Rising costs may not be a result of orphan drugs

Published Online: Sep 12,2016
Laurie Toich, Assistant Editor
From Daraprim’s price rising 5556% by Turing Pharmaceuticals under the leadership of Martin Shkreli, to the most recent pricing scandal with Mylan’s EpiPen, Americans have been faced with high out-of-pocket costs for many prescription drugs.
Government institutions, such as the US Centers for Medicare and Medicaid, have begun crafting novel ways to reduce drug costs. Other entities, such as pharmacy benefit managers, create drug exclusion lists to control drug costs, and some have even created alliances with retail pharmacy chains to further lower costs.
The latest target of criticism has been orphan drugs, which are used by a very small population who have rare diseases, that are also called orphan diseases. Since the treatments are not widely used, it can be expected that prices may be higher than a more common treatment, such as warfarin or over-the-counter ibuprofen.
In 1983, the Orphan Drug Act was established to create incentives for drug manufacturers to create drugs that treat rare diseases. As part of the law, manufacturers have 7 years of market exclusivity along with other benefits, such as tax breaks and research subsidies.
However, despite criticism, many praise orphan drug research for the groundbreaking treatments they offer to a small population that may not have otherwise received treatment.
“Healthcare providers should look for responsible, reasonable and clinical utility in everything they do. One of the values provided by specialty pharmacy is that we work to preserve quality of life for some of the most vulnerable patients, including Americans born with random genetic anomalies, or orphan populations, that require even more methodical, thoughtful and responsible care,” said Burt Zweigenhaft, president of the National Association of Specialty Pharmacy, in response to a new study published by Health Affairs.  “We understand the value of advocating for and delivering the best possible care to our patients, including providing access to the medications and the care they deserve, which has an enormous benefit not for only patients, but for the marketplace and society as a whole.”
The study indicated that the recent accusations of orphan therapies increasing drug costs may not be based upon facts. Investigators analyzed audited biopharmaceutical sales data from the IMS Health MIDAS from 2007 to 2013 to determine spending on orphan drugs.
They also estimated spending on the drugs between 2014 to 2018. There have been 365 brand-name orphan drugs to receive FDA approval between the implementation of the law and 2013, according to the study.
Investigators found that spending on orphan drugs was approximately $15 billion in 2007, which accounted for 4.8% of total pharmaceutical expenditures. In 2013, it increased to $30 billion, and was 8.9% of total spending.
Spending on orphan drugs is expected to slow from 2014 to 2018, according to the study. These findings suggest that only a small percentage of total pharmaceutical expenditures is being spent on these drugs, and it remains a stable figure.
The study concluded that the concerns about orphan drug expenditures are not justified.
“While much of the national conversation around healthcare focuses on short-term economics, we can’t lose sight of the fact that we now have the ability to personalize therapeutic interventions by bringing new medications, technologies, and innovation into the healthcare arena,” Zweigenhaft said. “We have the chance to open up access channels, and improve the lives and health outcomes for thousands of people. As healthcare providers, it is our responsibility to deliver the highest quality of care possible if the technology is available. We shouldn’t solely be focused on the price tag of these breakthrough therapies, but rather the collective impact we can have on these unique public health challenges.”

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