and that not all orphan drugs meet these criteria to the same degree. We believe that such an approach would increase the transparency and consistency of market access decisions, taking into account societal preferences about the characteristics and their relative importance of orphan drugs for rare diseases.
- Market access needs to consider the characteristics of using orphan drugs such as disease rarity and severity, availability of alternative health technologies, impact of orphan drug on disease, use of orphan drug in single or multiple indications, the clinical evidence and research undertaken, and manufacturing complexity.
- Not all orphan drugs attain each of these criteria to the same degree.
- Multi-criteria decision analysis allows decision makers to consider the degree to which an orphan drug attains these criteria in market access decisions.
- Such an approach would increase the transparency and consistency of market access decisions taking into account societal preferences about the characteristics of orphan drugs and their relative importance.
- European Commission. Regulation (EC) No 141/2000 of the European Parliament and the Council of 16 December 1999 on orphan medicinal products. Official Journal of the European Communities 2000;L 18/1.
- Morel T, Simoens S. Coverage of orphan drugs: working with uncertainty? In: Staginnus U, Ethgen O, editors. The Future of Health Economics.2012;Gower Publishing.
- Tambuyzer E. Rare diseases, orphan drugs and their regulation: questions and misconceptions. Nat Rev Drug Discov 2010;9(12):921–9.
- Nord E. The trade-off between severity of illness and treatment effect in cost–value analysis of health care. Health Policy 1993;24(3):227–38.
- Ubel PA, Loewenstein G. Distributing scarce livers: the moral reasoning of the general public. Soc Sci Med 1996;42(7):1049-55.
- Schey C, Milanova T, Hutchings A. Estimating the budget impact of orphan medicines in Europe: 2010-2020. Orphanet J Rare Dis 2011;6:62.
- Simoens S. What is the value of medicines? 1st edn.2010;Leuven.
- Baltussen R, Niessen L. Priority setting of health interventions: the need for multi-criteria decision analysis. Cost Eff Resour Alloc 2006;4:14.
- OrphaNet. Diseases listed by decreasing prevalence or number of published cases. OrphaNet 2012. www.orpha.net/consor/cgi-bin/Education_Home.php?lng=EN (accessed 21 May 2012).
- European Commission. Register of designated Orphan Medicinal Products. European Commission 2012. http://ec.europa.eu/health/documents/community-register/html/alforphreg.htm (accessed 21 May 2012).
- WHO Collaborating Centre for Drug Statistics Methodology. Anatomical Therapeutic Chemical (ATC) index. WHO Collaborating Centre for Drug Statistics Methodology;2010. www.whocc.no/atc_ddd_index/ (accessed 21 May 2012).
- Merck index. The Merck index online. Merck Index;2012.http://library.dialog.com/bluesheets/html/bl0304.html (accessed 21 May 2012).
- Westermark K et al. European regulation on orphan medicinal products: 10 years of experience and future perspectives. Nat Rev Drug Discov 2011;10(5):341–9.
- Simoens S. Pricing and reimbursement of orphan drugs: the need for more transparency. Orphanet J Rare Dis 2011;6:42.
- Picavet E, Dooms M, Cassiman D, Simoens S. Drugs for rare diseases – orphan designation status influences price. Appl Health Econ Health Policy 2011;9(4):1–5.
- WHO Collaborating Centre for Drug Statistics Methodology. Anatomical Therapeutic Chemical classification system for drugs. World Health Organisation;2009. www.whocc.no (accessed 21 May 2012).
- Ekins S et al. In silico repositioning of approved drugs for rare and neglected diseases. Drug Discov Today 2011;16(7–8):298–310.
- Food and Drug Administration. The Rare Disease Repurposing Database (RDRD). Food and Drug Administration;2011. www.fda.gov/ForIndustry/DevelopingProductsforRareDiseasesConditions/HowtoapplyforOrphanProductDesignation/ucm216147.htm (accessed 21 May 2012).
- Simoens S et al. What price do we pay for repurposing medicines for rare diseases? BMJ 2012 Jan 4. www.bmj.com/rapid-response/2011/11/27/re-orphan-diseases-which-ones-do-we-adopt (accessed 21 May 2012).
- Simoens S et al. Are some orphan drugs for rare diseases too expensive? A study of purchase versus compounding costs. Drugs Therapy Persp 2011;27(10):24–6.
- Clarke JT. Is the current approach to reviewing new drugs condemning the victims of rare diseases to death? A call for a national orphan drug review policy. CMAJ 2006;174(2):189–90.
- Joppi R, Bertele V, Garattini S. Orphan drug development is not taking off. Br J Clin Pharmacol 2009;67(5):494–502.