FDA officials approved a record number of rare disease treatments last year. One groundbreaking medicine treats an inherited bone condition that causes intense pain and immobility. Another treats Fabry disease, a genetic condition that can lead to kidney failure or stroke.
Breakthroughs like these offer hope to 30 million Americans living with rare diseases. But there’s still a long way to go. Scientists estimate there are 7,000 rare diseases, each of which afflicts fewer than 200,000 people. The majority of these ailments — 95 percent — lack a single approved treatment.
Unfortunately, one prominent healthcare nonprofit could undermine research into rare diseases.
The group, the Institute for Clinical and Economic Review (ICER), analyzes the “cost-effectiveness” of many new FDA-approved drugs, including treatments for rare diseases. Because it relies on flawed assumptions, ICER mostly concludes that rare disease treatments aren’t worth the price.
ICER hopes that private and government health insurers will use its findings to decide which medicines to cover. If the group’s message — rare disease treatments aren’t worth it — wins the day, drug companies may well stop researching and developing rare disease treatments. And millions of Americans would lose access to life-changing therapies.
ICER analyzes drugs’ cost-effectiveness using a metric called a “quality adjusted life year.” Essentially, a QALY quantifies the cost of providing a patient with 12 additional months of perfect health.
For instance, pretend a completely healthy, middle-aged woman has an incurable — but dormant — genetic disease that will kill her almost instantly once it’s activated. If a treatment could delay activation by one year, and the treatment costs $30,000, then ICER would say the treatment costs $30,000 per QALY.
From the outset, this metric effectively discriminates against elderly and sick people, persons with chronic conditions, as well as people living with disabilities. ICER’s position is that these individuals aren’t in perfect health to begin with. So, the group doesn’t count an additional 12 months of life expectancy as a full QALY. The discounted QALY is in effect a determination of discounted value assigned to a person, a value judgment that may be at odds with their personal opinion about their own life in its totality, in the context of family, workplace, and community.
For example, our hypothetical treatment for a genetic disease might still extend a 90-year-old infirm patient’s life by one year, but ICER might count the gain as only 0.5 QALY, due to the perceived lower quality of his/her life. As a result, that same $30,000 treatment would cost $60,000 on a QALY-adjusted basis — potentially blocking access and affordability for patients.
Rare disease drugs rarely meet ICER’s standards.
Consider new medicines for cystic fibrosis, a fatal genetic disease that damages patients’ lungs and gastrointestinal systems. ICER admits that all recently approved treatments are “very effective” and extended patients’ lives by years, on average.
But ICER believes the drugs wouldn’t be a “cost-effective” investment unless prices declined by more than 70 percent. If prices actually dropped that much, researching, developing, manufacturing, and distributing those medicines would almost certainly prove unlikely and unsustainable.
Rare disease drugs are expensive for a reason. It can take over a decade and $2.6 billion to bring a new medicine to patients. Few experimental compounds even make it out of the lab.
Pharmaceutical companies aren’t charities — they have to charge enough to earn back their development costs and potentially deliver a return to investors. For common conditions that afflict millions of patients, companies might only need to charge a few dollars per pill to recoup their costs. Mass market drugs, like cholesterol-lowering statins, are also easy to manufacture and distribute, which helps keep overhead costs in check.
By contrast, many rare and ultra-rare diseases only affect a few thousand — or even a few dozen — people. So companies need to generate far more revenue per patient just to break even. Rare disease treatments also tend to be fragile, large-molecule drugs that require numerous manufacturing, shipping, and storage precautions — further inflating costs.
ICER largely disregards these differences. The group evaluates rare disease drugs using roughly the same cost-effectiveness thresholds it uses for traditional, mass market medicines. Given this rigged scale, it’s no wonder that rare disease treatments score poorly.
If health plans follow ICER’s recommendations and limit or stop covering rare disease medicines, drug companies will be under pressure to stop developing those treatments. After all, it’d make no sense to spend billions creating a medicine if health plans won’t pay for it and patients won’t receive it.
Scientists are currently developing more than 560 medicines to treat rare diseases. Many include potential cures for rare genetic diseases that disable and kill. That research will very likely come to a screeching halt — causing patients to lose access to lifesaving drugs — if insurers fail to recognize the faults in ICER’s reasoning and continue to adopt the group’s increasingly disputed recommendations.
Randall Rutta, the former president and CEO of Easterseals, is board chairman of the Partnership to Fight Chronic Disease.