Addressing the Complexity of Orphan Drug Pricing
Publication Date
July 2019
Location
LSU Health Medical Education Building
Document Type
Abstract
Start Date
26-7-2019 9:00 AM
End Date
26-7-2019 12:00 PM
Description
Witnessing her son’s face twitching, unable to control his own arms, let alone feed himself, Abbey Meyers could not be more relieved to put a name to the illness afflicting her child: Tourette’s Syndrome. Ms. Meyers joined the Tourette’s Syndrome Association, which started off small in 1972, and through lobbying with influential people, ended up playing a huge role in promoting drugs for rare diseases like Tourette’s through the Orphan Drug Act of 1983. A Rare Disease according to rarediseaseday.org is defined in the Unites States as a disease that, “… affects fewer than 200,000 Americans at any given time.” The Orphan Drug Act was created to spur innovation in rare disease treatment through incentives: market exclusivity for seven years; instead of the usual five, or even twelve for biologics; tax benefits; clinical research subsidiaries; and exemptions for usual drug application fees charged by the Food and Drug Administration, lowering the cost of drug development. Despite these incentives, out of the 7000 rare diseases that exist, only about 5% have treatments. Many available drugs are very expensive. Orphan drug pricing is complex and in need of explanation and new solutions. My research examined drug development narratives, created typologies based on patterns of how drugs came to market, and analyzed whether pricing was justified. Numerous narratives justify pricing. The media’s focus tends to be on unjustifiable pricing, creating distrusting tension that results in unfair scrutiny for all companies. Reasons for high prices of orphan drugs include the expense of developing new drugs, along with pricey failures encountered before the successful drug. Companies may charge high prices as a precaution to assure a sufficient profit before potential competition arises, or they may raise prices after acquisition of a drug when they seek to continue research and potentially create new, innovative drugs. A key finding is that some drugs fit justified typologies; however, there are also a few that fit typologies for unjustified high prices. Therefore, we need policy changes. Transparency may be necessary to hold companies accountable and allow the public to learn when prices compromise accessibility. Other reforms include prohibiting “pay for delay” tactics that stagnate the introduction of generics into the market and limiting patent extensions strictly due to an improvement or additional benefit in an altered form of a drug. Defining what constitutes as a rare disease more rigidly and decreasing coverage under the Orphan Drug Act could also result in lower prices. The ultimate solution to inaccessibility of high price drugs is unclear due to the complexity of rare disease pricing. However, there are steps that could be taken to improve the situation.
Recommended Citation
Almoaswes, Hanna, "Addressing the Complexity of Orphan Drug Pricing" (2019). Summer Research Internship Program. 1.
https://digitalscholar.lsuhsc.edu/srip/2019/undergrad/1
Addressing the Complexity of Orphan Drug Pricing
LSU Health Medical Education Building
Witnessing her son’s face twitching, unable to control his own arms, let alone feed himself, Abbey Meyers could not be more relieved to put a name to the illness afflicting her child: Tourette’s Syndrome. Ms. Meyers joined the Tourette’s Syndrome Association, which started off small in 1972, and through lobbying with influential people, ended up playing a huge role in promoting drugs for rare diseases like Tourette’s through the Orphan Drug Act of 1983. A Rare Disease according to rarediseaseday.org is defined in the Unites States as a disease that, “… affects fewer than 200,000 Americans at any given time.” The Orphan Drug Act was created to spur innovation in rare disease treatment through incentives: market exclusivity for seven years; instead of the usual five, or even twelve for biologics; tax benefits; clinical research subsidiaries; and exemptions for usual drug application fees charged by the Food and Drug Administration, lowering the cost of drug development. Despite these incentives, out of the 7000 rare diseases that exist, only about 5% have treatments. Many available drugs are very expensive. Orphan drug pricing is complex and in need of explanation and new solutions. My research examined drug development narratives, created typologies based on patterns of how drugs came to market, and analyzed whether pricing was justified. Numerous narratives justify pricing. The media’s focus tends to be on unjustifiable pricing, creating distrusting tension that results in unfair scrutiny for all companies. Reasons for high prices of orphan drugs include the expense of developing new drugs, along with pricey failures encountered before the successful drug. Companies may charge high prices as a precaution to assure a sufficient profit before potential competition arises, or they may raise prices after acquisition of a drug when they seek to continue research and potentially create new, innovative drugs. A key finding is that some drugs fit justified typologies; however, there are also a few that fit typologies for unjustified high prices. Therefore, we need policy changes. Transparency may be necessary to hold companies accountable and allow the public to learn when prices compromise accessibility. Other reforms include prohibiting “pay for delay” tactics that stagnate the introduction of generics into the market and limiting patent extensions strictly due to an improvement or additional benefit in an altered form of a drug. Defining what constitutes as a rare disease more rigidly and decreasing coverage under the Orphan Drug Act could also result in lower prices. The ultimate solution to inaccessibility of high price drugs is unclear due to the complexity of rare disease pricing. However, there are steps that could be taken to improve the situation.
Comments
Mentor: Dean Smith, School of Public Health