Rare disease drugs that treat small patient populations are costly to develop and come with high price tags, but a new study aims to quantify the economic value they bring to society.
Chiesi Global Rare Diseases and IQVIA set out to analyze the cost burden of 24 rare diseases – with and without available treatment – and compared it to so-called mass-market diseases like diabetes and arthritis and cancer.
They found that the economic burden from rare diseases—which are often genetic, heavily debilitating and usually diagnosed in babies and children —was 10 times higher than mass-market diseases on a per patient per year basis.
More importantly, said study author Giacomo Chiesi, head of Chiesi Farmaceutici’s rare disease arm, annual costs were 21.2% lower for rare diseases when there was an available treatment.
The study comes as drug companies have come under public scrutiny in recent years for the high cost of rare disease drugs, which are among the most expensive on the market.
“We think that this work illustrates quantitatively that there’s a positive economic return for rare disease therapies, even if they are expensive,” Chiesi said. “Remember that 95% of rare diseases don’t have a treatment so there is so much more to be done. There’s so much more value that can be added.”
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The 24 rare diseases included in the analysis spanned five therapeutic areas including metabolic, hematologic, immunological, congenital and neurological disorders. It found the average overall cost per patient was a staggering $266,000 annually, compared to just $26,000 for mass market diseases.
The bulk of the economic burden came from direct costs like hospitalization for transplants and other procedures, nurse visits and home health care which averaged $63,000 per patient per year with treatment, including the cost of prescriptions. That compared to $118,000 without treatment.
Indirect costs, such as missed work and lost productivity for patients and caregivers and travel for medical visits, rose from $40,000 on average to $73,000 without treatment.
Mortality costs rose from $36,000 to $49,000, based on the lower life expectancy for people with rare diseases. The analysis used U.S. Department of Transportation value of statistical life of $10.3 million for a 79-year average lifespan, or $130,000 per year.
When extrapolating the analysis to all rare diseases, the study estimates the total cost burden for rare diseases in the U.S. could be as high as $8.6 trillion per year.
One key finding, according to Chiesi, was that when patients had access to treatment, the burden of indirect and mortality costs shifted to the direct cost category, meaning costs are shifted from the patient to private and public payers.
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Chiesi plans to share the findings with policymakers in hopes of encouraging more government investments in rare disease drug R&D, including restoring the orphan drug tax credit to 50% and encouraging support for newborn screenings and diagnosis for rare diseases.
The report comes on the heels of the company’s #wewearstripes awareness campaign on Feb. 28 which encouraged people to apply a zebra filter (zebras are the mascot for rare diseases) to personal photos and share it on social media.
The company, which pledged to donate 1 euro to Make-A-Wish International for each photo posted, has received “tens of thousands of pictures” and counting, Chiesi said.
Italy-based Chiesi set up a rare disease unit in Boston in 2020 and has a portfolio of rare disease treatments focusing on lysosomal storage disorders, hematology and ophthalmology.