Rare Disease research is expensive. But worth it. How much are our patients' lives worth to you? Visit HowMuchForMe.org for more information.
Posted by Project One Million on Monday, June 4, 2018
Rare Disease Treatments Are Expensive
Treatments for rare diseases are expensive, and only 5% of rare diseases actually have a treatment available to patients. Research and development, the small number of patients requiring treatment for a given rare disease, and the high costs to produce the treatment in the manufacturing facility are all reasons that drug manufacturers price drugs at the levels that they do.
More and more, however, individual countries that have a publicly funded health care system are denying patients access to these drugs due to increasing costs. In addition, insurance companies are denying coverage for the same reasons. As health care costs across the world continue to skyrocket, rare disease treatments often end up finding a very difficult path to reimbursement, leaving patients without access to these innovative treatments that could potentially prove to be life-saving.
While expensive to treat, it's clear that the lives of our rare disease patients are worth it, and everything must be done to ensure access to these treatments is available to our patients in need. Active collaboration between the pharmaceutical industry, government, insurance companies, patients and family members, and patient organizations is vital to ensure that access is readily available to patients in need. This site will share the stories of to those patients as they implore all involved to work together to make these life-saving treatments accessible in an equitable, ethical, and expeditious fashion.
To us, our patients are worth whatever it takes to ensure their lives are saved. #HowMuch are they worth to you?
The Drug Development Process
Getting a Rare Disease Drug to Market
The cost to develop drugs can be astronomical, especially when a company undertakes research and development in the rare disease space. It’s a risky endeavour, with the failure rate very high. While it’s difficult to pin down the exact dollar figure on what it takes to bring a drug from the lab to market – there are many differing studies showing figures in the billions vs. figures in the hundreds of millions – what we do know is that it’s expensive and very risky. Working together, I’m sure that the pharmaceutical industry and payers can come together to ensure that research, these potential cures and life-saving treatments, can be made available to patients in need in an expeditious, ethical, and equitable fashion. Andrew McFadyen, Executive Director, The Isaac Foundation
Developing a drug in hopes of market approval – through research, clinical trial phases, and the FDA application process – includes a tremendous amount of time, cost, and labour. And there is still no guarantee that a given drug will be approved by the FDA for market.
Further complicating the process, rare disease drugs come with their own set of unique challenges and circumstances, including smaller patient populations, which affect not only clinical trial sizes, but the market potential for a drug post-approval. Moreover, the 1983 Orphan Drug Act dramatically changed the scene in regards to rare disease drug development in the U.S., which is discussed in greater detail below.
Inherently Fickle: Drug Development Statistics
Statistics quoted around pharmaceutical development – including costs, profits, and timelines – are often in dispute. When discussing the overall cost of developing a drug, estimates often roll in the costs of drugs that failed to win approval. Estimates often disregard the cost of capital that is required to begin the Research & Development stage.
Overall statistics and data are just as nuanced as the drug development process itself. For instance, the cost of R&D for an average drug is estimated at $1.4 billion. Yet, successful drugs often cost less than this figure. In addition, there are far more casualties in drug development than there are success stories, affecting this overall average. The odds that a drug in preclinical testing will eventually be approved are 1 in 5,000, and with drugs dying at various stages in the development process – from preclinical, to in-human trials – determining average numbers or statistics is a complicated task.
In the case of rare disease drugs, more orphan drugs are being approved on an annual basis by the FDA. That statistic alone points to the narrative that drug manufacturers are trying to capitalize on the higher price they can charge for these novel treatments and therapies. However, between 2006 and 2010, the approval rates were similar for rare disease and common disease applications (2012), which suggests that it’s science that’s the driving force, our ability to find and treat these diseases is rapidly increasingly, rather than financial considerations driving the innovation.
In terms of costs for rare disease drugs, it is true that most products receiving an orphan approval start out as rare disease treatments, and do not expand their use to non-rare conditions. In essence, these drugs are not being used to treat large sections of the population (FDA, 2017) and the only way to recoup potentially steep R&D costs for companies (including costs for failed attempts at treating a specific disease or family of diseases) is to charge higher costs for these rare drugs.
In the end, the resistance to rare disease drugs, simply because of their price tag, poses a threat to the very development of these drugs that patients are in desperate need of and we implore companies and payers to work together to get these innovative drugs into the hands of patients in need. Whatever the cost of collaboration, our patients are worth it.
By The Numbers – A Glimpse Into the Drug Development Process
$1 Billion USD
The estimated cost to develop an orphan drug. A mass market drug is estimated to cost $2.6 billion. (December 2016 report to U.S. Congress by the Department of Health and Human Services, accessed from NPR, 2017). The 1983 U.S. Orphan Drug Act was created to incentivize companies to develop orphan drugs considered not financially viable, because they treat rare diseases affecting fewer than 200,000 Americans. Those incentives include a waiver on millions of dollars in fees, seven years of market exclusivity, and a tax break for research and development costs.
.05%
Using US Centers for Medicaid & Medicare estimates, analysts suggest that orphan drugs represent only 0.5 % of US healthcare spending (Forbes, 2013).
9 Years
The costs of bringing a drug to market is likely to only increase over time. Eroom’s Law suggests that drug discovery is not only becoming slower, but more expensive, over time. Despite improvements in technology, it’s becoming costlier and more time intensive to bring a drug to market. The trend, first observed in the 1980s, shows that the cost of developing a new drug roughly doubles every 9 years. (More on Eroom’s Law here).
8.6 Years
The average time a drug spends in clinical development, though some analysts report that average may be upwards of 12 years (Report to Congress, 2016). This time includes: preclinical testing, using laboratory and animal studies, and safety evaluation (average 3.5 years), Phase 1 Clinical Trial: the first tests of a drug in healthy volunteers (average 1 year), Phase 2 Clinical Trial: larger studies done in patients to testing a drug’s effectiveness (average 2 years), and Phase 3 Clinical Trial: the broader trials submitted to the FDA to obtain drug approval (average 3 years).
$157 Billion USD
The estimated amount the global pharmaceutical industry spent on research and development by private and public companies alone in 2016. (PharmaTech)
600 and 1 in 5000
The number of new drugs that have received FDA approval to treat rare diseases since the 1983 Orphan Drug Act was introduced. In the decade before the passage of the Orphan Drug Act, which was created to incentivize drug developers to treat rare diseases, only 10 industry products for rare diseases were brought to market. 2017 saw over 50 drug approvals (as of September 2017), compared to just 2 in 1983 (FDA, 2017). As dramatic, the chance for a new drug to actually make it to market is 1 in 500. Estimates suggest only 5 in 5000 drugs that enter preclinical testing will progress to human testing. One of these 5 drugs tested in humans is approved (Medicinenet).
More Information – Important Resources
Access to Treatment in Canada
Reimbursement of Treatments for Rare Diseases in Canada – A Long and Arduous Process
From an access standpoint, there is no reason for delay, and no reason why patients who need access can’t receive it soon after regulatory approval from Health Canada. Patients suffering from these rare and progressive diseases don’t have the luxury of time on their side, and the current process is long and arduous. Companies and governments can and should help patients now while these processes play out, and I remain hopeful that true collaboration with all stakeholders can take place. Andrew McFadyen, Executive Director, The Isaac Foundation
If a drug receives a positive recommendation, the file then moves to the pCPA (Pan-Canadian Pharmaceutical Alliance) for bulk pricing negotiations. In this stage, negotiators assigned to represent all prices open discussions with the company in an attempt to come to terms on the cost. Because rare disease drugs are often some of the most expensive in the world, these negotiations take a very long time – anywhere from 6-18 months. If negotiations result in a deal, provinces can then decide to accept the deal and begin delivering the drug to patients on their drug plan. Occasionally, no deal is able to be struck between pCPA and the company, and the drug remains difficult or impossible to secure for patients in need.
While these processes undergo their reviews, Physicians with patients suffering from a rare disease may fill out a request for reimbursement application and submit it to the provincial Ministry of Health. From there, the application is reviewed and a decision to cover the cost of treatment is either approved or, in most cases, denied. Most reasons governments provide for denial are due to a lack of evidence of the benefits these treatments provide patients, especially while the CADTH reviews are in place. In many provinces, policies are in place that prevent these decisions from being rendered until the above reviews have been completed. Companies can work directly with governments to see how drugs can be accessed while reviews are taking place, and they are often encouraged to show a willingness to help provide access for their patient population by drugs on a compassionate use basis.
Bureaucratic Path to Reimbursement – Information and Estimated Timelines
Bureaucratic Path to Reimbursement Could Take 18-24 Months Longer
STEP 1 - Approval By Health Canada
A company submits their drug to Health Canada for review and approval for use in Canada. Many reviews for rare disease drugs are considered a “priority” review because of the potential impact the therapy could have on patients.
STEP 2 - Submission and Review to the Common Drug Review (CDR)
The Common Drug Review is a “process for conducting objective, rigorous reviews of the clinical, cost-effectiveness, and patient evidence for drugs.” The CDR completes their review and recommends to provinces whether a drug should be reimbursed or not.
STEP 3 - Negotiations Begin With the Pan-Canadian Pricing Alliance (pCPA)
The Pan-Canadian Pricing Alliance works to capitalize “on the combined ‘buying power’ of drug plans across multiple provinces and territories” to bring the cost of expensive treatments down. If a drug receives a recommendation at CDR to continue to the pCPA negotiation process, negotiations could take 12-18 months.
6
Months Estimated for Health Canada Review
6
Months Estimated to CADTH process
12