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Orphan drugs’ clinical uncertainty and prices: Addressing allocative and technical inefficiencies in orphan drug reimbursement

Legislations incentivising orphan drug development and scientific advances have made orphan drugs pharma’s high-end favourite for the past two decades. Currently, around 50% of new marketing authorizations are for orphan drugs. For third-party healthcare payers (“payers”) the rise of orphan drugs pr...

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Autores principales: Eichler, Hans-Georg, Kossmeier, Michael, Zeitlinger, Markus, Schwarzer-Daum, Brigitte
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Frontiers Media S.A. 2023
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9909264/
https://www.ncbi.nlm.nih.gov/pubmed/36778019
http://dx.doi.org/10.3389/fphar.2023.1074512
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author Eichler, Hans-Georg
Kossmeier, Michael
Zeitlinger, Markus
Schwarzer-Daum, Brigitte
author_facet Eichler, Hans-Georg
Kossmeier, Michael
Zeitlinger, Markus
Schwarzer-Daum, Brigitte
author_sort Eichler, Hans-Georg
collection PubMed
description Legislations incentivising orphan drug development and scientific advances have made orphan drugs pharma’s high-end favourite for the past two decades. Currently, around 50% of new marketing authorizations are for orphan drugs. For third-party healthcare payers (“payers”) the rise of orphan drugs presents new challenges, including a high degree of uncertainty around clinical benefits and harms, a moderate effect size (for many orphan drugs), and a high price tag. The association of high clinical uncertainty and moderate effect sizes is not surprising in small target populations but in combination with high prices creates the risk of allocative and technical inefficiencies for payers. We here discuss and illustrate these risks. A combination of policies is needed for mitigation of allocative inefficiency: while there may be a rationale for higher prices for orphan than non-orphan drugs, a focus of pricing and reimbursement negotiations should include considerations of product profitability and of the consequences of orphan drug costs on the distribution inequality of medication costs for individual insured persons, coupled to knowledge generation from reimbursement contracts covering high-price orphan drugs that would benefit the wider patient community. Performance-based managed entry agreements could help to de-risk the economic consequences of clinical uncertainty and to mitigate technical inefficiency.
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spelling pubmed-99092642023-02-10 Orphan drugs’ clinical uncertainty and prices: Addressing allocative and technical inefficiencies in orphan drug reimbursement Eichler, Hans-Georg Kossmeier, Michael Zeitlinger, Markus Schwarzer-Daum, Brigitte Front Pharmacol Pharmacology Legislations incentivising orphan drug development and scientific advances have made orphan drugs pharma’s high-end favourite for the past two decades. Currently, around 50% of new marketing authorizations are for orphan drugs. For third-party healthcare payers (“payers”) the rise of orphan drugs presents new challenges, including a high degree of uncertainty around clinical benefits and harms, a moderate effect size (for many orphan drugs), and a high price tag. The association of high clinical uncertainty and moderate effect sizes is not surprising in small target populations but in combination with high prices creates the risk of allocative and technical inefficiencies for payers. We here discuss and illustrate these risks. A combination of policies is needed for mitigation of allocative inefficiency: while there may be a rationale for higher prices for orphan than non-orphan drugs, a focus of pricing and reimbursement negotiations should include considerations of product profitability and of the consequences of orphan drug costs on the distribution inequality of medication costs for individual insured persons, coupled to knowledge generation from reimbursement contracts covering high-price orphan drugs that would benefit the wider patient community. Performance-based managed entry agreements could help to de-risk the economic consequences of clinical uncertainty and to mitigate technical inefficiency. Frontiers Media S.A. 2023-01-26 /pmc/articles/PMC9909264/ /pubmed/36778019 http://dx.doi.org/10.3389/fphar.2023.1074512 Text en Copyright © 2023 Eichler, Kossmeier, Zeitlinger and Schwarzer-Daum. https://creativecommons.org/licenses/by/4.0/This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) and the copyright owner(s) are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
spellingShingle Pharmacology
Eichler, Hans-Georg
Kossmeier, Michael
Zeitlinger, Markus
Schwarzer-Daum, Brigitte
Orphan drugs’ clinical uncertainty and prices: Addressing allocative and technical inefficiencies in orphan drug reimbursement
title Orphan drugs’ clinical uncertainty and prices: Addressing allocative and technical inefficiencies in orphan drug reimbursement
title_full Orphan drugs’ clinical uncertainty and prices: Addressing allocative and technical inefficiencies in orphan drug reimbursement
title_fullStr Orphan drugs’ clinical uncertainty and prices: Addressing allocative and technical inefficiencies in orphan drug reimbursement
title_full_unstemmed Orphan drugs’ clinical uncertainty and prices: Addressing allocative and technical inefficiencies in orphan drug reimbursement
title_short Orphan drugs’ clinical uncertainty and prices: Addressing allocative and technical inefficiencies in orphan drug reimbursement
title_sort orphan drugs’ clinical uncertainty and prices: addressing allocative and technical inefficiencies in orphan drug reimbursement
topic Pharmacology
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9909264/
https://www.ncbi.nlm.nih.gov/pubmed/36778019
http://dx.doi.org/10.3389/fphar.2023.1074512
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