Appraising orphan drugs: A
sceptics view
Christopher McCabe
ScHARR
University of Sheffield
Disclaimer
What follows is my opinion alone.
It draws on lengthy discussions with
colleagues – notably Karl Claxton, Ron
Akehurst and Aki Tsuchiya. The errors, of
course, remain mine.
I do not, cannot and will not speak on behalf
of NICE.
Here endeth the disclaimer!
Peter is 35 years old, his life expectancy is 5 years. He is married with 2
children (a boy aged 5, and a girl aged 3). The symptoms of his
disease mean that he is unable to maintain paid work, nor can he look
after the children at home. As a result his wife has had to give up work
in order to care for him and the children. There is no alternative
treatment. The prevalence of his disease is 1 in 20,000 population.
John is 35 years old, his life expectancy is 5 years. He is married with 2
children (a boy aged 5, and a girl aged 3). The symptoms of his
disease mean that he is unable to maintain paid work, nor can he look
after the children at home. As a result his wife has had to give up work
in order to care for him and the children. There is no alternative
treatment. The prevalence of his disease is 1 in 4,000 population.
Should we value health gain to Peter more
highly than health gain to John?
Overview
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•
•
•
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What are orphan drugs
Why some people think they are special
(Our) Silver Lining (their pockets)
A rationality test
What was the problem that OD legislation
attempted to address?
• Issues for appraisal processes
• Can we address these issues?
What are orphan drugs?
The United States Food and Drug
Administration (FDA) and the European
Medicines Evaluation Agency (EMEA),
have defined orphan diseases as ones with a
prevalence of @ 5 per 10,000 head of
population.
Examples of orphan diseases include:
•
•
•
•
Huntingdon’s disease
(1:20,000)
Haemophilia B
(1:25,000)
Motor Neurone Disease (1:25,000)
Variant CJD
(1:10,000,000)
Why some people think they
special
“Because so few individuals are affected by any one rare disease or
condition, a pharmaceutical company which develops an orphan drug
may expect the drug to generate relatively small sales in comparison to
the cost of developing the drug and consequently to incur a financial
loss.
There is reason to believe that some promising orphan drugs will not be
developed unless changes are made in the applicable federal laws to
reduce the costs of developing such drugs and to provide financial
incentives to develop such drugs; and it is in the public interest to
provide such changes and incentives for the development of orphan
drugs.”
US Food and Drug Administration
“Some conditions occur so infrequently that the cost of developing and
bringing to the market a medicinal product to diagnose, prevent or treat
the condition would not be recovered by the expected sales of the
medicinal product; the pharmaceutical industry would be unwilling to
develop the medicinal product under normal market
conditions….patients suffering from rare conditions should be entitled
to the same quality of treatment as other patients….”
European Union Regulation 141/2000
Three arguments are being advanced:
1. Financial viability of production of
evidence base for clinical efficacy
2. Equality of potential treatment for all
patients
3. Definition of high quality health care in
terms of pharmaceutical therapies.
Silver Lining
Orphan drugs are given preferential treatment:
• In Research and Development; through
additional tax incentives and direct funding.
• In licensing; through the acceptance of
lower levels of evidence (within a
frequentist paradigm); and
• In the market, through market exclusivity
for up to 10 years.
• i.e. public money is put into the Research and
Development process;
• The risk to the pharmaceutical company’s
investment is reduced; and
• The return on the investment is maximised
through the creation of a legal monopoly.
And
• The public don’t get any return on their
investment.
A rationality test
Ask yourselves the following question:
Would it be correct to spend $800,000,000 to
develop a drug to treat a disease from which
only one person suffers?
YES
or
NO
• If you answered ‘No’ then you have
accepted the concept of rationing in the
context of orphan diseases.
– Now we just need to work out the parameters of
our rationing system
• If you answered ‘yes’; now might be a good
time to leave because you wont like what
follows.
Another question:
Should we encourage companies to invest in the
development of therapies; where the cost of
production exceeds the value we place on that
health gain?
YES
or
NO
If you answered ‘No’; then the cost of
development & production argument for
treating orphan diseases differently can be
ignored.
If you answered ‘yes’; you have let your
dislike of the pharmaceutical industry get
out of hand!
What was the problem OD
legislation attempted to address?
• Treatments for some diseases will never be
developed in free market conditions.
• Why?
–
–
–
–
–
–
Size of market
Cost of Research and Development
Cost of distribution
Cost of administration to patient
Willingness (and ability) to pay for health
Evidential hurdles
• Why focus on market size?
– This is a very poor proxy for a very complex function
– The function of interest is the investment function for
experimental pharmaceutical therapies
• If the probability of investment is low, due to any
combination of investment parameters; the case
for ‘special treatment’ should be the same.
– But
• It is not simply about low investment potential
The problem
• A sense that individuals should not be left
without any hope of health care
– Observed WTP for public health care suggests
that society is truly altruistic in this regard.
• Can we assume drug therapy and health
care are equivalent in this regard?
– Palliative care – doubtful
– Disease modifying care - possibly
• Would society’s desire to provide health care to all
extend to ensuring the possibility of disease
modifying health care?
– This is an empirical question
– Note, this argument only applies where there is no
alternative disease modifying therapy.
• So, for special treatment consistent with the
problem identified by the OD legislation we need
two conditions:
– Low investment potential
– No alternative disease modifying therapy
To be clear …..
The OD legislation is a very poor
solution to the problem it claims to
address
Issues for Appraisal processes
• Can orphan drugs be appraised?
– Given the evidence base for orphan drugs, can
they be subjected to comparably robust
analysis?
• Yes – but only in a Bayesian Decision Analytic
Framework
Appraising rare diseases: the DA
Framework
• Decision analytic models calculate the expected
costs and outcomes of alternative courses of
actions using the ideas of choices, probability and
pay-offs.
• A decision is made on the balance of probability,
using the expected outcomes; with uncertainty
explicitly acknowledged.
• Additional research is only of value to the degree
that it reduces uncertainty and thereby the cost of
making the wrong decision.
• The cost of making a wrong decision is a function
of the size of the population to be treated.
• For rare diseases the value of further research is
less than for prevalent diseases; ceteris paribus.
– Decision analysis accepts lower standards of evidence
(i.e. more uncertainty) for rare diseases.
• Therefore the costs of meeting the evidential
criteria for appraisal do not have to be a threat to
provision of treatments for rare diseases.
Issues for appraisal contd.
• Orphan drugs will not be cost effective given
existing thresholds and case law.
– This is a political problem
– And/or a commercial decision
• Orphan drugs are potentially very expensive
– New enzyme replacement therapies may cost in excess
of £150K per person per year
– There are between 3,000 and 5,000 orphan diseases
– This issue can bankrupt the NHS
Should orphan drugs get special
treatment
?
Valuing the benefits of orphan
drugs
• We want treatments for rare conditions;
conditional upon their cost being no greater
than the value we place on the health gain
they produce.
• How do much do we value treatments for
people with rare conditions?
• Consider Peter and John
• Is rarity a good basis for an equity weight?
– How about existence of an alternative
treatment?
– Having dependents
– Limited capacity for health
– Age
• These can be treated as empirical questions
– NICE/NCCR&D Social QALY project
Characteristics of a special case
• Let me get back to you…..
C-E threshold or Equity-weighted
QALYs – an aside
• Some may argue for a higher C-E threshold
for orphan drugs – this is wrong;
– The threshold is our best guess of the cost per
QALY of the activities which will be displaced.
– It will not be affected by the value we place on
the health gain from an orphan drug.
• We may value the benefit from an orphan
drug differently – therefore, we should
weight the QALY.
Non-commercial diseases – an
aside
• Legislation promoting orphan diseases,
rather than non-commercial diseases more
generally, may not be as ethical and
altruistic as it first appears.
– It is easier to protect a monopoly which serves
a small number of people, than one which
serves large numbers of people.
Risks of special status
• Incentives to industry to reclassify drugs
(and diseases)
• Scope of pharmacogenomics to reclassify
diseases.
• Lower standard of evidence creating a
retirement home for failed therapies.
Can we address these issues
• Yes
• Redefine orphan drugs for appraisal
purposes in terms of the investment
function and the existence of disease
modifying therapy
• Where this analysis establishes that a drug
is an orphan – additional QALY weight may
be considered.
• Test empirically whether society would give
additional weight when there is no alternative
disease modifying therapy.
– If yes; obtain quantitative estimate.
• Monetize this value
Subtract value of tax breaks already provided
• Remainder is the extent of additional value which appraisal
process should consider.
– Caveat – a therapy with multiple potential indications
must have low investment potential across the total;
and at be the only disease modifying therapy for at least
one of these indications.
A cautionary tale
• The introduction of renal dialysis to US in the late
1960’s was a very hot political issue.
– The patient lobby arranged for a patient to give
evidence to congress whilst being dialysed.
– Congress approved the coverage of dialysis costs under
the US Medicare programme.
– In 1972 this was predicted to cost $200 million per
annum in the year 2000.
– In the year 2000, Medicare spent over $4 billion on
dialysis treatment.
• Open-ended commitments are a strong
incentive to the pharmaceutical industry.
• A simplistic interpretation of the orphan
drug status in the context of appraisal might
create such an open-ended commitment.
A modest proposal
• First; lets be explicit:
– there is no open-ended commitment to fund any therapy
– promoting investment in developing therapies which
cannot produce health gain at an affordable price is
wrong
– Equality of treatment is not synonymous with the
guaranteed availability of drug therapy
– Appraisals should support the provision of therapies
which produce health gain which is valued at least as
highly as the activities which are displaced.
• Second; lets find out:
– What factors influence the value we place on
health gain;
• Either characteristics of the disease; or
• Characteristics of the recipient of the treatment
– Then incorporate these data into our decision
analyses.
• Finally:
– Lets place the development and appraisal of
new therapies in the decision framework;
– That way, rare diseases will be given the special
treatment they deserve….
– And no more than they deserve!