Orphan drugs: Patients facing access issues

July 15, 2014

As the numbers of orphan drugs increase as well as their costs, patients are facing growing challenges accessing orphan drugs, according to a study from the Tufts Center for the Study of Drug Development (CSDD) at Tufts University.

Cohen

As the numbers of orphan drugs increase as well as their costs, patients are facing growing challenges accessing orphan drugs, according to a study from the Tufts Center for the Study of Drug Development (CSDD) at Tufts University.

Joshua Cohen, assistant professor at Tufts CSDD, who conducted the analysis, and colleagues examined all new molecular entities and biologics from 1983 to 2013 to get a detailed look at patient access. From 2000 to 2013, 86 orphan drugs were approved in the United States, up from 65 during the prior 18-year period 1983 to 2000, while in Europe 96 orphan drugs were approved from 2000 to 2013, more than double the 44 approved in the earlier period, according to Tufts CSDD.

Among the CSDD study findings include:

  • Since 1983, 7% more orphan drugs have been approved in the United States than in Europe, and 17% more were approved first in the United States than were approved first in Europe.

  • Several European countries formally evaluate up to 75% of new orphan drug approvals. Cost-effectiveness evaluations of orphan drugs are expected to increase in the near future.

  • There are fewer denials of orphan drug coverage in the United States than in Europe.

  • Patient cost-sharing is higher in the United States than in Europe.

  • While US payers often require prior authorization as a condition of reimbursement, European health authorities employ more stringent conditions, such as on-label indication restrictions, step edits, and coverage with evidence development.

“In the United States there is a definite trend toward much more patient cost sharing, more imposition of conditions of reimbursement, and in a few cases outright formulary exclusions,” according to according to Cohen. “The latter did not happen 10 years ago, patient cost sharing was much lower and often a fixed copayment rather than coinsurance-percentage of cost to payer-and there were no imposition of step therapy or quantity limits, and only minimal use of prior authorization.”

 

Payers are struggling to find ways, however ineffective those ways may be, to limit their financial exposure to orphan drugs, Cohen believes.

“Ten years ago the belief was that because orphan drugs target small populations their impact on the pharmacy budget was fairly limited,” he explained. “Payers now look at orphans differently in light of more approvals, expansion of indications, and higher prices. They can't really do much about the prices, particularly since many orphan drugs form unique therapeutic classes where demand is relatively inelastic-not as price sensitive. So, they focus on what they can do through formulary management.”

From a regulatory perspective, Cohen sees that the United States has a slight edge in terms of numbers of approvals and time to approval. Europe is catching up, however, as is evident by the fact that European approvals have outpaced US approvals since 2000.

In 2000, the European Medicines Agency enacted its version of the Orphan Drug Act.

“Patients in Europe are facing a qualitatively different set of challenges,” Cohen said. “While they generally pay little or anything at all for their prescriptions, they encounter more outright denials of access. That is, certain drugs are not placed on formulary at all, or wait to be placed on formulary until the health authorities make a decision-and this period can take more than 1 year in many instances.”

European patients also face more stringent conditions of reimbursement such as indication restrictions, according to Cohen.

“By contrast, insured US patients face fewer outright denials of access, but much higher levels of patient cost-sharing,” he said. “Coinsurance of 30% or more is common. Given the expense of most new orphan drugs that is a considerable financial burden, especially to those on relatively low fixed incomes. US patients also face a very high number of conditions of reimbursement. Conditions such as prior authorization are not nearly as stringent as the indication restrictions used in Europe. Yet, they are a ‘red tape’ burden to patients, providers, and pharmacists. And more than 75% of new orphan drugs get tagged with prior authorization."

Additionally, according to Cohen, in the United States, the increased use of step therapy is "striking."

"When I began doing research on formularies and coverage 15 years ago, step therapy was unheard of," he said. "Now, about 5% of all biologics and 5% of all orphan drugs are tagged with step therapy.”