tabsThe growing cost of discovery and development of orphan drugs is having an overall impact on the patient access to orphan medicines. Orphan drugs, which are usually not covered by insurance systems are inaccessible to patients due to their high cost, and even when they are covered, patient cost-sharing (through co-payments or coinsurance) can still limit their access.

Reimbursement of orphan drug is the most important factor determining patient access to orphan drugs given their high costs. Usually for the non-orphan drugs, the parameters considered by the HTA agencies are the clinical effectiveness and the cost effectiveness. For orphan drugs, along with clinical and cost effectiveness, other parameters such as unmet need, solidarity and human value are also considered.

I have divided this post into 4 sub-topics w.r.t orphan drugs namely health technology assessment, co-payments, post-marketing surveillance and managed entry agreements.

Health Technology Assessment (HTA) is “any process of examining and reporting properties of a medical technology used in health care, such as safety, efficacy, feasibility, and indications for use, cost, and cost effectiveness, as well as social, economic, and ethical consequences, whether intended or unintended”.Its aim is to inform public decision-making by providing an opinion with supporting evidence, taking account of all aspects of the topic concerned. The major considerations by the HTA bodies includes Quality Adjusted Life Years (QALY) gained w.r.t. the intervention and the cost effectiveness of the drug. Reimbursement agencies reimburse the drugs which are proved to be cost effective or/as well as clinical effective. For orphan drugs greater uncertainties exist for reimbursement due to lack of clinical efficacy data and not-so-clear availability of economic evidence. Fortunately, in some countries, orphan drugs are reimbursed despite of this due to various reasons varying from the unmet need to solidarity.

Access to orphan drugs may be affected by considerable patient co-payment (copay) or coinsurance, which are out-of-pocket (OOP) costs for patients. In health insurance, copay is a fixed amount you pay for covered services, typically when you get the service. Copays differ from coinsurance (the percentage you pay for covered services, usually after reaching your deductible). Patient co-payments for prescription drugs can be important in some countries such as US, Canada and Switzerland; for instance, monthly co-payment may be as high as $90 for prescription medicines in the US or a coinsurance of approximately 30% of the drug’s cost.

The requirement of the clinical evidence at the time of marketing approval can be minimized if post marketing surveillance programs are planned. The post marketing studies ensures easy and rapid access of these orphan drugs to the patients. Sorafenib, an orphan drug for treatment of renal cell carcinoma, was subjected to post-marketing surveillance to ensure its clinical efficacy in patients, following relaxed clinical evidence at time of approval.

In order to fund overpriced medicines, such as orphan drugs, a precise provision known as managed entry agreements is into force which sanctions the manufacturer to enter into an agreement with the payer involving negotiations of performance targets based on expectable health improvements. These are usually for the drugs which are not reimbursed. Managed entry agreements are usually of two types: Performance based schemes and financial based arrangements.

  • Performance-based schemes aim to provide security of cost-effectiveness and link performance to reimbursement of (orphan) drugs.
  • Financial-based schemes exist to report trepidations of healthcare payers on the subject of cost and the budget impact of orphan drugs. Financial-based schemes take a variety of forms including ‘cost capping’ (beyond a cost threshold the drug is provided at a discount or at zero cost), utilization capping (any number of doses and/or cycles beyond an agreed amount results in financial consequences).

In a nutshell, many countries have accepted number of regulations and policies for orphan drugs in the last two eras. While these may permit the availability and access to orphan drugs, there are serious differences between countries in terms of range and types of regulations and policies executed. The presence of marketing exclusivity rests critical to incentivizing R&D of orphan drugs but portrays risks, markedly monopolization and high prices for orphan drugs, which may limit patient access to these needed medicines. Countries like China and India still lack stringent regulations and policies for orphan drugs and rare disease, that can have adverse effects on the growing populations of these countries.

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