By Kate Greenwood
Cross-Posted at Heath Reform Watch
Lately it seems that each passing day brings another article about the cost of orphan drugs. Earlier this week at FiercePharma, Tracy Staton reported that the United Kingdom’s National Institute for Health and Clinical Excellence (NICE) has asked Alexion Pharmaceuticals to justify the price of its drug Soliris which is, per Staton, “the most expensive drug in the world” at around $569,000 a year. Specifically, NICE seeks “‘clarification from the company on aspects of the manufacturing, research and development costs’” of the drug. According to Staton, this latest development in a review process characterized by “halting progress” is “a departure from NICE’s usual calculations, which typically focus on quality-of-life years and the like.”
Pushback by NICE and other payers notwithstanding, the orphan drug market is growing. As I blogged about here, in 2013 EvaluatePharma estimated that “the worldwide orphan drug market is set to grow to $127 [billion], a compound annual growth rate of +7.4% per year between 2012 and 2018[,]” which “is double that of the overall prescription drug market, excluding generics, which is set to grow at +3.7% per year.” In a recent article in the New England Journal of Medicine, venture-capital investors Robert Kocher and Bryan Roberts note that “more than half of the 139 drugs approved by the FDA since 2009 are for orphan diseases” and suggest that there is a risk of “systematically underinvesting in other important areas of medicine.”
Kocher and Roberts’ explain that one reason that orphan drugs attract investment is that their development costs are low. The problem or potential problem of underinvestment in diseases like depression and diabetes could therefore be addressed, they contend, by bringing the cost of developing treatments for these common conditions in line with the cost of developing treatments for rare diseases. And, they argue, one promising approach to doing so is to reduce clinical trial costs by reducing the size of clinical trials. Read More