Posted by Dirk Moritz on July 25th, 2018.
Part V in a Series on Rare Diseases
At various points in this series, we’ve mentioned that rare disease treatments are usually quite expensive. In fact, the typical RD treatment costs between $300,000 and $750,000 (US) per year.1 Those high costs reflect two key realities: 1.) Developing new therapies is expensive and risky, and 2.) Companies in rare disease markets must recoup their investments across very limited patient populations.
To ensure that patients can access the therapies they urgently need, pharmaceutical companies must work with payers to secure the desired levels of market access and reimbursement. To do this, they must successfully demonstrate the value of their therapies.
In rare disease markets, however, demonstrating value is far easier said than done. While achieving the desired levels of access and reimbursement is never easy, there are special challenges associated with rare diseases. In this article, we’ll outline 10 of those challenges. We’ll also review their implications for pharmaceutical decision makers.
Challenges to Demonstrating Value
High Drug Costs
As stated above, RD treatments are expensive. Smaller target patient populations for RD products often force companies to price their products higher. While the total budget impact for a given RD is still small and has traditionally not been questioned, high drug prices are coming under increasing scrutiny from public and private payers.
Unclear Patient / Disease Burden
The burden of a disease is a quantitative measure of the negative impact that disease has on a patient’s life. It can be measured by assessing parameters such as disease morbidity, mortality, direct and indirect financial costs, as well as other indicators. National payers and others often attempt to measure a disease’s burden on the patient’s quality of life, boiling it down to a monetary figure.
This helps them to determine how much to invest in treating the disease and in improving the patient’s quality of life. For many RDs, the disease burden and the extent of the unmet medical need has not been adequately quantified, making it difficult for pharmaceutical companies to incorporate that information in their messaging to payers.
Unclear Natural History
The natural history of a disease is the course an untreated disease takes from its inception to its natural resolution at recovery or death. For national health systems and other payers, understanding a disease’s natural history is critical for measuring its burden at various points, and for evaluating the impact of a potential treatment.
For many rare diseases, the natural history is poorly understood. This denies payers a reliable baseline for measuring the impact of a treatment, making it more difficult to determine its value.
Rare Genetic Disease Heterogeneity
Most rare diseases—about 80%―are of genetic origin.2 They are often highly complex with heterogeneous phenotypes. Three patients with mutations in the exact same gene may display very different levels of disease severity and rates of progression.
Spinal muscular atrophy (SMA) is one example. Type 1 SMA is most severe and will usually kill most of the affected infants before their fourth birthday. Type 3 on the other hand is much slower progressing with symptoms usually appearing after the first 18 months of life and many patients will live into adulthood. And yet, the mutations behind both types occur in the same gene. Hence, genetic mutations in the same gene can result in very different phenotypes.
This disease heterogeneity causes problems on several levels. For one, it makes clinical development more challenging because it’s tougher to recruit homogeneous patient populations. The challenge of patient rarity is always there, but when the heterogeneity factor is added to the mix, pharmaceutical companies have a much more difficult time recruiting for the patient profiles they need.
Per the focus of this article, it also causes problems for patient access and reimbursement. Continuing with the SMA example, consider Biogen’s SPINRAZA (nusinersen). This product is indicated for all patients with SMA, regardless of type. However, some national payers try to restrict treatment access to most severe cases, and some EU health care systems are particularly restrictive with SPINRAZA.
Challenging Clinical Studies
We’ve already mentioned that patient rarity makes clinical studies—specifically patient recruitment—more difficult. However, we’ll dig a little deeper into the problem.
With a more traditional product, such as a cardiovascular medication, a pivotal Phase 3 trial might have a few thousand patients. Such a large study population in a basically homogenous disease will provide a robust base of evidence.
Now consider an ultra-orphan indication like Hunter Syndrome. Pivotal studies related to Hunter Syndrome would likely have fewer than 50 patients. Given the heterogeneity issue described earlier, patient sub-groups could number in the low single-digits!
As a result, the overall evidence base is smaller and less robust for rare disease products. This exacerbates the challenges related to developing well-supported arguments related to a product’s value.
Unclear Regulatory Path and Study Endpoints
In rare diseases with no existing treatments, the regulatory pathway is uncharted territory. Clinical study endpoints that will be relevant for patients, physicians, and payers need to be defined by the drug company that is developing the novel treatment.
Unfortunately, those companies often have few experts (healthcare providers, patient advocacy groups, etc.) to consult with regarding study design and data generation plans. In some countries, there may be no one, leaving the company to forge ahead as best it can.
Poorly Understood Epidemiology
The epidemiology of a disease involves the study of its incidence and prevalence in a given population. When a pharmaceutical company submits a product reimbursement dossier to a national payer, it must include a range of information designed to help that payer determine the disease burden, the treatment’s likely impact, and the overall budget expenditure that will be required to cover the treatment. Good epidemiology data is critical to this process.
When a payer understands the patient population size and the cost of treatment, it can effectively allocate a budget for the treatment. After all, budget impact basically equals price multiplied by volume.
Unfortunately, the level of epidemiological understanding is limited for many rare diseases. Pharmaceutical companies are often placed in the position of having to make projections based on incomplete data and educated estimates that are based on smaller studies in a given geography.
If those estimates end up being wrong, then the funds budgeted by the payer might be insufficient. For example, let’s assume that a pharmaceutical company uses available epidemiology data to successfully argue that a payer should allocate a certain level of budget for its product. Then assume that the company’s disease awareness and patient finding campaigns are more successful than it had anticipated.
As usage of the product increases beyond expectations, the payer may quickly approach its allocated budget. In countries that utilize budget caps, that means that the price will need to be cut or some patients will need to be denied coverage. This sub-optimal result could have been avoided if better data had been available. Unfortunately, better data isn’t often available.
Increasingly, multiple competitors are developing treatments in rare diseases that would commercially only have space for a very limited number of players. The added focus on rare disease research will be a great positive for patients, but it’s increasing the competition for those companies operating in the space.
Shire, Genzyme / Sanofi, and others are developing or marketing products for Fabry and Gaucher disease. In Duchenne muscular dystrophy, competitors include Sarepta, Roche, Pfizer, and others. Returning to our SMA example, Novartis / AveXis and Roche are developing products, while Biogen’s SPINRAZA is the current standard of care.
That’s a lot of leading companies competing in some relatively small market spaces. All these future comparators will impose a further hurdle to developing robust payer evidence, and payers may even request comparative data.
Complex Mechanisms of Action (MOAs)
Rare disease assets often have complex and novel MOAs. These may be hard to explain to payers, though this obstacle is certainly not the most difficult one facing pharmaceutical companies.
HTA and CE Methodologies Not Suited for Rare Diseases
Health technology assessment (HTAs) and cost-effectiveness (CE) evaluations are systematic evaluations of a health technology’s impact, both direct and indirect. HTA/CE evaluations are used by a number of cost-conscious countries, notably by the National Institute for Health and Care Excellence (NICE) and National Health Service (NHS) in the United Kingdom, to inform reimbursement and coverage decisions.
A key metric used in HTA/CE evaluations is the quality-adjusted life year (QALY), a generic measure of disease burden, including both the quality of life as well as the quantity of life lived. A year of life in perfect health basically equates to one QALY. As one might expect, being dead is good for exactly zero QALYs. A treatment’s value can be estimated by assigning a value to a QALY (or some fraction thereof), then determining how the treatment alters the QALY score.
In the past, NICE has applied a standard threshold of £20,000 to £30,000 for each QALY gained. With drug prices that far exceed these thresholds, it’s clear that for many rare diseases, the QALY and existing metrics are not sufficient for evaluating a product’s value. Some companies have advocated novel frameworks for determining pharmacoeconomic value. They must lobby national health services to accept those frameworks.
Implications for Pharmaceutical Companies
Novel rare disease treatments must address clear unmet needs. Companies must develop robust clinical data across the largest spectrum of patients possible (different age groups, disease type and severity populations, etc.). They must also formulate powerful value stories—backed by sound pharmacoeconomic data—to ensure the appropriate levels of coverage. As they work to do all that, they should keep the following thoughts in mind.
Establish the Natural History of the Disease
As stated earlier, the natural history of many rare diseases is poorly understood. Companies should make a significant effort to understand the natural history of the disease(s) they are addressing. Disease registries and NHoD studies may be required to help define optimal study populations, clinical study endpoints as well as the patient disease burden.
Establish Patient Burden
Related to establishing the natural history of disease, companies must also work to more fully understand and fully quantify all aspects of the patient disease burden. Partnering with patients, patient advocacy groups (PAGs), and others will help with this effort, enabling the company to build an important part of the payer value story.
Engage Early with Patients and PAGs
While establishing disease burden is important, there are other reasons to engage early with patients and PAGs. Early engagement can also inform clinical study design, endpoint development, and facilitate patient recruitment into clinical studies. In addition, the relationships will become even more valuable, as patients and PAGs can act as advocates for patient access and funding. Early engagement and establishing trust is critical for RD companies.
Engage Early with Payers
It’s almost always a good idea to engage with payers early in a drug’s development cycle. With rare disease drugs, it’s even more highly recommended. Early and transparent engagement with payers can help the company understand payer requirements and objectives, get input on endpoints, test and refine the value story, and educate payers about the product and its value.
Generate Epidemiology Data
Early generation of robust and credible epidemiology data is critical. In many geographies it is critical to generate country-specific data as epidemiological data from other countries my not apply and might not be accepted by payers.
Provide Early and Favorable Clinical Experience
If a novel product demonstrates good results during clinical development, companies should provide that data as quickly as possible. PAGs will be extremely interested in seeing it, and they will likely share it with relevant healthcare providers and affected patients.
Potentially, the medication could be made available even before a company starts commercializing a RD drug via an early access program (EAP). EAPs offer a unique opportunity to provide the best possible early experience with a RD drug for both patients and health care providers. Obviously, an early and favorable experience will have very positive effects for successfully launching a novel RD drug.
Generate Real World Evidence
Continuing with the point about providing early and favorable clinical experience: It’s very important that the company complement clinical studies with real world evidence (RWE), either in the context of an EAP or any kind of post marketing data. To do this requires a clear plan, of which disease and treatment registries can be important parts.
Develop Effective HTA/CE Frameworks For RDs
Pharmaceutical companies should work with national payers to pioneer novel approaches for expressing the value of rare disease assets by adapting existing HTA/CE frameworks to the specific situation of RDs. As an example, NICE has recently started to fund a few drugs for ultra-rare diseases under NICE’s Highly Specialised Technologies Programme and also intends to raise the threshold of the cost per QALY to £100,000 and higher. Companies will need to lobby national payers to accept novel RD specific frameworks to make the difficult task of demonstrating value easier in the long-run.
Create “Humanistic” Arguments for Rare Disease Funding
Value stories for RD products must be robust and well-supported from a pharmacoeconomic standpoint. However, they can be supplemented by arguments from the human perspective.
For example, most RDs are genetic conditions that have nothing to do with personal choices made by the patients. By contrast, many large disease categories, such as diabetes, cardiovascular disease, obesity, and cancer are life-style related (though not always).
RD patients are innocent victims in the truest sense of the concept and deserve to get the treatments they need. These arguments won’t be enough to achieve reimbursement goals by themselves, but they can bolster well-constructed value stories.
When we asked decision makers in companies with rare disease products to list their biggest commercial challenges, demonstrating value was always in the top three. As payers become more restrictive, demonstrating value is only going to become more important…and difficult.
While every situation is different and calls for a custom approach, there are key ideas and principles that companies should keep in mind when developing new RD products and creating payer strategies. We’ve outlined some here, but we’ve only scratched the surface of this extremely important issue.
- Rare Disease Report. Orphan Drugs and Drug Pricing in 2017. Available at http://www.raredr.com/news/orphan-pricing-2017
- Global Genes, Rare Diseases: Facts and Statistics. Available at https://globalgenes.org/rare-diseases-facts-statistics/, accessed 17 July 2018