Duchenne muscular dystrophy affects approximately 1 in 3,500 boys. According to The Journal of Rare Disorders, the average rare-disease patient visits 7.3 physicians during a 4.8-year span before receiving an accurate diagnosis. Photo credit: University of Florida
The grand secret of the rare-disease space? That rare diseases aren’t really that rare, with around one in ten Americans afflicted. But with drugs treating these conditions priced at sky-high levels, can the healthcare system shoulder the financial burden they impose?
Orphan-drug development has escalated at a feverish pace since 2013 and shows no signs of slowing. Some 40% of drugs approved in 2014 carried a rare-disease indication, and sales in the space were expected to exceed $100 billion in 2015. The FDA announced in early January that it had approved 21 drugs to treat rare diseases in 2015, a number representing nearly 45% of the 47 products approved that year. And it came amid a turbulent backdrop of price and incentive bickering.
“Rare diseases have gained considerable traction in the past 10 years,” says Hans-Peter Guler, MD, SVP of cardiovascular and endocrinology clinical development at INC Research.
Individual rare diseases are easy for companies to dismiss in that they affect only a small proportion of the population. That said, the fact remains that 30 million Americans are afflicted with a rare disease. “That’s one in ten Americans,” claims Discovery USA’s VP and scientific director Nafeez Zawahir, MD.
Rare diseases weigh on an already-strapped U.S. healthcare system. “Orphan indications carry a huge burden,” explains Sue Washer, president and CEO at AGTC. “Finding viable treatments to improve the health and quality of life of rare-disease patients benefits the healthcare system.”
According to The Journal of Rare Disorders, the average rare-disease patient visits 7.3 physicians during a 4.8-year span before receiving an accurate diagnosis. In an ideal world, generalists know the value of referring to specialists, who are in turn armed with meaningful disease education. “It’s not possible for PCPs to identify and diagnose every one of the more than 7,000 rare diseases,” Zawahir acknowledges.
Patients with ultra-rare diseases—like hereditary orotic aciduria, which affects 20 children worldwide—know the frustration of an elusive diagnosis all too well. Wellstat Therapeutics’ Xuriden got the FDA nod to treat the metabolic disorder in 2015.
Duchenne muscular dystrophy has a few contenders in the drug research queue. BioMarin took a late-2015 blow to the chin from the FDA regarding its DMD drug Kyndrisa (drisapersen).The agency expressed concerns over the agent’s ability to increase its level in the blood. Ruling the clinical evidence inconsistent, the FDA will revisit the application this year.
BioMarin rival Sarepta Therapeutics is also in the hunt with eteplirsen for DMD. The first agent to pass through the FDA gates will be awarded first-line treatment in a market reportedly worth more than $6 billion. “Depending on the results of the PDUFA, the products could end up on the same launch time frame,” says Neal Dunn, partner at Trinity Partners.
Actelion’s Uptravi (selexipag), a follow- up drug to its original blockbuster Tracleer, won FDA approval for pulmonary arterial hypertension in December 2015. Shire’s Natpara (parathyroid hormone), approved for hypoparathyroidism, will likely reach $650 million in peak revenue. The FDA green-lighted Alexion’s Kanuma for treating lysosomal acid lipase deficiency; analysts expect sales to reach $1.5 billion.
See also: Top 25 orphan drugs
Many wonder how close the U.S. is to approving the country’s first gene therapy. UniQure’s Glybera made waves in Europe in 2012 when it snapped up approval for patients with lipoprotein lipase deficiency. Alas, the gene therapy hit some snags last summer when the FDA requested data from another clinical trial in the BLA filing; UniQure CEO Jörn Aldag stepped down from his post at the end of 2015.
Despite uniQure’s setback, Coté Orphan principal and CEO Timothy Coté, MD, believes a U.S. gene therapy approval is around the corner. “The fact that no gene therapy has been approved in the U.S. is respective to the FDA’s high standards,” he says.
Spark Therapeutics is inching ever closer with its gene therapy candidate SPK-RPE65, which treats patients with RPE65-mediated inherited retinal dystrophies. On the heels of positive trial data, Spark plans to file its BLA with the FDA this year. “Spark is one of the first companies to apply for licensure in the U.S. for a rare eye disease and is one of the first in gene therapy,” Washer says. Also in the ophthalmology space, AGTC is working on gene therapies for the most common form of X-linked retinitis pigmentosa (XLRP) and early-onset retinal-degenerative disease X-linked juvenile retinoschisis (XLRS).
A 28-day cycle of Takeda’s multiple myeloma drug Ninlaro (ixazomib) is list-priced at $8,670.
Drug prices lit contentious fires in 2015, particularly with news of companies like Valeant Pharmaceuticals and Turing Pharmaceuticals imposing sharp price hikes on older drugs purchased for bargain-basement prices. The industry is holding its breath to see if a brewing price storm will hinder future R&D investments in the orphan-drug space.
Though not exactly a parallel, many wonder whether the extreme price tags attached to orphan drugs are sustainable. Take Takeda’s Ninlaro (ixazomib), approved to treat people with multiple myeloma who have received at least one prior therapy, for example. Reports show a 28-day cycle of Ninlaro is list-priced at $8,670. “There’s a rationale for orphan drugs to sell for more,” Coté says. “Price points can be eye-popping at marketing authorization — but down the road, competition comes in and prices drop.”
Sponsors that conduct thorough pricing research with payers ahead of time will have an edge. Industry experts recommend building value-based pricing justification so that everything is in place when a product is approved. This approach helps companies prepare for sticker shock—say for a treatment priced at $100,000 or more.
Additional pressure comes from orphan drugs finally coming into view on the payer radar. According to Discovery USA’s Zawahir, insurers overlooked orphan-drug prices because so few patients on their plans needed them. “The public may be unprepared for the concomitant increases in insurance premiums,” he notes.
As more disease states are explored, orphan-drug companies are bracing for more competition. “For products in development, developers need to think about the reality of competition, positioning, and differentiation,” Dunn says.
Clinical trials usher in their own challenges for orphan- drug sponsors, ranging from limited patient populations to few study site options, according to Medpace’s clinical trial manager Michelle Petersen, MS. “Pharma needs to take a patient-centered approach to set up for retention and recruitment success,” she explains. “The needs of patients and their families should be first and foremost.”
Pediatric conditions magnify the burdens of rare-disease trials, with young patients relying on family members for transport, Guler explains. “Hotels, taxis, and parking all need to be organized in a convenient way,” he says. “And reimbursement is an important part of it.”
The increased collaboration Petersen has seen among advocacy groups, registries, and biopharma has encouraged her. “Working in rare disease, you become part of a community,” she adds. “Advocacy groups know what patients want.”
Raising legal eyebrows
Although clearly a boon for both patients and biopharma, the many incentives of the Orphan Drug Act—among them marketing exclusivity and tax credits—have been highly scrutinized. “At ODA’s 2013 anniversary, everyone trumpeted its incentives as critical to establishing a larger rare-disease market,” notes FaegreBD Consulting principal Nick Manetto. Yet various interpretations of the law have some camps up in arms. In particular, drugmakers are fending off allegations from a crowd of Johns Hopkins Medicine experts who voiced concerns in an American Journal of Clinical Oncology report.
These experts believe that an ODA escape clause is lining drug developers’ pockets to the tune of billions of dollars. They point to the overwhelming number of orphan drugs in the top-selling global medication list—seven out of ten, to be exact. Among others, AbbVie’s Humira was initially approved for an orphan indication.
See also: Imbruvica eases AbbVie’s patent worries
The companies continue to reap the benefits of orphan designation while the drugs are often used off-label for other indications. To offset the profits of an orphan drug turned blockbuster, experts suggest requiring pharma companies to repay the subsidies.
“We may need to revisit the ODA to ensure that incentives remain to develop drugs for rare conditions and those incentives don’t become diluted by loopholes,” Zawahir says.
Devised to encourage deeper research investments in the rare-disease space, the 21st Century Cures Act was passed by the House of Representatives last summer and is awaiting approval by the Senate. “This piece of legislation is the most important event in rare disease,” Coté says.
Though intended to spur innovation, detractors are most concerned with a provision aimed to increase the existing seven-year exclusivity period by six months. This move, critics say, could send ripple effects through the market, ultimately forcing taxpayers and insurers to fork over up to $11.6 billion extra during a 10-year period.
In the meantime, the pediatric priority review voucher program, expected to sunset in March, was reauthorized through September. The voucher system was established in 2012 to reward rare-disease product development. Coté notes that election-year fanfare will likely carry the extension.
This comes on the heels of eye-popping profits for voucher exchange deals. AbbVie set a new record when the company coughed up $350 million for United Therapeutics’ voucher, awarded by the FDA for the approval of neuroblastoma drug Unituxin. The hope from the rare-disease community, according to Manetto, is that incentive programs will continue to produce results — and lead more companies to enter and stay in the space. “Parties shouldn’t be too critical of how companies are using the vouchers,” he says.