Pricing, pricing, pricing!

In Advocacy, Clinical Development, Market Access, Partnering & Investment, Regulation & Government by André SingerLeave a Comment

It all comes to that when looking at the sustainability of the orphan drug development industry, and the ability of rare disease patients to continue accessing these life-saving therapies. I recently read an article at The Boston Globe portal, which addressed this subject and which headline was ‘$300,000 a year? Doctors question high drug prices for rare diseases’ and thought that they were being generous with the pricing standards, since there are so many approved orphan drugs in the market with prices way higher than $300k – like Alexion’s Soliris at $400,000 and Shire’s elaprase at $375,000 per year. Everyone knows about the logical pricing formula for rare disease therapies. Pharma and biotechs invest hundreds of millions of dollars in orphan drug development, with a small patient population, pricing must be high so industry can recoup the investment. Prices could be even higher if the Orphan Drug Act, which exempts industry from many fees and grants them considerable tax credit, was not in place since 1983. Additionally, it is mandatory for insurance companies to reimburse these therapies, which makes the whole system viable. But until when? With more companies starting to enter the orphan drug market, and aspects like increasing biomarkers identification which leads to the determination of types of common diseases as rare disorders, the probability of a boost of new approved drugs in the market in the next decade is really high. This will tremendously impact the ability of payers to continue reimbursing for these therapies while maintaining their financial sustainability. Dr. Brian P. O’Sullivan, a professor of pediatrics at the University of Massachusetts Medical School is leading an initiative with colleagues and other oncologists to discuss whether the way drug pricing is done is responsible. Even though the group acknowledges that there’s no readily solution to this issue, they suggest that pricing should not simply be based on what people are willing to pay, when life hangs in the balance. Join us next April in DC at the World Orphan Drug Congress USA 2014, where leaders in the industry will be discussing different approaches to make the system more sustainable, while continuing to advance rare disease research.

It all comes to pricing when looking at the sustainability of the orphan drug development industry, and rare disease patients’ continued access to these life-saving therapies.

I recently read an article at The Boston Globe portal which addressed this subject; ‘$300,000 a year?

Doctors question high drug prices for orphan drugs and thought that we are being generous with the pricing standards. There are a number of approved orphan drugs in the market with prices way higher that $300k – like Alexion’s Soliris at $400,000 and Shire’s elaprase at $375,000 per year.

Everyone knows about the logical pricing formula for rare disease therapies. Pharma and biotechs invest billions of dollars in orphan drug development and with a small patient population pricing must be high so industry can recoup investment. Prices would even be higher if the Orphan Drug Act, which exempts industry from many fees and grants them considerable tax credit, was not in place since 1983. Additionally, it is mandatory for insurance companies to reimburse these therapies, which makes the whole system viable.

But until when?

With more companies entering the orphan drug market the probability of a boost of new approved drugs in the market in the next decade is high. This will tremendously impact the ability of payers to continue reimbursing for these therapies while maintaining their financial sustainability.

Dr. Brian P. O’Sullivan, a professor of pediatrics at the University of Massachusetts Medical School, is leading an initiative with colleagues and other oncologists to discuss whether the way drug pricing is done is responsible. Even though the group acknowledges that there’s no readily available solution to this issue, they suggest that pricing should not simply be based on what people are willing to pay.

Join us next April in DC at the World Orphan Drug Congress USA 2014, where leaders in the industry will discuss different approaches to make the system more sustainable, while continuing to advance rare disease research.

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