Risks, Benefits in Policy Changes for Developing Rare Disease Treatments

Marisa Wexler, MS avatar

by Marisa Wexler, MS |

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The potential risks and benefits of several policy changes that could affect the landscape of developing treatments for rare diseases like Lambert-Eaton myasthenic syndrome (LEMS) were discussed in a recent white paper.

The paper, “The Next Generation of Rare Disease Drug Policy: Ensuring Both Innovation and Affordability,” was published by the Institute for Clinical and Economic Review (ICER) in collaboration with scientists at the University of Chicago.

In the U.S., a 1983 law called the Orphan Drug Act provides incentives for developing so-called “orphan drugs” — medicines intended for treating rare diseases, defined as conditions affecting fewer than 200,000 people in the U.S. Orphan drug manufacturers are entitled to certain incentives, including tax credits and seven years of market exclusivity if the therapy is approved.

Since the passage of the Orphan Drug Act (ODA), hundreds of treatments for rare diseases have been approved. But for many of the thousands of rare diseases, there are still no treatments that can affect the disease course.

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“Since its passage, the Orphan Drug Act and accompanying scientific advancements have successfully increased the number of treatments available for patients with rare diseases, but tremendous unmet need remains. As a society, we must prioritize ongoing innovation and drug development for rare diseases — particularly those conditions with no available treatments today,” Steven Pearson, MD, president of ICER, said in a press release.

Treatments for the so-called “ultra-rare” diseases have especially lagged, compared to other rare diseases. There is no formal definition for an “ultra-rare” disease, though some proposals suggest that a category could include conditions that affect fewer than 10,000 people in the U.S. By this definition, LEMS, which affects about 400 people in the U.S., would qualify as an ultra-rare disease.

“Treatments for ultra-rare conditions remain particularly elusive, as current market dynamics often make it challenging for manufacturers to bring these products to market,” Pearson said.

One potential way policymakers could incentivize developing treatments for ultra-rare conditions would be to create a formal definition and provide additional economic incentives for companies developing potential therapies. Some advocates have argued this would give lawmakers too much leeway to remove incentives that many believe are still needed for developing treatments for rare diseases more broadly, however.

While the ODA has spurred the development of therapies, they still come at a high cost. The average cost of an orphan drug treatment was $32,000 per patient per year in 2019, and 39% of orphan drugs cost more than $100,000 per year, sparking concerns about affordability, accessibility, and the strain high prices put on healthcare systems.

The paper outlines several policies that could help make rare disease treatments more affordable. For example, outcome-based contracts might allow for pricing based on the amount of measurable benefit that patients get out of treatment, while value-based pricing would calculate a medicine’s cost based on the maximum price that society should be willing to pay, rather than base it on market forces.

The paper notes that there are necessary trade-offs between making medicines more affordable and the financial incentives companies receive to invest in developing rare disease therapies.

“Questions are being raised about whether the health system can sustain access to orphan drugs if current pricing trends continue as the cumulative number of orphan drugs increases. To secure a future in which innovation and affordability are both ensured, policymakers are going to have to consider potential reforms,” Pearson said.

Other policies include reducing incentives for so-called “partial orphans” — therapies that can be used to treat rare diseases but also have applications for more common conditions — and implementing new structures to improve data collection for rare disease therapies.

“Policymakers and stakeholders will need to consider carefully whether these policy reforms would be able to retain the special incentives needed to ensure continued investment in orphan drugs while creating a better balance between the joint goals of broad innovation and affordability,” the researchers wrote. “Views will differ, however, one thing is certain: continued innovation will only prove sustainable and helpful to patients if the costs of the overall effort of innovation can be better managed, both for individual patients and for health systems and society.”