Why do rare diseases often appear sky-high drugs?

On February 29, 2008, EURODIS, a non-profit organization, organized a large-scale campaign. The quadrennial date was chosen because its theme was to raise a voice for patients with rare diseases, such as “Leap year February 29.”
Since then, this event has been supported by public welfare organizations around the world, and the last day of February every year is designated as international Rare Disease Day.
In 2014, a public benefit activity named “Ice Bucket Challenge” became popular around the world, and rare diseases represented by ALS began to draw attention from all walks of life.
Rare diseases have low incidence of single disease and complex pathogenesis. The World Health Organization defines a single disease with a prevalence of 6.5 to 1 per 1,000 as a rare disease; According to the report of the Rare Diseases Special Interest Group of the International Pharmacoeconomics and Outcomes Research Association, the global average incidence of rare diseases is about 40 to 5 per 10,000.
Although the standards are still up in the air, when most people talk about rare diseases, their first impression is undoubtedly the “astronomical price” of rare drugs. In early 2021, GoodRx, a US-BASED drug price tracking website, released its list of the world’s 10 most expensive drugs, of which seven were rare disease drugs.

Zolgensma potion

The highest-priced “Zolgensma,” the first fDA-approved gene therapy for SMA in children under 2 years old (spinal muscular dystrophy), costs $2.125 million per shot. At the end of last year, noxinacan sodium injection, which is also used to treat SMA, was included in the domestic medical insurance, and the price of the drug was once rumored to be as high as 700,000 yuan per injection.
Objectively speaking, the extremely high technical threshold, long development and marketing cycle of rare drugs, as well as relatively small audience, are destined to make it difficult to reduce the unit price of rare drugs. However, it should not be ignored that in the face of rare diseases, a common problem for human society, both governments and pharmaceutical companies have made beneficial exploration and attempts to improve the accessibility of drugs for rare diseases.
Over 16 years of extremely long research and development

The high price of rare drugs dates back more than 40 years. In the early 1980s, medical Examiner Quincy, a popular US television series, devoted two entire episodes to the plight of patients with rare diseases and their families. The American people sympathized with the story, and letters of support for legislation related to rare diseases poured into the desks of members of Congress. There were also large-scale demonstrations in support of patients with rare diseases on the streets of Washington and even in front of the Capitol.
In April 1983, then-President Ronald Reagan signed the Orphan Drug Act. In the following years, the Congress also made many supplements and amendments to the bill, and the research and development of rare disease drugs ushered in the first peak.

Drugmakers are even having a hard time finding enough people for clinical trials.

In fact, beginning in the 1960s, the American medical community found that more and more patients suffering from hemophilia, muscular dystrophy and other diseases died because there was no cure available. The US Food and Drug Administration (FDA) and several medical experts have jointly called for a solution to this dilemma, but it has not attracted much attention. After the passage of the Orphan Drug Act, the shortage of orphan drugs has been alleviated.
According to relevant statistics, there were only 34 rare disease drugs approved by FDA from 1967 to 1983. In the years since, 370 drugs have been designated as orphan drugs, and 49 have been approved.
Research by Boston Consulting Group, the world’s leading consulting firm, shows that the market for orphan drugs has grown at an average annual rate of 18% in the five years since 2015 — by the end of 2020, the global market size of orphan drugs has exceeded $62 billion, and the figure is expected to reach $194 billion by 2030.

There used to be a famous “double ten rule” for drug discovery, with research taking 10 years and costing $1 billion.

At present, it is difficult to enter medical insurance for drugs whose annual treatment cost exceeds 300,000 yuan.

Contrary to the high market value, the giant is not very enthusiastic about the development of rare drugs. Before a new drug is put on the market, it needs to go through the stages of basic research, phase I/II/III clinical trial, application for market and pending approval.
Industry insiders point out that there used to be a famous “double ten rule” for drug development, which meant that research took 10 years and cost $1 billion. “There’s a famous joke in the pharmaceutical industry that if someone asks, how come a drug that costs $5 can sell for $200? And the drug developers would say, because it was the second one, and the cost of the first one was a billion dollars.”
What seemed like an astronomical figure at the time is now a thing of the past. Since the start of the 21st century, research and development costs for approved drugs have averaged more than $2.5 billion, according to research data.
The relatively small number of patients with rare diseases makes it more difficult to develop new drugs for rare diseases. On the medical level, the pathogenesis and diagnosis methods of most rare diseases are not clear. The small number of patients with rare diseases and their geographical dispersion also make it difficult to collect and analyze patients’ medical data, and it is even difficult for pharmaceutical manufacturers to find enough subjects for clinical trials of drugs.

Ankara, Turkey, 21 January 2022: A nine-year-old boy suffers from the rare disease progeria, which only four people are known to have in Turkey

Such a high level of research and development difficulties will naturally make drug companies back away. According to Jingding Pharmaceutical, the world’s top drug research contract contractor, basic research on an orphan drug takes an average of six years, clinical trials take an average of eight years, and waiting periods of two years add up to a total of 16 years.

Even if pharmaceutical companies make the determination to develop rare disease drugs, the too small market space also makes the high cost of rare disease drugs face a huge risk that it is difficult to recover. On the one hand, a smaller audience means that drug development costs are spread more evenly per patient; On the other hand, the high unit price makes it difficult for rare drugs to be included into the medical insurance, indirectly reducing the group of rare patients that can be covered by drugs, falling into a vicious circle.
In traditional pharmacoeconomic evaluation methods such as cost-benefit analysis, cost-effectiveness analysis and cost minimization analysis, drugs for rare diseases do not have advantages, so they are often rejected by medical insurance.
The Beijing Pain Challenge Foundation is one of the earliest public welfare organizations focusing on rare diseases in China. According to Guo Jinchuan, director of policy information research at the institute, pharmacoeconomics refers to the “incremental cost to effect ratio (ICER)” as the “increased cost for each additional unit of effect”. According to the WORLD Health Organization, ICER is cost-effective when it is in the range of 1 to 3 times GDP per capita — based on China’s GDP per capita, the value should not exceed 319,000 yuan.
This means that it is difficult for drugs that cost more than 300,000 yuan a year to be insured. Although the prices of some rare drugs are high, there are usually few users of the drugs, which has a limited impact on the overall cost of medical services, Guo said. Therefore, how to balance economic value and social value as far as possible is a test for health care policy makers of all countries.
Patent protection or abuse

In addition to being extremely difficult to develop, the sky-high price of orphan drugs is also related to the duration of patent protection.

Still from “ALS.

At present, there are two patent protection methods for orphan drugs: one is patent protection, that is to protect the product technology, formula and production method of the patented orphan drugs; The other refers to the market monopoly system for rare drugs. They’re parallel.
In traditional patent law, the duration of drug patent protection is usually only 20 years. In order to encourage the development of new drugs and compensate patent holders for the time lost in the process of drug development and waiting for approval, some countries, represented by the United States, have begun to try to establish a drug patent extension system.
Considering that some rare drugs may be effective but not yet patented, the United States has also given the green light to such drugs by establishing a market monopoly system. In the United States, for example, “orphan drug” status gives a drug a seven-year exclusivity period, regardless of whether it is patented or has expired.
In addition, the ORPHAN Drug Act provides for complementary measures to promote drug development, including tax credits of up to 50 percent for orphan drug development, state and private insurance support, a fast-track drug approval process, and relatively small clinical trials.
Multi-level patent protection measures are intended to establish a more perfect institutional escort system for rare drugs that are difficult to develop and have a small audience. But this series of policies in the implementation of the process, but inevitably appear deviation. Complicated patent protection inevitably leads to market monopoly, which in turn leads to inflated drug prices.
James Love, head of KEI, an international organization for Knowledge Ecology, believes that the audience for rare drugs is too small. After a rare drug is launched, it is basically a market monopoly. Setting a market monopoly for it is easy for drug r&d companies to take advantage of policy loopholes to make money.
About 80 percent of rare diseases are genetic, and less than 20 percent are related to tumors. However, insiders said that tumor-related drugs are generally the first choice for many pharmaceutical companies to develop rare disease drugs: On the one hand, there are relatively many cancer patients. On the other hand, if a tumor-related drug can be identified as a rare disease drug, it can not only make the pharmaceutical company obtain high profits, but also hinder its competitors from further investment in this field, which has violated the original intention of establishing patent protection and market monopoly mechanism.
In addition, rare drug legislation in Europe and the United States is also considered inappropriate. Steven Simoens, a professor at the University of Leuven in Belgium, argues that the price of orphan drugs has for a long time been determined solely by the number of patients with rare diseases, without taking into account other factors such as the number of times they are taken or the length of their treatment, which affect the profits of “orphan drugs”.
Panos Kanavos, associate professor at the London School of Economics, called for regular scientific assessments of the profitability of orphan drugs and for the length of exclusivity to be adjusted to reflect the situation. Therefore, the EU adopted the Orphan Drug Monopoly Period Evaluation Guide in 2008, and decided to implement an evaluation mechanism for the market exclusivity of orphan drugs. In the sixth year of market exclusivity, the sales of orphan drugs will be evaluated, and the market exclusivity period of the drug will be shortened if it is determined to be profitable.

On February 29, 2020, 407 people participated in the ice Bucket Challenge in Krasnoyarsk, Russia.
Lowering drug prices requires concerted efforts

As things stand, there is still a long way to go.
The first thing to mention is generic drugs. A few years ago, the hit movie dying to Survive drew the attention of many viewers to cheap generic Indian drugs. Guo said that for some rare diseases such as hemophilia, generic drugs can greatly reduce drug prices, which is practical for patients, but this is a drop in the bucket compared to the huge number of rare drugs.
Therefore, the synergy between national markets is particularly important. Guo Jinchuan believed that for a long time, the Chinese market was not considered until several years after the innovative drugs for rare diseases were listed in Europe and The United States due to reasons such as the fact that the drugs for rare diseases were not included in the medical insurance and the per capita GDP in China was less than $10,000.

About 80% of rare diseases are genetically inherited diseases, which are not talked about. Up to 20% are associated with cancer.

In recent years, a number of favorable policies for rare drugs in China have sent a positive signal to the international drug market. Many international pharmaceutical companies will submit their application for listing in China shortly after submitting the application to FDA of the United States or EMA of the European Union, which objectively improves the willingness of pharmaceutical companies to develop orphan drugs and also shows their confidence in the Chinese market.
In addition to policy, commercial approaches are also an important way to help orphan drugs break out of the price cycle. Guo Jinchuan said, nowadays many pratt &whitney type commercial supplementary health insurance have the terms of the protection of rare disease, in addition to routine payments, also innovative suppliers and payer consultation “pay by curative effect”, equivalent to bet on agreement between health and drug supply, when the curative effect is confirmed, health care and patients began to pay.
Of course, the high price of rare drugs is just one of the many challenges that patients with rare diseases face. Addressing the difficulties of patients with rare diseases requires a broader and more sustained focus than just talking about high drug prices and the ice bucket challenge.