The development of orphan drugs, those used for the safe and effective treatment, diagnosis or prevention of genetic and rare diseases or disorders, is on the upswing.
In the past five years, 61 orphan drugs were approved. This is the largest for any five-year period since 1983, when Congress passed the Orphan Drug Act, a measure that gives financial incentives to encourage companies to develop drugs and biologics for rare diseases. The legislation includes tax credits to defray the costs of clinical trials and provides for fast-track FDA approval and market exclusivity. It's important because, before its passage, drug companies were weighing the financial viability of researching and developing these drugs. The Orphan Drug Act led to the development of hundreds of new drugs to treat a variety of conditions.
With orphan therapies on the rise, more people with rare diseases and genetic disorders have more treatment options designed to help them lead healthier, more productive lives.
But the issue of orphan drug therapies isn't without controversy, mainly because of the price of these drugs. A single prescription can cost upwards of $100,000 per year, sometimes much more than that. With the cost of health insurance being debated everywhere from the halls of Congress to the water cooler in offices nationwide, the value of orphan therapies is getting some pushback from those who allege that the cost is too great when so few people reap the benefits.
We disagree with that.
“Orphan therapies are expensive but exciting because, when prescribed appropriately, they offer treatment for disease states that would otherwise have no treatments at all," says Adam Syfrett, PharmD, MBA, Clinical Pharmacy Strategist at HID. "I say this because the goal of all medications is to lead to healthier patients. Orphan drugs are unique in that they are for very specific and rare disease states. Per the FDA, these are drugs for disorders that impact 200,000 people or fewer in the U.S., or drugs that would not be able to recoup the cost of developing and marketing the therapy."
Rare diseases are oftentimes genetic, while some can be acquired by environmental and toxic conditions. Although the conditions themselves are rare and disparate, the people suffering from them share the same type of frustrations as other patients across the healthcare landscape, including isolation, difficulty getting an accurate diagnosis and general lack of hope for therapies that could lead them to healthier lives.
Further, although the term "orphan drugs" is designated for diseases that affect fewer than 200,000 people nationwide, that's just for one rare disease. Some 6,800 rare diseases are affecting 13 million Americans. That's a significant population.
Orphan drugs matter because they bring hope — and improved health — into the lives of millions of Americans. And isn't that what medicine is supposed to do?
The bottom line for pharmacy spend?
For individuals suffering from rare diseases, the new orphan drugs offer hope, and health care systems are working to provide patients with the best possible care as pharmaceuticals continue to advance. With those advances, however, come increasing expenditures. Favorable economic and regulatory factors — including shorter timelines for development and better chances for approvals — are likely to continue fueling the power of orphan drugs to command high prices in the marketplace.
Preparation is the key to maintaining appropriate utilization and increased patient outcomes and must stand at the forefront of payors as the research and development of orphan drug therapies continues to increase. It is imperative that plans adopt appropriate clinical measures, such as ensuring prior authorization criteria that prevents inappropriate prescribing and misuse, as well as utilization reports to identify and monitor trends and patterns in the use of orphan drugs and the health outcomes of patients with rare diseases.
Finally, we recommend plans ensure actuarial resources are engaged to forecast future cost and how that financially impacts both plan and patient. Very few, if any, plan sponsors have the resources to carry the burden of cost associated with these breakthrough therapies that provide often life-saving medicines.