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New Study Debunks Myths About Orphan Drug Act and Rare Disease Drug Costs

September 20, 2016
The Orphan Drug Act has been targeted recently by the insurance industry and its allies in the media, but in the face of withering criticism and unjustified allegations, a new study from IMS Health shows that concerns about rare drug costs are completely misguided.

Kaiser Health News’ Sarah Jane Tribble reports the study, published in Health Affairs, “analyzed U.S. pharmaceutical spending from 2007 to 2013 on more than 300 drugs that had orphan approval under the 1983 Orphan Drug Act.”

“The review found that orphan drug spending in the United States totaled $15 billion in 2007 and $30 billion in 2013, an increase from 4.8 percent of total pharmaceutical spending to 8.9 percent. The current study projects orphan drug spending will remain fairly stable as a proportion of total drug spending. That stands in contrast to other published reports that estimate orphan drugs will account for 20 percent of worldwide spending on drugs (other than generics) by 2020.”

Tribble writes:
“Still, the authors write, ‘in a broader context, drug expenditures are minimal when considered as part of total health care expenditures.’ Total orphan drug spending represented approximately 1 percent of total U.S. health care spending, according to the authors.”

While rebutting claims that rare disease drugs are becoming a large percentage of overall prescription drug spending, the results also confirmed the importance of the Orphan Drug Act.  In fact, Victoria Divino, a senior consultant at IMS Health and author of the study, attributed the growth from 4.8 to 8.9 per cent to the increase in rare drug approvals by the FDA – a happy occurrence indeed for patients with rare diseases.

The value these drugs provide is beyond dispute. In recent weeks, the Orphan Drug Act has been targeted and maligned by AHIP and its allies.  And The Washington Post unfairly attacked the law through selective and unsubstantiated allegations back in August.

I responded then on this blog and reminded readers that since the law was passed more than 400 new orphan drugs have been approved by the FDA—compared to just 34 before. Before this vital law was enacted, families whose loved ones suffer from rare diseases were often forgotten. Now, these families have been given hope.

BIO will not stand idly by while this law is undermined. I will stand up and fight not only for this law, but more importantly for the 30 million Americans—many of them children—affected by rare diseases.