Last week, The Institute for Clinical and Economic Review (ICER) published the white paper “The Next Generation of Rare Disease Drug Policy: Ensuring Both Innovation and Affordability.” While ICER has no regulatory authority, the non-profit organization influences payers and policymakers. It’s important manufacturers understand these potential policy changes and add their voice and evidence to the conversation so any important nuances aren’t missed.
The ICER white paper was published amid ongoing debate on how to best support the continued innovation of rare disease therapies while ensuring that the health system can absorb the cost and patients can afford the therapies.
In the past two decades, there has been a steep increase in orphan drug development and the number of orphan drugs approved in the U.S. Last year, 52% of FDA new drug approvals were for orphan or rare diseases. While this has fulfilled tremendous unmet patient needs, the budgetary impact and cost of treatment remains a critical issue.
ICER Policy Paper Key Points
ICER invited 29 payer and life sciences companies to provide viewpoints on reforming the orphan drug development, pricing and coverage process. However, they did caveat that none of these participants or their organizations should be considered as having approved of any element in the paper. The ideas put forth in this paper remain a mixed bag for life science companies.
Among the potential positives:
- Changing (increasing) the Orphan Drug Act (ODA) tax credit from 25% back to the original 50% (a positive for manufacturers).
- Increased federal funding to bolster evidence generation by expanding registries and help to improve Real World Evidence (RWE) collection (though manufacturers would need to navigate a more rigorous post-marketing surveillance environment).
Among the potential negatives:
- Eliminating Orphan Drug Act incentives for products that exceed a certain revenue threshold.
- Eliminating 340B exclusions for “partial” orphans (increasing discounts manufacturers would need to pay).
- Strengthening requirements of the FDA’s accelerated approval pathway since 1 in 9 orphan drugs are approved through this pathway.
- However, it is pertinent to note that any reforms to the pathway requirements would impact a much larger subset of therapeutics that are developed using this pathway.
What can life science manufacturers do?
- Manufacturers need to examine ICER’s specific policy proposals and the potential implications to their current and future pipeline and be prepared to communicate their positions to stakeholders.
- Manufacturers with a vested interest should seek to add to the conversation with their unique evidence to facilitate a balanced conversation that ultimately results in policies that support innovation, patient access and affordability.