Paying for the Orphan Drug System: break or bend? Is it time for a new evaluation system for payers in Europe to take account of new rare disease treatments?

Abstract

Since its enactment in 2000, the European Orphan Medicinal Products Regulation has allowed the review and approval of approaching 70 treatments for some 55 different conditions in Europe. Success does not come without a price, however. Many of these so-called “orphan drugs” have higher price points than treatments for more common diseases. This has been raising debate as to whether the treatments are worth it, which, in turn risks blocking patient access to treatment. To date, orphan drugs have only accounted for a small percentage of the overall drug budget. It would appear that, with increasing numbers of orphan drugs, governments are concerned about the future budget impact and their cost-effectiveness in comparison with other healthcare interventions. Orphan drugs are under the spotlight, something that is likely to continue as the economic crisis in Europe takes hold and governments respond with austerity measures that include cuts to healthcare expenditures. Formally and informally, governments are looking at how they are going to handle orphan drugs in the future. Collaborative proposals between EU governments to better understand the value of orphan drugs are under consideration. In recent years there has been increasing criticism of behaviours in the orphan drug field, mainly centring on two key perceptions of the system: the high prices of orphan drugs and their inability to meet standard cost-effectiveness thresholds; and the construct of the system itself, which allows companies to gain the benefits that accrue from being badged as an orphan drug. The authors hypothesise that, by examining these criticisms individually, one might be able to turn these different “behaviours” into criteria for the creation of a system to evaluate new orphan drugs coming onto the market. It has been acknowledged that standard methodologies for Health Technology Assessments (HTA) will need to be tailored to take into account the specificities of orphan drugs given that the higher price-points claimed by orphan drugs are unlikely to meet current cost-effectiveness thresholds. The authors propose the development of a new assessment system based on several evaluation criteria, which would serve as a tool for Member State governments to evaluate each new orphan drug at the time of pricing and reimbursement. These should include rarity, disease severity, the availability of other alternatives (level of unmet medical need), the level of impact on the condition that the new treatment offers, whether the product can be used in one or more indications, the level of research undertaken by the developer, together with other factors, such as manufacturing complexity and follow-up measures required by regulatory or other authorities. This will allow governments to value an orphan drug that fulfilled all the criteria very differently from one that only met some of them. An individual country could determine the (monetary) value that it places on each of the different criteria, according to societal preferences, the national healthcare system and the resources at its disposal – each individual government deciding on the weighting attributed to each of the criteria in question, based on what each individual society values most. Such a systematic and transparent system will help frame a more structured dialogue between manufacturers and payers, with the involvement of the treating physicians and the patients; and foster a more certain environment to stimulate continued investment in the field. A new approach could also offer pricing and reimbursement decision-makers a tool to handle the different characteristics amongst new orphan drugs and to redistribute the national budgets in accordance with the outcome of a differentiated assessment. The authors believe that this could, therefore, facilitate the approach for all stakeholders.