Orphan drug pricing may warrant a competition law investigation

Abstract

EU legislation offers an exclusive marketing period as an incentive for companies to develop drugs for rare diseases. But pricing for orphan drugs hinders access and may warrant a competition law investigation, say Jonathan C P Roos, Hanna I Hyry, and Timothy M Cox

Cost-effectiveness of Enzyme Replacement Therapy for Fabry Disease

“…The present study highlights the enormous costs associated with orphan drugs as was recently also pointed out by others [8,9]. Compared to previously reported international data on costs per QALY, ranging from US $300,000 to UK £250,000 per QALY, the present results should put (i) the high unit costs of ERT itself, (ii) the process of drug development with perhaps a lack of sufficient early assessment of a drug's clinical potential, and (iii) the cooperation between manufacturers and governmental agencies on the agenda.…”

“…Both received an orphan drug status and have been authorised under "Exceptional Circumstances", which implicates a continuing lack of comprehensive clinical trial data due to the rarity of the disease. With the increasing number of orphan drugs and their extreme costs [8], there is need for more transparency of pricing and reimbursement of orphan drugs, including costeffectiveness analyses [9]. So far, in the UK, effectiveness and cost-effectiveness of enzyme replacement therapies for Fabry disease and mucopolysaccharidosis type 1 have been investigated [10].…”

Proposed ‘Grant-And-Access’ Program With Price Caps Could Stimulate Development Of Drugs For Very Rare Diseases

“…Both industry analysts and patient advocates have expressed concerns about the pricing of some orphan products, whose annual costs can reach about $400,000 per patient. 19,20 As of 2009 eighteen drugs initially approved for orphan indications had reached blockbuster status-that is, they had annual sales surpassing $1 billion-within their seven years of market exclusivity. In addition, 40 percent of blockbuster drugs that received orphan drug approval had previously been launched under the same brand name for nonorphan indications.…”

Competing for the treasure in exceptions

“…Once approved, pricing for orphan drugs appears to be chiefly the manufacturer's call [13]. The founding principle of orphan drug legislation is access to therapy and annual maintenance charges for Ceredase (about $150,000 for an adult), attracted criticism-not least because its development depended on charitable and tax-payer investment.…”