Finsights Blog

Show Your Care for Rare

The theme of this year’s Rare Disease Day is research. Using the hashtag #ShowYourRare, brave souls from all over the world are sharing their stories of the as many as 7,000 rare diseases that 300 million people globally and 30 million in the US have to learn to live with every day unless we can bring cures to market. Aggregated like that, if 10% of the population are impacted, rare is not that rare. If 80% of these diseases are generically inherited and 50% affect children (according to PhRMA’s 2016 report) most of us are even more motivated to see promising new therapies helping patients.

Successful research and getting approval is only part of the battle. To make care happen, we need to get these innovative products to sites of care and address their needs for support services and financial access.

Since the Orphan Drug Act was signed into effect in 1983, 487 new orphan drugs and a further 181 new indications and expanded indications have been approved (based on our analysis of the FDA data). The last few years have seen high approval rates for orphan drugs.  In 2017, 18 of 46 novel drugs approved by the FDA were to treat rare and orphan diseases, and this doesn’t include the new and expanded indications, formulations and dosage forms for previously approved drugs. 28 of the approvals used one or more expedited pathway including priority review (28), accelerated approval (6) fast track (18) and breakthrough therapy (17).

The response to the stimulus of the Orphan Drug Act has been so strong that it’s been brought into question. Gottlieb, the FDA Commissioner, questioned the incentives in an interview in December 2017. A Kaiser Health News investigation found that of 450 approved orphan drugs, 70 were former mass market drugs and 80 won approval for more than one indication. Our analysis of the FDA data found 688 approvals with 48 These concerns no doubt influenced the recent tax bill which halved the Orphan Drug Research Credit to 25%. While this may be somewhat offset by the lowering of the corporate tax rate to 21% this reduction will presumably have some dampening effect on research efforts, despite presumably remaining the best incentive available for drug research.

New targeted and precision therapies create more opportunities for orphan indications. If you’re only treating breast cancer for patients with a specific genetic mutation, the patient population can shrink below 200,000 earning orphan status. Many oncology drugs have launched into orphan indications and then expanded into other indications over time. For example, Imbruvica (ibrutinib) was first approved in 2013 for Mantle Cell Lymphoma, and has since received an additional 4 indications and 3 expanded indications with AbbVie projecting 2020 sales of $5.5B. As more precision medicines come to market, a higher percentage of drugs will be considered orphan drugs.

With small patient populations, drug prices are necessarily higher so that manufacturers can recoup the cost of bringing drugs to market. Evaluate Pharma’s 2017 Orphan Drug Report set the average price of the top 100 orphan drugs at $140,442 in 2016, with a median cost 5.5 times the price of non-orphan drugs, and orphan drugs are projected to reach $209B globally by 2022, 21.4% of global prescription sales and 55% of the European pipeline. At the same time only 5% of rare diseases have an approved treatment according to NORD. Imagine what the percentage of total prescription sales if 10 or 20% of rare diseases had an approved indication. No wonder payers are concerned about the potential impact of orphan drugs on plans. And that means we should all be concerned about how these new therapies will get to the patients that need them.

Manufacturers launching new orphan drugs need to work carefully with payers, pricing, co-pay assistance and foundations to minimize access hurdles.  It’s no longer sufficient to assume that payers will approve orphan drugs and patients will get access. As the price goes up, particularly for self-administered drugs with Medicare Part D patients, the out of pocket can rapidly become an insurmountable barrier depending on the plan. For example, if we assume the annual price of therapy is $140,000, a patient might need to cover $5,000 in out of pocket to get through the donut hole, plus an additional 5% of the drug cost beyond the donut hole, which would take the total to more than $12,000 annually. Foundations have become an essential way to cover these out of pocket costs. New co-pay accumulator programs raise the potential for commercial patients in these plans to be hit with unexpected out-of-pocket obligations mid-year (particularly where manufacturers have set an annual limit on co-pay programs). Smart manufacturers are closely analyzing longitudinal de-identified patient data and working with patient support service hubs and specialty pharmacies to assist at risk patients. To some extent manufacturers are chasing their tail as prices go up and out of pocket amounts go up. More must be done to close the gap, effectively reducing net revenues.

The good news is it seems like every week there is a new promising announcement that will help one small group of rare disease patients. And there are ways for manufacturers to help facilitate access for those patients. The reality is that, if you build it, they will want it, but they can’t get it without your help by way of a carefully designed distribution, dispensing and services strategy.

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