Big Price Tags When Orphan Drugs Treat Common Diseases

By Sarah Karlin-Smith 

AHIP STUDY: ORPHAN DRUG PRICES HIKE WHEN NON-ORPHAN USES INCREASE  Prices of drugs approved for rare disease were more likely to increase when the majority of the product’s use was for more common conditions, according to a study conducted by the insurance industry. The study, which looked at 46 of the 80 drugs that had orphan drug exclusivity between 2012 and 2014, found that the average wholesale price of the drugs increased by 26 percent during that time frame. Drugs with mostly non-orphan uses had the greatest average price increases (37 percent); price jumps were lowest (12 percent) for drugs prescribed almost exclusively for their rare disease indications.

The study is the latest evidence of unintended consequences from the 1983 Orphan Drug Act. The law, which created incentives for companies to develop drugs for diseases that affect fewer than 200,000 patients in the U.S., has in many ways been seen as a resounding success. Before the law, only a handful of drugs for rare conditions were approved, but under the Act more than 500 orphan drugs have been approved; last year, nearly half of all new drug approvals were for orphan disease. Payers and patients have pushed back over the high prices of such products, however, and what some see as abuse of the orphan drug incentives to produce therapies that ultimately are used to treat larger populations.

Almost half of the usage of the 46 orphan drugs examined in the new study was for common conditions. In fact, not a single patient with an orphan disease diagnosis was prescribed the immunosuppressant Remicade or the hepatitis B and HIV drug Viread over the three-year time period, according to the study. In contrast, Lumizyme was prescribed only to patients with an orphan disease.

“Orphan drugs, long thought to be treating so few patients each year that they did not present a reimbursement challenge for payers, are now being more closely scrutinized by public and private payers,” the study concludes. “A proper balance has to be struck between ensuring that the incentives remain for those firms focused on developing these very important, and much needed orphan disease therapies; while not allowing the Act to be exploited purely for financial gain.”

PhRMA took issue with some aspects of the report, including its focus on wholesale drugs costs rather than the prices paid by patients and payers. It also said there is still a big gap in treatment for rare diseases, despite the success of the Orphan Drug Act. “This underscores the importance of offering incentives to help facilitate the development of treatments for disease affecting a small patient population,” the lobby said in a statement. The final report here.

Happy Monday and welcome back to Prescription PULSE where we note that it’s already been a year since FDA finally gave the OK to Sprout’s treatment for low sexual desire in women. The Aug. 18, 2015 approval for Addyi (flibanserin) came after multiple agency rejections and a controversial public relations campaign backed by drug companies that accused FDA of gender double standards. Despite the hype for the so called “female Viagra” the drug hasn’t done well commercially, Fierce Pharma reports: http://bit.ly/2bozn7u. Sarah’s backstory on the politically charged run up to the drug’s approval: http://politi.co/2bbLBi0

AHIP’S MARILYN TAVENNER OK WITH BIGGER PART B DEMO — The insurance lobby CEO and former CMS administrator told Dan Diamond that she would like the agency to think about how Medicare Advantage can also be a part of the CMS proposal to test new ways for paying for physician administered drugs. Right now the proposal is designed for Medicare fee-for-service patients. AHIP “applauds CMS,” for taking on the pharma issue, Tavenner said. “We think what they’re doing with the Part B demo makes absolute perfect sense.” Listen to the entire podcast: http://bit.ly/2bnRCWn

WHITE HOUSE PUSHES MEDICATION-ASSISTED OPIOID TREATMENT — Michael Botticelli, director of national drug control policy, sent a letter to all 50 governors last week about the need for more doctors to be trained to treat people with prescription opioid and heroin disorder. The administration is offering free training in the use of buprenorphine, one of the medication-assisted treatments approved by FDA to assist addicts. Nearly half of U.S. counties had no physicians eligible to prescribe the drug as of February 2016. http://bit.ly/2b4nyAc

LAGGING CYBERSECURITY FOR MEDICAL DEVICES? — Hospital leaders are frustrated with the state of cybersecurity in medical devices, some of them said at a HIMSS-sponsored Capitol Hill event. The devices — which often run on outdated operating systems — are vulnerable, and Black Hat hacks are seen as inevitable, our eHealth colleagues report. "[Device makers] aren't owning up. In many cases they aren't building in new protections," said Roderick Dykehouse, CIO of Penn State's Milton Hershey Medical Center.

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