Spending on Rare Disease Treatments Such as LEMS Comparatively Low

In the U.S., treatments for rare diseases such as Lambert-Eaton myasthenic syndrome (LEMS) account for only 11% of total medical invoice spending in the country, according to a recent report.

The report, “Orphan Drugs in the United States: Rare Disease Innovation and Cost Trends Through 2019,” is based on research undertaken by the IQVIA Institute, with funding from the National Organization for Rare Disorders (NORD).

“Drug pricing is an issue that affects every American. Our hope is for this data to raise awareness of the critical need for new rare disease treatments, and demonstrate that the overall amount spent on those treatments is small compared to the total drug spend in the United States,” Peter L. Saltonstall, president and CEO of NORD, said in a press release.

There are approximately 7,000 known rare diseases, which affect as many as 30 million people in the U.S. Because these conditions are rare, by definition, economic incentives to develop treatments for them in a free-market setting tend to be scarce.

To address this problem, the Orphan Drug Act was passed in 1983. The law aims to provide economic incentives for companies to develop medications intended to treat rare diseases, commonly referred to as “orphan drugs.” Rare diseases in the U.S. are defined as conditions that affect less than 200,000 people.

“People with rare diseases need help, and the Orphan Drug Act is important for spurring innovation,” Saltonstall said.

An example of an orphan drug is Firdapse (amifampridine), the first and only oral therapy available in the U.S. for symptomatic treatment of LEMS in patients ages 17 and older; it was approved in 2018. It is estimated that LEMS affects about 400 people in the U.S.

As of last year, 564 orphan drugs have been approved to treat 838 rare diseases. From these, 343 are currently approved to treat only a single disease. However, about a quarter of the 447 medications with orphan-only indications have been approved for more than one condition.

According to the report, “multiple orphan indications for the same medicine are increasingly common, particularly in cancer and autoimmune diseases, where research has revealed targeting a single pathway can have an impact on several similar diseases.”

Nearly a third of these orphan therapies were approved for use in the three years prior to the report, which was issued based on 2019 data.

Invoice spending on drugs with orphan indications in the U.S. reached $58 billion in 2019, according to the report. This corresponded to roughly 11% of the total invoice spending ($518 billion).

Products approved for both orphan and non-orphan indications accounted for $140 billion of invoice spending in 2019.

In the report, invoice spending was defined as “the total value of spending on medicines in the United States by pharmacies, clinics, hospitals, and other healthcare providers and includes generics, branded products, biologics, and small-molecules in retail and non-retail channel.”

Since 2010, the amount spent on orphan drugs has increased from 6% to 11%. At the same time, the amount spent on specialty medicines also increased from 25% to 47%. “Specialty medicines” is a broad category that encompasses medications used to treat complex or rare diseases that have certain characteristics, such as being very pricey, needing special handling during transportation, or requiring additional monitoring due to known side effects after use.

According to the report, about three-quarters of spending on specialty medicines is for the treatment of common conditions, not rare diseases.

“While both segments rose, this demonstrates specialty spending is not synonymous with orphan spending,” the report states.

The report also states the cost of orphan drugs are “a concern,” with their average annual cost reaching $32,000, and with more than a third of these medications costing more than $100,000 a year.

Notably, very expensive therapies generally are prescribed more rarely. According to the report, of about 1.8 million people treated with an orphan drug in 2019, 77% received a prescription for a medication that costed less than $100,000 per year.