You get a lot of press releases about orphan drug pharmaceutical companies. You also get a lot of articles about increasing share prices and rising market capital for successful orphan drug developers. And amongst all that you get a seemingly on-going commentary about the high prices set for orphan medicines.
But is has to be said that when it comes to cost, price and value of orphan drugs, you rarely read the perspectives from those that hold the budget; the payer. As reimbursement becomes the single most challenging hurdle to overcome during the entire orphan drug development process, the payer voice is becoming an increasingly important stakeholder in the discussion. In the interest of sustainable orphan drug development, both industry, payer and patient priorities must become aligned.
To that end, we were lucky enough to interview Ri De Ridder, Director General at the Belgium National Institute for Health & Disability Insurance (RIZIV-INAMI) about the orphan drug pricing situation and the meaning of value for rare disease treatments:
What criteria should be used to assess the value of a newly approved orphan drug?
Obviously, the therapeutic value and the risk/benefit ratio should be taken into account. These criteria are already evaluated at the time of granting the marketing authorization.
To assess the relative therapeutic value, several criteria should be assessed:
- (Relative) effectiveness/degree of net benefit (clinical improvement, quality of life, etc. vs. side effects) compared with alternatives
- Response rate
- Degree of certainty/documentation
- Available alternatives (pharmaceutical and non-pharmaceutical)
- Indirectly, the burden of disease
However, for orphan drugs the main criteria should be the added societal value. Ideally, the evaluation of the societal added value is based on the vulnerability of the patients. When determining the degree of vulnerability, elements such as age, sex and societal status should be taken into account. These (and other) criteria have been further elaborated in the Transparent Value Framework, created in the framework of the MoCA project in order to provide a simple and consistent terminology and methodology, allowing all partners to “speak the same language”.
What are the priorities of payers when it comes to approving the reimbursement of an orphan drug?
- Societal added value
- The response to an unmet need
- The sustainability and the affordability on a long term basis (including cost/effectiveness)
- Applicability and accessibility
Are specialised expertise, equipment or conditions needed. From an international/global point of view, these criteria can be determinant factors.
What are the key drivers that determine an orphan drug’s price?
Ideally the price of an orphan drug should reflect its value (therapeutic and societal) and therefore be based on the same elements as mentioned above. There is still controversy if rarity of the disease itself and the limited number of patients should be key drivers that determine the price. If the rareness and the severity of the disease affect the vulnerability of the patients however, then the societal value will reflect this.
How can payers and industry work together in the future to ensure long term sustainability of bringing rare disease treatments to patient’s in need?
To ensure long term sustainability, the costs of orphan drugs must be acceptable for all involved parties. Payers and industry should search for an agreement on the cost which is sustainable for the payer as well as a price that is profitable for the industry. Managed entry agreements can provide solutions for one specific orphan drug, however they are not a long term nor a structural answer to the problem.
The MoCA project is a perfect example of how collaboration between payers and industry could work on long term. MoCA stands for Mechanism of Coordinated Access. The objective of this European project was designing an operational mechanism of coordinated access to OMP for patients, stakeholders and Member States to provide access for patients with unmet medical needs and for whom these solutions would otherwise be out of reach – all of this in an affordable and sustainable way (“real life access”).
In that context, the MOCA group, that in the meanwhile is studying a pilot project, suggested early dialogue already during the clinical development of a possible new OMP, horizon scanning and prioritization exercises as specific examples of possible collaboration ways
How might increased competition of treatments for a rare disease effect pricing and reimbursement levels of orphan drugs?
The principle of ‘supply and demand’ should apply also for the pharmaceutical market for orphan drugs when choice is possible between different therapeutic options. In practice, price competition doesn’t seem to play a role in the case of rare diseases. New reimbursement strategies could be created, for example, lump sum financing, joint procurement and comprehensive treatment packages.
Our kind thanks to Ri De Ridder for taking the time to speak with us and share his thoughts and opinions. Along with other European payers bodies, Ri will be speaking at the 4th Annual World Orphan Drug Congress 2013 in Geneva. He will be continuing the pricing and value debate as part of an interactive panel discussion.
Download the brochure to see the full programme, speaker faculty and confirmed attendees.