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      Estimating the budget impact of orphan medicines in Europe: 2010 - 2020

      1 , 2 , , 1

      Orphanet Journal of Rare Diseases

      BioMed Central

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          Orphan drugs are a growing issue of importance to European healthcare policy makers. The success of orphan drug legislation in Europe has resulted in an increasing number of licensed medicines for rare diseases, and many more yet unlicensed products have received orphan drug designation. Increasingly the concerns amongst policy makers relate to issues of patient access and affordability, yet few studies have sought to estimate the future budget impact of orphan drugs. The aim of this study was to predict the total cost of orphan medicines in Europe between 2010 and 2020 as a percentage of total European pharmaceutical expenditure.


          A disease-based epidemiological model was created based upon trends in the designation and approval of new orphan medicines, prevalence estimates for orphan diseases, and historical price and sales data for orphan drugs in Europe (defined as Eurozone + UK). The analysis incorporated two stages:

          1) Predicting the number of diseases for which new orphan drugs will be approved over the next decade, based on an analysis of trends from the EU registry of orphan medicines;

          2) Estimating the average ex-factory drug cost across an orphan disease life cycle, from the year in which the first orphan medicine is launched to the point where the first medicine loses marketing exclusivity.

          The two sets of information were combined to quantify the annual cost of orphan drugs from 2010 through 2020.


          The results from the model predicted a steady increase in the cumulative number of diseases for which an orphan drug is approved, averaging just over 5 new diseases per year over the next 10 years. The annual per patient cost of existing orphan drugs was seen to vary between €1,251 and €407,631, with the median cost being €32,242 per year. The share of the total pharmaceutical market represented by orphan drugs is predicted to increase from 3.3% in 2010 to a peak of 4.6% in 2016 after which it is expected to level off through 2020, as growth falls into line with that in the wider pharmaceutical market. In sensitivity analysis peak-year orphan drug budget impact ranged between 3% - 6.6%.


          Although European orphan drug legislation has led to an increase in the number of approved orphan drugs, the growth in cost, as a proportion of total pharmaceutical expenditure, is likely to plateau over the next decade as orphan growth rates converge on those in the broader pharmaceutical market. Given the assumptions and simplifications inherent in such a projection, there is uncertainty around the base case forecast and further research is needed to monitor how trends develop. However, fears that growth in orphan drug expenditure will lead to unsustainable cost escalation do not appear to be justified. Furthermore, based on the results of this budget impact forecast, the European orphan drug legislation is not leading to a disproportionate impact on pharmaceutical expenditure.

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          Rare diseases, orphan drugs and their regulation: questions and misconceptions.

          Sustained advocacy efforts driven by patients' organizations to make rare diseases a health priority have led to regulatory and economic incentives for industry to develop drugs for these diseases, known as orphan drugs. These incentives, enacted in regulations first introduced in the United States in 1983 and later in Japan, Europe and elsewhere, have resulted in substantial improvements in the treatment for patients with a range of rare diseases. However, the advent of orphan drug development has also triggered several questions, from the definition of rarity to the pricing of orphan drugs and their impact on health-care systems. This article provides an industry perspective on some of the common questions and misconceptions related to orphan drug development and its regulation, with the aim of facilitating future progress in the field.
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            Orphan drug development is not taking off.

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              Cost effectiveness of self-monitoring of blood glucose (SMBG) for patients with type 2 diabetes and not on insulin: impact of modelling assumptions on recent Canadian findings.

               Sandra Tunis (2011)
              Canadian patients, healthcare providers and payers share interest in assessing the value of self-monitoring of blood glucose (SMBG) for individuals with type 2 diabetes but not on insulin. Using the UKPDS (UK Prospective Diabetes Study) model, the Canadian Optimal Prescribing and Utilization Service (COMPUS) conducted an SMBG cost-effectiveness analysis. Based on the results, COMPUS does not recommend routine strip use for most adults with type 2 diabetes who are not on insulin. Cost-effectiveness studies require many assumptions regarding cohort, clinical effect, complication costs, etc. The COMPUS evaluation included several conservative assumptions that negatively impacted SMBG cost effectiveness. Current objectives were to (i) review key, impactful COMPUS assumptions; (ii) illustrate how alternative inputs can lead to more favourable results for SMBG cost effectiveness; and (iii) provide recommendations for assessing its long-term value. A summary of COMPUS methods and results was followed by a review of assumptions (for trial-based glycosylated haemoglobin [HbA(1c)] effect, patient characteristics, costs, simulation pathway) and their potential impact. The UKPDS model was used for a 40-year cost-effectiveness analysis of SMBG (1.29 strips per day) versus no SMBG in the Canadian payer setting. COMPUS assumptions for patient characteristics (e.g. HbA(1c) 8.4%), SMBG HbA(1c) advantage (-0.25%) and costs were retained. As with the COMPUS analysis, UKPDS HbA(1c) decay curves were incorporated into SMBG and no-SMBG pathways. An important difference was that SMBG HbA(1c) benefits in the current study could extend beyond the initial simulation period. Sensitivity analyses examined SMBG HbA(1c) advantage, adherence, complication history and cost inputs. Outcomes (discounted at 5%) included QALYs, complication rates, total costs (year 2008 values) and incremental cost-effectiveness ratios (ICERs). The base-case ICER was $Can63 664 per QALY gained; approximately 56% of the COMPUS base-case ICER. SMBG was associated with modest risk reductions (0.10-0.70%) for six of seven complications. Assuming an SMBG advantage of -0.30% decreased the current base-case ICER by over $Can10 000 per QALY gained. With adherence of 66% and 87%, ICERs were (respectively) $Can39 231 and $Can54 349 per QALY gained. Incorporating a more representative complication history and 15% complication cost increase resulted in an ICER of $Can49 743 per QALY gained. These results underscore the importance of modelling assumptions regarding the duration of HbA(1c) effect. The current study shares several COMPUS limitations relating to the UKPDS model being designed for newly diagnosed patients, and to randomized controlled trial monitoring rates. Neither study explicitly examined the impact of varying the duration of initial HbA(1c) effects, or of medication or other treatment changes. Because the COMPUS research will potentially influence clinical practice and reimbursement policy in Canada, understanding the impact of assumptions on cost-effectiveness results seems especially important. Demonstrating that COMPUS ICERs were greatly reduced through variations in a small number of inputs may encourage additional clinical research designed to measure SMBG effects within the context of optimal disease management. It may also encourage additional economic evaluations that incorporate lessons learned and best practices for assessing the overall value of SMBG for type 2 diabetes in insulin-naive patients.

                Author and article information

                Orphanet J Rare Dis
                Orphanet Journal of Rare Diseases
                BioMed Central
                27 September 2011
                : 6
                : 62
                [1 ]GMAS, Building 3, Chiswick Business Park, London, W4 5YA, UK
                [2 ]Celgene Corporation, 86 Morris Avenue, Summit, NJ 07901, USA
                Copyright ©2011 Schey et al; licensee BioMed Central Ltd.

                This is an Open Access article distributed under the terms of the Creative Commons Attribution License ( http://creativecommons.org/licenses/by/2.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.


                Infectious disease & Microbiology


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