Oct. 18, 2017

Dive Brief:

Orphan medicines account for only about 8% of total U.S. drug spending, new research shows, even as the number of rare disease drugs on the market has jumped sharply over the past five years.

In 2016, the U.S. spent $36 billion on orphan indications of approved drugs — up nearly seven-fold from 2000, but still a small share of the overall medicine budget, according to a report from QuintilesIMS Institute

Both pharma and biotech alike have focused more investment in recent years into developing new drugs for rare diseases, lured by the prospect of greater pricing power and higher barriers to entry for competitors.

Dive Insight:

The Orphan Drug Act, enacted in 1983, is largely credited with spurring drugmaker interest in markets characterized by small patient populations and debilitating, but less-studied, diseases.

Regulatory incentives like longer market exclusivity mean drugmakers can be richly rewarded for successfully developing new rare disease drugs. Since many of these diseases have few, if any, existing treatment options, companies with an approved orphan medicine have greater pricing power and a clearer value proposition for payers.

Since passage of the Orphan Drug Act, 449 distinct drugs with an orphan indication have been OK'd for sale by the Food and Drug Administration. More than 130 of those approvals have come in the last five years, indicating the rising level of interest from industry.

Growth in spending on orphan medicines hasn't matched those skyrocketing approval numbers. Since 1993, the share of total US spending on drugs attributable to orphan indications has risen from 3% to 8% last year, according to QuintilesIMS.

While some orphan drugs command prices in the hundreds of thousands of dollars, QuintilesIMS found the median annual cost across the board was $32,000. For the top 10 drugs by use, such as Roche's Gazyva (obinutuzumab), that figure dropped to just under $15,000.

To be sure, both price points are still expensive. Yet the data crunched by QuintilesIMS shows the priciest orphan drugs are not necessarily representative of the larger product group.

QuintilesIMS tracked both drugs approved only for orphan indications as well as those with both orphan and non-orphan indications, a group that totaled 98 mixed-use drugs.

Of those nearly 100 drugs, 54 were approved for a non-orphan indication first before being green lit for use in a more niche rare disease. These numbers provide some evidence for the concern that drugmakers are using orphan indications to help extend the regulatory protection for drugs used in wider populations.

AbbVie Inc.'s Humira (adalimumab) is a good example of this, having been OK'd for five non-orphan indications before the drugmaker sought regulator sign-off for use in several rarer diseases like hidradenitis suppurativa and pediatric Crohn's disease. 

"For those molecules with both orphan and non-orphan indications, the non-orphan indications typically represent the majority of their use and sales," the report noted. 

Editor's note: This post has been updated to include further detail on drugs with approved for both orphan and non-orphan indications. 

Recommended Reading:

·        QUINTILESIMS INSTITUTE Orphan Drugs in the United States

In rare move, FDA reverses course on drug developed by CEO with ties to Trump→

The Food and Drug Administration has changed its tune on an experimental drug for a deadly rare disease, withdrawing a request that the company developing it run another clinical trial. The unusual move comes after President Trump met with the company’s CEO — and promised to speed up what he called a “slow and burdensome” process for drug approvals.

Amicus Therapeutics, a New Jersey biotech company, announced on Tuesday morning that the FDA had given it the all-clear to submit for review its treatment for Fabry disease, an inherited disorder that often leads to fatal organ damage. The FDA is not guaranteeing that the drug will be approved, but is signaling that regulators believe the data are strong enough to merit consideration. That’s a reversal: Just last year, the FDA asked Amicus to do another study on side effects, which would have delayed approval by two years.

Now, Amicus says it’s on track to apply for approval by the end of the year. Amicus CEO John Crowley told STAT that if all goes well, the drug, Galafold, could reach the U.S. market in the second half of 2018. It’s already on the market in Europe.

Crowley has been actively and very publicly pressing the FDA to move faster to get rare disease treatments to market.

In February, he met with the president to discuss the issue. Later that night, Crowley’s daughter, Megan, who has a rare disorder called Pompe disease, sat in the first lady’s box during Trump’s first address to a joint session of Congress. Trump hailed Megan by name and promised to speed treatments for other rare conditions.

“If we slash the restraints, not just at the FDA but across our government, then we will be blessed with far more miracles like Megan,” Trump said.

Crowley, who has been repeatedly mentioned as a possible Republican candidate for Senate, dismissed the idea that Trump’s rhetoric had any bearing on the FDA’s Amicus decision.

In his mind, the FDA is in the midst of “an evolution” rather than a “seismic shift,” one driven as much by the bipartisan 21st Century Cures Act signed by President Obama as by Trump’s prodding.

“I don’t believe at all politics played a role in this,” Crowley said. “I wish it were so easy.”

Amicus has been developing Galafold for more than a decade and, as recently as 2015, looked to be on the path to FDA approval for the drug. Then regulators took issue with Amicus’s supporting data, requesting an entirely new trial to flesh out Galafold’s effects on the gastrointestinal symptoms of Fabry.

The U.S. delay scrambled Amicus’s timeline, tanked its stock price, and left Crowley frustrated.

European regulators apparently saw no problem with Galafold’s safety, approving the drug in 2016. But “the FDA has declared that the only pathway to availability for Fabry patients in the United States is predicated on yet another study,” Crowley wrote in a March essay published by the Observer, which is owned by Trump’s son-in-law, Jared Kushner. “And while we do that, patients wait. All get sicker. And some will die.”

Fabry affects about 3,000 people in the U.S., according to Amicus. Galafold is intended treat the roughly 50 percent of those patients who have certain genetic mutations. The list price in Europe is about $260,000 a year, according to Biocentury.

The FDA’s decision on Amicus comes amid a whirlwind few months for the new commissioner, Scott Gottlieb. Since taking office in May, Gottlieb has repeatedly pledged to speed up the path of new treatments for serious diseases, announcing a flurry of initiatives aimed to make the agency more flexible.

ICER Eyes Gene Therapy: Category-wide Policy In Works As Spark Moves To Approval→

Executive Summary

Institute for Clinical and Economic Review launches value assessment of Spark's blindness treatment vortigene neparvovec, the first gene therapy likely to reach the US market, in an effort to facilitate development of coverage policies.

The public discussion over how insurance should pay for gene therapies is moving to center stage in the US as Spark Therapeutics Inc.'s vortigene neparvovec, a one-time treatment for inherited blindness, heads toward a possible approval by early 2018.

Spark's treatment became the first gene therapy to be submitted for approval to the US FDA with the completion of a rolling BLA on May 18. The company is seeking approval in patients with vision loss due to confirmed bi-allelic RPE65-mediated inherited retinal disorder IRD.

To help payers in developing policies for covering the drug, the Institute for Clinical and Economic Review plans to develop a report assessing the comparative clinical effectiveness and value of voretigene neparvovec by January 2018, coinciding with a likely FDA decision on the treatment and preparations for a possible launch.

Schedule For ICER's Review Of Voretigene Neparvovec

Stakeholder open input period ends July 6

Draft scoping document posted: July 10

Public comment deadline on scoping document: July 31

Revised scoping document posted: Aug. 7

Draft evidence report posted: Nov. 14

Comment deadline on draft evidence report: Dec. 13

Evidence report posted: Jan. 11, 2018

Public expert panel meeting on topic: Jan. 25, 2018

To begin the process, ICER is accepting public comment during an "open input" period ending July 6 to "allow stakeholders to share key information relevant to the development of the evidence report," the group announced June 15. A draft evidence report is scheduled to be released in November 2017, followed by a final report in January 2018. ICER will seek public comment at several points in the process. (See box.)

Spark has not indicated how it will price the therapy but analysts have projected the cost could reach $1 mil. when both eyes are treated.

Expectations are based in part on the prices for gene therapies approved in Europe. uniQure NV's Glybera, a treatment for lipoprotein lipase deficiency, was approved for use in the European Union in 2012. It is priced at $1.4m and so far, has been paid for use in only one patient in Europe. 

GlaxoSmithKline PLC's Strimvelis for severe combined immune deficiency in children, was approved in Europe in 2016. Currently, patients can be treated only at a facility in Italy, due to the treatment’s extremely short shelf life. Its price in that country is approximately $664,000.

The prospect of gene therapies coming to the US has heightened concerns about their affordability under existing paradigms of pricing and payment, ICER notes in a March 2017 white paper on gene therapy. Payors have also been speaking up about their concerns. (See sidebar for related story.)

Gene Therapy Reimbursement: Is Blindness A Bad First Test?

By Laura Helbling29 Jun 2017

The first gene therapy approval could be coming soon – followed shortly by the first ever gene therapy coverage decision. An Express Scripts executive argues that the tone may be affected by the initial indication.

Read the full article here 

"Based on the initial pricing experience with gene therapy in Europe, should a growing number of gene therapies come into use at costs of $1-$2m, the cumulative budget impact would be substantial, and perhaps unsustainable," according to the paper, which was developed with input from policy leaders at a meeting convened by ICER in December 2016.

"Even if gene therapies are developed to treat only one in 10 patients with a genetic condition – approximately 1% of the total population – the cumulative budget impact at that price could rise to $3tn, as much as is currently spent in a year on all healthcare in the US."

The prospect of a one-time curative gene therapy regimen has driven expectations for extremely high upfront payments, ICER notes. "Like organ transplantation, gene therapy replaces a defective function, which may offer a curative or long-lasting benefit, but some payers and policymakers feel that this scenario does not create an a priori justification for per patient prices of $1m or more."

"If private insurers [are] going to consider some kind of payment through amortization, the proposal and the vehicle for doing so would have to come from the manufacturer."

The types of studies conducted for gene therapy will present challenges in assessing value based on existing methods, ICER acknowledges. For example, "short-term trials mean that we have significant uncertainty around estimates of clinical effect, which makes it difficult to produce robust estimates of health and economic impact."

Other issues include "what extra value, if any, should be attached to the potential that these therapies may cure severe and life-threatening disease – compared to the value attached for more incremental benefits."

Outcomes-Based Agreements, Amortized Payments

Promising approaches to paying for gene therapies include outcomes-based arrangements and various types of payment amortization, ICER says. Outcomes-based agreements "can serve a critical function in addressing the inherent uncertainty in longer-term outcomes of gene therapy by linking payment levels to the real-world outcomes achieved by patients."

Amortization, or breaking the price into smaller payments over time, "figures prominently in many discussions of payment strategies for gene therapies," the paper notes. Certain characteristics would make some gene therapies better candidates for amortization then others. They include:

One-time or very short-term treatment regimens with curative clinical impact, meaning that benefits accrue over time.

Durability of clinical benefit that is well-established or can be monitored through an outcomes-based mechanism.

A population size that is big enough to create concerns that upfront payment would not be easily managed.

A method by which the regimen price is fairly set to reflect the added value for patients and underlying development costs.

Sources for financed pricing might include the federal government or manufacturers, according to the paper. "The risk and high costs of gene therapies may prove very difficult to manage within the fragmented private insurance, and some stakeholders believe that the federal government will need to intervene and take over coverage, much as it did with renal dialysis," it says.

On the other hand, "it became clear through the discussion of the policy summit that if private insurers were going to consider some kind of payment through amortization, the proposal and the vehicle for doing so would have to come from the manufacturer," ICER reports.

Some manufacturers might have the size and financial resources to provide the financing themselves, and offer the payer some form of installment payment plan, the paper notes. Others "may need to work with third-parties to come up with some kind of financial instrument that they could then offer to payers."

Multi-Company, Multi-Product Clinical Trials On The Cards For Rare Pediatric Diseases→

Executive Summary

Industry is guardedly optimistic about a new joint proposal from US and EU regulators for companies to test their drugs for rare pediatric diseases together in single multi-product studies.

US AND EU REGULATORS WANT COMPANIES TO COLLABORATE ON DRUGS FOR RARE PEDIATRIC DISEASES

Developers of medicines for rare diseases in children should consider the possibility of testing their products in multi-company, multi-product studies, according to a joint proposal by regulators in the US and the EU. 

The proposal, published on July 3, seeks to facilitate the development of medicines for rare pediatric diseases, an area where there is typically only a small number of patients available to take part in trials.

Drug sponsors should also make better use of extrapolating available clinical data, the Food and Drug Administration and the European Medicines Agency say. They should extrapolate available data, including through appropriate modeling and simulation techniques, to predict how their product might work in children and adolescents based on studies conducted in adults or other pediatric populations.

The proposal, published as a “strategic collaborative approach” document, focuses on drug development for Gaucher disease, but its underlying principles can apply to other rare diseases in children, the agencies say. 

By testing the safety and efficacy of medicines developed by different companies in one single trial (so-called multi-arm, multi-company clinical trials), the same control arm would be used to compare more than one medicine under evaluation, the EMA explained. This would facilitate the clinical testing of drugs and reduce the total number of children included in trials.

Limitations Of Simultaneous Drug Development

The regulators recognize there are inherent limitations and challenges to conducting simultaneous drug development programs. Legal and regulatory issues concerning such things as governance and funding of a study (sponsorship), and eligibility for EU and US pediatric reward/incentives, would need to be dealt with on a case-by-case basis.

Developers who wish to use the new approach in their development plan are advised to seek scientific advice either from the EMA or the FDA separately, or request parallel scientific advice from the two regulatory authorities. The new document should not be interpreted as formal guidance, the agencies say.

“Specifics should be determined following discussions with the individual regulatory agencies if it is deemed appropriate and feasible by both the sponsors and the regulatory agency,” the regulators explain in a documentcomprising stakeholder comments on a draft version of the new approach.

“A multi-product, multi-company development programme raises certain regulatory/legal questions” – EFPIA

A range of other conditions would benefit from the new collaborative approach, according to one of the stakeholders’ comments. These include hepatitis C and Duchenne muscular dystrophy, the stakeholder said, adding that the approach “would be relevant for Fabry Disease and Pompe’s Disease where a number of new treatments are on the horizon.”

EFPIA Cautiously Optimistic

European pharmaceutical industry group EFPIA is cautiously optimistic about the new approach.

It told the Pink Sheet that while it welcomed the authorities' “openness to consider alternative clinical trial designs that address the specificities of small trial populations,” it had concerns. “A multi-product, multi-company development programme raises certain regulatory/legal questions,” it explained.

As well as the issue of governance and funding of a study, EFPIA said that questions are likely to include, but are not limited to, eligibility for and timing of pediatric reward/incentives, and the potential for a PIP (EU pediatric investigation plan) for a new product to be submitted during the course of such a program.

“Together with individual product characteristics (including route of administration), these must be taken into account in determining on a case-by-case basis whether a multi-arm, multi-company trial may be the optimal approach for a new compound,” it said.

Another important question EFPIA says needs to be considered is: when adopting a multi-product, multi-company study, would the PIP applicant be expected to develop additional clinical studies in pediatric patients depending on the specific medicinal product/mechanism of action, or would the EMA’s Paediatric Committee not require/waive additional studies?

“A multi-product, multi-company development programme may indeed take away some of the constraints around multiple studies competing for the same pool of eligible paediatric patients,” EFPIA commented. “Nevertheless, such a programme per se does not address most areas of unmet medical need.”

While questions remain, the trade group said it “welcomes the fact that platform, basket and other types of new, more collaborative trial types and designs continue to be investigated for all ranges of disease.” These will be considered in new, large-scale pilots within the framework of the EU’s public-private partnership, the Innovative Medicines Initiative, with the support of global heads of R&D, EFPIA said.

“This is also in line with the recently revised ICH [International Council for Harmonisation] E11 guideline which, in its addendum, promotes the use of innovative study design, which can be supported by regulators provided justified, appropriately conducted, and agreed beforehand with those regulators.”

Strategic Collaboration On Gaucher disease

As for the newly published strategic collaborative approach, the EMA and FDA discuss possible ways to enhance the efficiency of medicine development in Gaucher disease, a rare lysosomal storage disorder.

Gaucher disease is being used as a disease model, the document notes, clarifying that the principles in the document may be extended to other areas of drug development in rare diseases. In addition, different approaches may be proposed and the applicant should justify the specific choice of each new strategy, the document states.

“Due to differences in the regulatory requirements of both Europe and the United States, particularly regarding extrapolation of efficacy from adults to children, additional trials may be required to support an application for approval,” it adds.

The document deals with general considerations for study population, and practicalities in the design and execution of pediatric trials of drugs for Gaucher disease, and covers the use of extrapolation of efficacy data for the disease.

It also proposes a multi-arm, multi-company trial for non-neurological manifestations of Gaucher disease. This proposal covers issues such as study design features; study population and subset definition; number of study participants by pediatric subset (e.g., age, sex, severity or stage); main inclusion criteria; main exclusion criteria; study duration for participants; dosage, treatment regimen, and route of administration; controls; endpoints with times of assessment; statistical plan (SAP) including study conduct and analysis; measures to minimize pain and distress; and external independent data safety monitoring boards.