Conventional wisdom holds that orphan drugs treat rare (by definition) and more severe diseases. Because they treat diseases with significant unmet needs, their health benefits per person are large. But are they really? Does conventional wisdom align with the evidence?
To answer the question myself and colleagues at FTI Consulting, including co-author Marie Steele-Adjognon, conducted a study to answer this question. Our white paper “Quantifying the Value of Orphan Drugs and the Impact of the IRA Sole Orphan Exclusion” applied a 4 step approach:
Step 1: Identify FDA approved drugs. The analysis looks at FDA drugs approved between 2011-2024Step 2: Identify CEA studies. We examined the life years gained across the drugs identified.Step 3: Extract data. We measured life year gains from the most relevant CEA study, and–if needed–imputed LY gained based on baseline survival and the estimated hazard rate. Step 4: Statistical analysis. We compared to LY gains for orphan drugs and non-orphan drugs. We also examined the potential health benefits at risk from not fully exempting orphan drugs from Medicare Drug Price Negotiation.
Based on this approach, we found that:
Orphan drugs impact on patient survival is more than 4 times larger than the survival
gains of non-orphan drugs.Orphan drugs with multiple rare disease indications provide more than 3 times the
survival gains as non-orphan drugs.Because many orphan drugs treat multiple rare and non-rare diseases, removing them
from ‘sole orphan’ exclusion, 58% of orphan drugs would be eligible for Medicare Drug Price
Negotiation.If the sole orphan exclusion prevented all orphan drugs with multiple indications to be
developed, over 16.7 million life years would be lost over the next 15 years.
You can read the full white paper here.
