Rare diseases currently afflict an estimated 30 million Americans. The National Institutes of Health defines these uncommon conditions as those that affect fewer than 200,000 people in the United States (1). Pharmaceutical companies are often uninterested in developing treatments for diseases that affect a small proportion of the population, causing this research to fall to startups with significantly less funding, inevitably halting drug discovery (2). Consequently, only five percent of rare diseases have an FDA-approved treatment (3) and the U.S. Congress labeled these uncommon disorders as orphan diseases.
Funding initiatives—coupled with recent advances in genetics and drug discovery—has facilitated major progress in the development of orphan drugs (4). In 1983, the U.S. Congress passed the Orphan Drug Act (ODA) which provided manufacturers federal grants, tax credit incentives and marketing exclusivity for conducting orphan disease research. The ODA has funded over 600 clinical studies (5) and a paper published in 2015 found that without the orphan drug tax credit component of the ODA, there would be a one-third reduction in orphan drug investment (6). The 250 FDA-approved orphan drugs sponsored by the ODA currently treat 13 million Americans (7). Inspired by the success of the ODA, similar legislation has been enacted around the world.
Because 80 percent of orphan diseases are genetic in nature (8), the expanded use of next-generation sequencing and gene expression therapies has made orphan diseases accessible targets for genetic-based therapies. The development of efficient high-throughput drug screening technologies also contributes to lowering costs and saving time. Transthyretin amyloid cardiomyopathy (TTR-CM), an orphan disease caused by the buildup of misfolded protein in the heart, highlights the potential of effective drug screening techniques. TTR-CM had no treatment until a small molecule that failed FDA testing for a neurodegenerative disease was found to improve the life expectancy of patients with TTR-CM by 30 percent (9).
Funding orphan drug research also contributes to discoveries for non-orphan diseases. An example of this is the immunosuppressive drug Remicade®, which was initially approved as a treatment for Crohn’s disease, a rare condition. More recently, Remicade® has been adopted as a mainstream treatment for several more common conditions, including rheumatoid arthritis (10).
Although the rate of orphan disease drug discovery has increased, the out-of-pocket cost for patients has as well. Public outcry against pharmaceutical price gouging—such as Mylan’s 400 percent markup of the price of EpiPens (11) and Martin Shkreli raising the price of a life-saving AIDS treatment by 5,000 percent (12)—has spurred a debate regarding accessible medication. Unfortunately, because of the small number of individuals impacted by rare disorders, instances of price hikes for orphan diseases do not receive significant attention.
To avoid backlash from patients, orphan drug manufacturers place orphan drugs on the market in a higher price bracket rather than raising prices over time. In fact, from 1997 to 2017, the mean launch price of orphan drugs increased 26-fold. An analysis conducted by America’s Health Insurance Plans explains that “most efforts to contain skyrocketing drug costs focus on price increases for drugs already on the market. [...] What has received less attention is the fact that drugs are increasingly launched at higher prices” (10).
Orphan drugs are currently 25 times more expensive for consumers than traditional drugs. Strikingly, the out-of-pocket clinical cost for manufacturers per FDA-approved orphan drug is actually 43 percent cheaper than for non-orphan treatments (4). This inverse relationship between manufacturing costs and market price puts life-saving medications out of reach for many. Furthermore, insurance does not always cover orphan drug costs. Patients with rare diseases often need to see out-of-network specialists (13) and because there are few alternative treatments, patients have limited negotiating power. U.S. insurance providers have also shifted from fixed copayments to coinsurance for most orphan drugs, where out-of-pocket expenses are a percentage of the drug’s cost, resulting in a higher burden on patients (14). Consequently, an analysis conducted in 2017 found that the percentage of orphan drugs covered by leading payers is decreasing (15).
The path from drug development to filling prescription bottles is complex and sometimes counterintuitive. Despite this, the fact remains that high market launch prices and convoluted insurance policies make orphan drugs widely unaffordable. Federal investment in the research of orphan diseases has led to the discovery of ground-breaking treatments for disorders historically ignored by the scientific community. The next step should be ensuring that these therapies are accessible for all patients.
References:
(1) “FAQs about Rare Disease” United States Department of Health and Human Services. 30 November 2017. https://rarediseases.info.nih.gov/diseases/pages/31/faqs-about-rare-diseases
(2) Miseta, Ed. “How Can Government Promote Orphan Disease Research?” Clinical Leader, 6 December 2018, https://www.clinicalleader.com/doc/how-can-government-promote-orphan-disease-research-0001/.
(3) Slade, Anita, et al. “Patient reported outcome measures in rare diseases: a narrative review.” Orphanet Journal of Rare Diseases vol. 13,1 61. 23 Apr. 2018, doi:10.1186/s13023-018-0810-x
(4) Jayasundara, K., Hollis, A., Krahn, M. et al. “Estimating the clinical cost of drug development for orphan versus non-orphan drugs.” Orphanet Journal of Rare Diseases vol 14, 12 . 2019, doi:10.1186/s13023-018-0990-4
(5) National Organization for Rare Disorders. “Trends in Orphan Drug Costs and Expenditures Do Not Support Revisions in the Orphan Drug Act: Background and History” 2017, https://rarediseases.org/wp-content/uploads/2018/05/NORD-IMS-Report_FNL.pdf.
(6) Biotechnology Industry Organization, National Organization for Rare Disorders. “Impact of the Orphan Drug Tax Credit on treatment for rare diseases” 17 June 2015, https://rarediseases.org/assets/files/white-papers/2015-06-17.nord-bio-ey-odtc.pdf.
(7) U.S. Food & Drug Administration. “Orphan Products: Hope for People With Rare Diseases”, 1 March 2018, https://www.fda.gov/drugs/drug-information-consumers/orphan-products-hope-people-rare-diseases.
(8) Institute of Medicine (US) Committee on Accelerating Rare Diseases Research and Orphan Product Development; Field MJ, Boat TF, editors. Rare Diseases and Orphan Products: Accelerating Research and Development. National Academies Press (US); 2010. 2, Profile of Rare Diseases, https://www.ncbi.nlm.nih.gov/books/NBK56184/.
(9) Erman, Michael. “Pfizer gets U.S. approval for $225,000 a year heart drug” Reuters, Health News. 6 May 2019, https://www.reuters.com/article/us-pfizer-approval/pfizer-gets-u-s-approval-for-225000-a-year-heart-drug-idUSKCN1SC0VX.
(10) America's Health Insurance Plans. “The Rise of Orphan Drugs”, September 2019, https://www.ahip.org/wp-content/uploads/IB_OrphanDrugs-1004.pdf.
(11) Weintraub, Arlene. “Mylan CEO Bresch Admits 'Full Responsibility' For EpiPen Price Hikes” Forbes, Health. 1 December 2016, https://www.forbes.com/sites/arleneweintraub/2016/12/01/mylan-ceo-bresch-admits-full-responsibility-for-epipen-price-hikes/#22178b4a393c.
(12) Merle, Renae. “Martin Shkreli sentenced to seven years in prison for defrauding investors” The Washington Post, Business. 9 March 2018, https://www.washingtonpost.com/news/business/wp/2018/03/09/martin-shkreli-to-be-sentenced-friday-faces-more-than-decade-in-prison/.
(13) “Combating Rare Diseases in the 21st Century”. California Healthcare Institute. https://califesciences.org/wp-content/uploads/2015/05/Rare-Disease-Brochure-1-Page-Version1.pdf
(14) Cohen, Joshua P, and Abigail Felix. “Are payers treating orphan drugs differently?.” Journal of Market Access & Health Policy vol. 2 10.3402/jmahp.v2.23513. 15 Jan. 2014, doi:10.3402/jmahp.v2.23513
(15) Cohen, Joshua & Awatin, Josephine. (2017). Patient Access to Orphan Drugs. Expert Opinion on Orphan Drugs. 5. 10.1080/21678707.2017.1402676.