PSY90 - MANAGEMENT AND PRICING RELATIONSHIPS IN NON-ONCOLOGY ORPHAN DRUGS IN THE UNITED STATES (2006-2016)

Abstract

Orphan drug pricing has come under increased scrutiny in the last few years as product launches have increased overall category spend. However, stricter management has not necessarily been implemented by Managed Care Organizations (MCOs), particularly in disease areas with only one/two products. The objective of this research was to build on Leibfried MJ et.al (2014 ISPOR) to determine how rare disease prevalence relates to Wholesale Acquisition Cost (WAC), and how this has changed over time. Additionally, this research sought to understand the relationship between available therapies in a given disease area and the resulting level of payer management. This research reviewed all orphan products approved from 2006-2016. From a list of N=216 approved therapies, we excluded N=81 orphan oncology products, N=18 products with a subsequent launch(s) in a non-orphan indication, and N=48 orphan products which had inconsistent or short-term dosing. We then reviewed the current WAC and determined the relationship vs. disease prevalence. Payer management was reviewed via clinical policies from six MCOs and formulary design (both medical and pharmacy) to determine the extent of management, which was compared to the number of products in each disease. Our filtering process led us to N=69 drugs. Prevalence was a weak predictor of actual price; however a relationship clearly existed. This relationship has remained consistent over the last 2 years, despite new orphan drug launches. Consistent with our 2014 findings, more management techniques (highest possible tier, PA, step edits, etc.) are employed by MCOs in diseases with multiple available products. The expansion of the 2014 study to include both new products and medical benefit products did not substantially change the conclusions that MCO payers look at disease categories individually for management decisions, despite the overall increase in orphan drug spend; a relationship between rare disease prevalence and orphan drug pricing exists.