october 2014 sample pages pages | sample · orphan drug market access: payer insights on the...

October 2014

A FirstWord Dossier Report

Orphan Drug Market Access: Payer Insights on the Present and Future

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Published October 2014© Copyright 2014 Doctor’s Guide Publishing Limited

All rights reserved. No part of this publication may be reproduced or used in any form or by any means graphic, electronic or mechanical, including photocopying, recording, taping or storage in information retrieval systems without the express permission of the publisher.

This report contains information from numerous sources that Doctor’s Guide Publishing Limited believes to be reliable but for which accuracy cannot be guaranteed. Doctor’s Guide Publishing Limited does not accept responsibility for any loss incurred by any person who acts or who fails to act as a result of information published in this document. Any views and opinions expressed by third parties and reproduced in this document are not necessarily the views and opinions of Doctor’s Guide Publishing Limited. Any views and opinions expressed by individuals and reproduced in this document are not necessarily the views and opinions of their employers.

Cover image: © Tonis Pan - Fotolia.com


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All Contents Copyright © 2014 Doctor’s Guide Publishing Limited. All Rights Reserved

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ContentsExecutive summary .............................................................................................................................. 1

There are generally few pricing and reimbursement limitations on orphan drugs .................. 1

Payers believe the orphan drug designation is being taken advantage of in some cases .......... 2

Payers currently have limited engagement with the pharmaceutical industry on orphan drugs ....3

Market access is likely to present a growing challenge for orphan drugs in the future ............ 4

Research objectives and methodology .................................................................................6

Orphan drugs and rare diseases overview ......................................................................... 7

Section summary ...................................................................................................................................... 7

What are orphan drugs? .........................................................................................................................9

The regulatory environment ..................................................................................................................10

US ..........................................................................................................................................................10

The Orphan Drug Act set a regulatory process in place for orphan drugs in the US ........ 10

The approval of orphan drugs is subject to a separate process .....................................12

EU ...........................................................................................................................................................16

The EU regulations have established incentives for orphan drug development ......... 17

Access to orphan drugs can be varied across Europe .......................................................18

Current market dynamics ......................................................................................................................19

The size of the orphan drugs market has increased significantly in recent years ...........19

Therapy areas ................................................................................................................................ 21

The big pharmaceutical companies all have significant orphan drug interests ...........24

The market is forecast to grow considerably ..............................................................................25

A range of important new orphan drugs has been launched in the last two years ............ 26

The pipeline for orphan drugs is expected to deliver some promising new therapies ........ 27


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Orphan drugs undergo the same pricing and reimbursement process as other products in most markets ...........................................................................................................32

US ...........................................................................................................................................................33

France ....................................................................................................................................................34

There are several fast track procedures in place to encourage faster access to new treatments ..........................................................................................................................36

Germany ................................................................................................................................................ 37

Italy .........................................................................................................................................................38

The standard pricing and reimbursement process will usually allow for full reimbursement of orphan drugs ................................................................................................39

There are two special mechanisms in place for the pricing and reimbursement of orphan drugs ..............................................................................................................................40

Spain ......................................................................................................................................................40

There are mechanisms in place to encourage earlier access to orphan drugs ...........42

UK ...........................................................................................................................................................42

The HTA process is of critical importance in the UK ............................................................42

Local level decisions impact on orphan drug use ................................................................44

Payer insights on orphan drugs ................................................................................................46

Summary and key insights ....................................................................................................................46

The extremely high price that orphan drugs command is an increasing concern for payers ...... 47

The rising prices of orphan drugs are raising concerns over future funding .....................48

Obtaining approval for use in a rare disease is seen as a way to increase the price for some drugs ..........................................................................................................................50

Payers feel that some companies are taking advantage of the orphan drug designation ........... 51

Indication expansion after initial approval is a key frustration for payers ...........................52


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Needs and requirements for orphan drugs .......................................................................55


There is a limited level of decision making for orphan drugs ...................................................... 57

Individual funding requests require UK payers to make decisions on orphan drugs ............ 58

There are generally no restrictions on accessing orphan drugs in the US ........................59

The variation in clinical data available for orphan drugs can impact on decision making .......59

Comparative data is generally not available, making health economic assessments challenging ................................................................................................................. 61

Engagement with pharmaceutical companies on orphan drugs is limited ..............................62

Pharmaceutical companies rarely solicit advice from payers when developing orphan drugs ..................................................................................................................64

Best case examples ...........................................................................................................................65

Payers would like the pharmaceutical industry to be more engaged on orphan drugs ....... 65

Payers would like to start receiving data whilst the drug is still in clinical trials ..........66

A range of data is required, including budget impact, epidemiology and expected usage .............................................................................................................................. 67

Future expectations ............................................................................................................................69


The competitive landscape for orphan diseases is expected to continue to develop ......... 71

Market access is expected to become increasingly challenging ...............................................72

HTA assessments may start to be applied for orphan drugs .................................................72

Risk-share may be required for continued funding of orphan drugs ...................................73

How pharma companies can ensure continued opportunities for orphan drugs .................74

Patient advocacy is expected to become more important ....................................................75

Ensuring outcomes are being collected will help justify the high price of orphan drugs .......... 77

Contributors .............................................................................................................................................79


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Research objectives and methodologyThis FirstWord dossier report provides a qualitative analysis of key trends, issues and challenges in relation to orphan drugs and rare diseases and how these could evolve in the future.

The information for this report was gathered from multiple sources, including in-depth secondary research across multiple publically available sources of information and primary research that involved in-depth telephone interviews with five European payers (one from each of the top five EU markets) and two US payers.

The payers were selected on the basis of their national, regional and local decision-making responsibilities. The objectives of the interviews were:

nTo understand how payers view orphan drugs and rare diseases

nTo assess the key challenges being faced by payers in relation to orphan drugs

nTo evaluate what factors influence payers’ decision-making and how this varies between markets

nTo examine when companies should start engaging with payers and the support that should be provided to payers in order to facilitate market access

nTo understand what data companies should present to payers and at what stage


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The regulatory environmentThe first set of legislation created for orphan drugs was implemented in the US in 1983 with the ground-breaking Orphan Drug Act. This started a wave of similar activity, with Japan, then Australia adopting orphan medicines legislation in the 1990s.

The EU Regulation on Orphan Medicinal Products was adopted by the European Parliament on 16 December, 1999 and published in January 2000. Following the adoption of the regulation, an EU committee named the Committee for Orphan Medicinal Products (COMP) was created within the European Medicines Agency to review the applications for medicinal products seeking an "orphan" designation.

US In the US, 'orphan drug' designation is not just for pharmaceutical products but also covers medical devices and dietary or diet products.

The Orphan Drug Act set a regulatory process in place for orphan drugs in the USThe Orphan Drug Act (ODA) of 1983 was designed to facilitate the development and commercialisation of orphan drugs and was passed in response to lobbying pressure from organisations such as the National Organization for Rare Disorders. The chief sponsor was Henry Waxman, chairman of the Energy and Commerce Subcommittee on Health, and the ODA was approved by both the House of Representatives and Senate in December 1982 before being passed into law by President Ronald Regan in January 1983.

Under the ODA drugs, vaccines, and diagnostic agents qualify for orphan status if they are intended to treat a disease affecting less than 200,000 patients in the US. Key incentives that were included in the ODA are:

nSeven-year market exclusivity – this differs from exclusivity gained under traditional patent law, as it does not begin until the drug is granted FDA approval and is independent of the drug's current patent status. This seven-year marketing exclusivity is given to the first company to file a complete new drug application (NDA); however, competitors are not prevented from making the drug available for different uses during the seven year period of exclusivity and more than one company can receive designation for the same drug for the same use;


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The pricing and reimbursement process for orphan drugs

Summary and key insightsFigure 4: Key insights on the pricing and reimbursement process for orphan drugs

In some markets, the pricing, reimbursement and market access processes have been adapted for orphan drugs. Patient access to orphan drugs is rarely denied, largely due to the high unmet need, the rarity of the diseases and the lack of alternative options.

There is currently no separate reimbursement process for orphan drugs in the US; however, the rising price of these drugs is causing concern for payers and they expect that there will be some form of restriction in the future, for example through prior authorisation or having preferred options where more than one drug is available.

Source: FirstWord

The high unmet need and pressure from advocacy

groups and physicians means payers are under pressure to

fund orphan drugs

Spending on orphan drugs is expected to increase; something which causes payers concern as

they seek to control budgets

In general, orphan drugs undergo the

same P&R processes as other drugs

In some markets, specific allowances have been made to facilitate

access to orphan products

P&R for orphan drugs is becoming

increasingly important for payers due to the high price that orphan

drugs command


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Orphan drugs undergo the same pricing and reimbursement process as other products in most marketsAs shown in Table 6 (page 32), in most markets, the process for reimbursement of orphan drugs is the same as that for drugs in general, although there are some considerations that set orphan drugs aside.

Table 6: Overview of reimbursement requirements for orphan drugs.13

Country (HTA Organisation)

Separate Reimbursement Review Process for Drugs for

Rare Diseases?

Is Cost-Effectiveness a Required Element of the Reimbursement

Submission?

France (HAS) No publicly available information found regarding a separate process Yes

Germany (IQWIG) No publicly available information found regarding a separate process. Yes

Italy Generally no but there are two special processes that can be used if needed No

Spain (Instituto de Salud Carlos III-ISCIII)

No publicly available information found regarding a separate process No

Scotland (SMC) No, the assessment process is same as that for all other drug submissions; however, some “modifiers” are acceptable for orphan drugs

Yes

UK (NICE/AGNSS)54 NICE is responsible for coordinating the evaluation of expensive ultra-rare orphan drugs (as of April 2013)

Yes

US (none) Not officially but some insurers are starting to limit access/coverage to some orphan drugs

No

The pricing and reimbursement of orphan drugs are key issues for payers and policy makers, due to the high price these drugs tend to command and the fact that, despite the small patient population, huge costs can be incurred when patients are treated with orphan drugs.

13 Garau & Mestre-Ferrandiz (2009) Access mechanism for orphan drugs; a comparative study of selected European countries. OHE Briefing. No 52.


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All of the payers interviewed for this report recognise the reasons why orphan drugs are priced at a significant premium.

According to the Pharmacist, France, “Since only a few patients suffer from rare diseases, it’s normal that the drug prices are higher because the manufacturers invested a lot of money to develop these specific drugs for potentially low sales numbers. So if we do have drugs for rare diseases, it’s only because manufacturers invested in this field, and so we have to pay the price for that and we cannot expect the drugs to be free. I understand that this price level is necessary to fund this research.”

The Pharmacist, Germany suggests, “You either have to buy a lot of cheap things or a few very expensive things to get a return. So in my eyes that [the high price] is okay. The companies have to get their money back. I do not have that big a problem with the high price [of orphan drugs] plus the budget impact for the whole system is not that critical.”

The Head of medicines optimisation for a large CCG, UK adds, “Reasonable increase in price to cover their costs, then fine, I can appreciate that is needed. But some of the practices we’ve seen around orphan drugs and price hikes are just not acceptable. We won’t accept it. It can’t be tolerated.”

As the Advisor to the NHS, UK mentions, there is a feeling amongst payers that pharmaceutical companies are taking advantage of the orphan drug designation and the fact that most orphan drugs are automatically reimbursed in many markets in order to achieve a high price for their new product. Moreover, payers are aware that physicians and patients may exert pressure for the drug to be approved for use or fully reimbursed regardless of the price, resulting in a difficult situation for payers in some cases.

The rising prices of orphan drugs are raising concerns over future fundingPayers recognise the value that orphan drugs provide to patients, giving them improved treatment outcomes and a better quality of life in many cases. Moreover, there are also advantages for the overall health system, and the payer’s organisations, for example through earlier intervention which results in less severe


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ContributorsnUK payer – Advisor to NHS organisations (e.g. CCGs)

nUK payer - Head of medicines optimisation for a large CCG, UK

nPharmacist, Germany – Pharmacist

nPharmacist, Italy – Pharmacist on Hospital Formulary Committee and Regional Formulary Committee

nChief of Pharmacy, Spain – Director of Hospital Pharmacies, Member of Medication of High Impact Committee, Chief of the Pharmacy, Chief of the Pharmacy Therapeutic Committee

nPharmacist, France – Pharmacist

nUS payer – Executive vice-president of pharmacy for national US PBM

nUS payer – Professor of Medicine, health policy researcher and lawyer with a special interest in orphan drugs

Send comments on this research to:

[email protected]


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