Recent research from Charles River Associates (CRA) has uncovered significant insights into how disease prevalence directly influences pricing strategies for rare disease treatments across major pharmaceutical markets. The analysis reveals that healthcare systems are willing to pay premium prices for treatments targeting smaller patient populations, but this pricing dynamic is becoming increasingly complex as more orphan drugs enter the market.
The Prevalence-Price Relationship
The research examined 15 rare and ultra-rare disease therapies recently approved in Japan, France, Germany, Italy, Spain, and the UK. The analysis revealed a positive correlation between treatment rarity and list price—payers demonstrated greater willingness to pay for products expected to treat fewer patients. However, this premium pricing did not extend to differences in rarity among ultra-rare conditions.
"Manufacturers should ensure that patient populations are well defined and that the patient journey is well understood to help reduce any uncertainty payers might have," noted the CRA research team.
For classification purposes, diseases with a prevalence of fewer than one in 50,000 people were categorized as ultra-rare, while those with a prevalence of fewer than five in 10,000 people were considered rare. The study used EMA prevalence rates as the foundation for calculations, with adjustments made when these rates differed substantially from literature.
Case Studies in Ultra-Rare Disease Pricing
Three ultra-rare disease treatments—Kanuma, Strensiq, and Brineura—provided valuable insights into pricing dynamics.
Kanuma, indicated for lysosomal acid lipase deficiency (LAL-D), which affects approximately one in 90,000 people worldwide, secured pricing of approximately €5,900, €6,500, and €8,900 per pack in Germany, Italy, and Spain, respectively. The price variations likely stemmed from confidential net price discounts in Italy and Spain, as well as differing prevalence calculations across markets.
Similarly, Strensiq, for childhood-onset hypophosphatasia, demonstrated how prevalence estimates significantly impact pricing negotiations. Prevalence estimates varied considerably by location and calculation method, with milder forms reaching as high as one in 6,300 in European populations. Despite the EMA label not excluding treatment of milder forms, most payers focused on severe forms when making pricing decisions.
Brineura, for children with Batten disease (CLN2), highlighted the importance of distinguishing between disease prevalence and incidence. While CLN2 is ultra-rare based on prevalence (about one in two million), its incidence (about one in 200,000) suggests a higher number of treatable patients—a factor French payers considered when determining eligible patient populations.
Multiple Therapies for the Same Rare Disease
When multiple therapies target the same rare disease, pricing alignment becomes more straightforward. Kalydeco and Orkambi, both precision medicines for cystic fibrosis, illustrate this dynamic. Kalydeco was initially approved for a single mutation in the G551D gene before expanding to additional mutations. Orkambi, approved later for the more common F508del mutation, would treat more patients, resulting in a lower average annual treatment cost (AATC).
Similarly, pulmonary arterial hypertension (PAH) treatments Opsumit, Adempas, and Uptravi achieved comparable AATCs due to similar launch dates and disease prevalence estimates, despite some indication differences.
The French Pricing System for Orphan Drugs
A deeper analysis of the French market revealed unique challenges for orphan drug pricing. France operates a dual system where health technology assessments are conducted separately from pricing negotiations. The Transparency Commission (CT) provides guidance through a comparative clinical benefit rating (ASMR) and target patient population estimates.
For rare diseases, this system faces limitations as establishing comparative clinical benefit depends on comparator drugs, which are often unavailable. Additionally, sizing target patient populations becomes increasingly difficult as prevalence decreases and local epidemiology data becomes less robust.
The study analyzed 22 non-oncology orphan drugs approved between July 2012 and the end of 2019, focusing on chronic, non-curative treatments. The findings confirmed a correlation between reimbursed annual treatment cost and eligible patient numbers in France, with costs decreasing as eligible patient numbers increase.
Beyond Patient Numbers: Additional Pricing Factors
While patient numbers significantly influence pricing, other factors play crucial roles in negotiations:
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ASMR ratings - Drugs with the highest ASMRs (Kalydeco, Strensiq: ASMR 2; Kanuma: ASMR 3) commanded some of the highest annual treatment costs, suggesting a relationship between clinical benefit ratings and pricing.
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Early access programs - Most reimbursed drugs reviewed (15/17) were previously available through France's early access program (ATUc), though inclusion of ATUc data in clinical assessments did not consistently lead to more favorable ASMRs or higher treatment costs.
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Clinical data robustness - Despite high unmet needs in rare diseases, the number of unfavorable ASMR ratings demonstrates the challenges manufacturers face in providing robust clinical data and the importance of available clinical comparators.
Changing Payer Attitudes
Historically, payers have accepted higher prices for rare disease treatments due to significant unmet medical needs and limited budget impact. However, as more orphan drugs enter the market, their financial impact is expanding, prompting payers to take a tougher stance on pricing.
"Disease rarity may be a key driver of price, but payers now often have a prevalence threshold above which they are not as willing to pay for a potential treatment, which may also impact innovative cell and gene therapies in late-stage clinical development," the researchers noted.
Strategic Implications for Manufacturers
For drug manufacturers seeking to differentiate on price, several strategies emerge from the research:
- Generate strong efficacy and safety data to strengthen negotiating positions
- Focus on indications with the highest clinical benefit and unmet need
- Ensure patient populations are well-defined with clear diagnostic and treatment pathways
- Collaborate with clinicians, patients, and advocates who can provide valuable perspectives during pricing negotiations
As healthcare systems continue to balance innovation access with budget constraints, understanding the complex relationship between disease prevalence, clinical value, and pricing will remain essential for successful market access strategies in the rare disease space.
