Why a whole-of-society commitment makes economic sense
By: Gina Cioffi, Senior Manager of Public Affairs at Chiesi Global Rare Diseases, a company member of the Rare Disease Company Coalition. This article was written in response to a new report – “The Burden of Rare Diseases: An Economic Evaluation” – authored by experts at IQVIA and Chiesi Global Rare Diseases.
Rare diseases represent a major societal issue with enormous costs and without a clear, concentrated, whole-of-society effort to address the burden on patients, families and caregivers.
At Chiesi Global Rare Diseases, we set out to studycost drivers contributing to the burden of rare diseases to determine the societal benefit of early diagnosis and availability of pharmaceutical treatments. Along with a number of recent publications on the societal and economic burden of rare diseases, our results concur that the magnitude of the cost burden is staggering. The full report – “The Burden of Rare Diseases: An Economic Evaluation” – is available for download.
We know that lack of rare disease data compromises care and adds complexity to the innovation and drug approval process. And, the full extent of the patient, family, and societal burden will remain mostly undocumented. Our study was done through systematic review of the literature as well as expert consultation. We sought to identify new ways to better understand the cost drivers and economic impact that a lack of available treatments poses. This endeavor is critical so that policymakers can understand the benefit of investing in pharmacologic innovation, and it will encourage the development of policies to accelerate the availability of, and access to, rare disease treatments.
Discussions with patient advocacy organizations and physicians led to the selection of 24 rare diseases, each with high unmet needs, across five therapeutic areas including metabolic, neurological, congenital, hematological, and immunological. The selection criteria included the degree of unmet need, relative importance to patient advocacy organizations, interest in the scientific community, prevalence, and apparent burden of disease.
Our assessment consideredthe direct, indirect, and mortality-related costs of the selected 24 rare diseases. Direct costs include treatment, medical procedures, hospitalizations, physician visits, home healthcare, and other medical costs. Indirect costs include patient and caregiver productivity loss, work loss, home changes, and traveling and accommodation for medical visits. Mortality costs are based on value of statistical life (VSL) and the difference between average life expectancy and that for people with a rare disease.
Among our findings:
Although most direct costs are covered by government and commercial insurers, substantial indirect and out of pocket expenses impact patients and their families. We found that cost of rare diseases would be, on average, 21% more expensive PPPY if there was no access to treatment, demonstrating further that therapy access can alleviate government and family burden.
Keep in mind that these overall findings may represent an underestimation. Social costs, including the impact on health-related quality of life, were not part of this analysis.
A major strength of this study is that it presents an economic tool for analysis of the positive impact of rare disease treatments. This data can help justify increased governmental investment to ensure wider patient access to therapies and policy proposals that are reflective of the unique challenges rare disease patients and companies face.
Immediate actions that can accelerate access to treatment include passage of the Newborn Screening Saves Lives Act, providing the Centers for Disease Control and Prevention (CDC) funding to increase its support for State Newborn Screening programs, and full funding of the Food and Drug Administration (FDA) Orphan Products Grant Program. Further focus to ensure legislative efforts prioritize and reflect the unique circumstances and needs of rare disease patients is another imperative.
Incentives for drug development, particularly the Orphan Drug Tax Credit (ODTC), have changed the trajectory for many rare disease patients and likely achieved significant reduction in federal spending and overall burden. Prior to the ODTC, the number of annual deaths from rare diseases was growing at a slightly higher rate than that from other diseases (2.0 percent versus 1.3 percent, respectively). In the 10 years following, the number of annual deaths from rare diseases declined at a rate of 3.1 percent, while the annual number of deaths from other diseases continued to grow at a rate of 1.2 percent. And, prior to the ODTC, only 38 drugs were FDA approved for rare diseases. Today more than 650 rare disease drugs have been approved by the agency.
Despite this success, the ODTC was targeted in the 2017 Tax Cut and Jobs Act when Congress reduced the total amount of the tax credit for qualifying clinical testing expenses from 50 percent to 25 percent. Our industry has yet to see the full impact of that reduction, and yet in the Build Back Better Act we faced another devastating reduction to the tax credit.
Our hope is that policymakers will continue to nurture and sustain innovation based on the positive economic return from rare disease therapies.
The bottom line is that access to therapies for people living with rare diseases generates significant value for society. Now is the time for the Administration and Congress to come together with rare disease stakeholders and implement actions prioritizing the unmet needs of 30 million Americans impacted by rare diseases.