The Price and Value of Orphan Drugs

How do you put a price tag on a drug that offers life-altering results – but for a small group of patients? The question is becoming increasingly relevant with the rise of innovative, targeted medicine. And it’s at the heart of current debate about how the Institute for Clinical and Economic Review’s value framework applies to orphan drugs.

ICER, as it’s called, is a drug price analysis group. Using its trademark value framework, it assigns drugs a value benchmark price based upon long-term cost effectiveness and short-term budget impact. Recent ICER reports have generated price points for drugs that treat rheumatoid arthritischronic pain and other conditions.

This summer ICER released a proposal on how it might alter its framework when evaluating drugs for “ultra-rare” conditions. ICER defines the term as a disease impacting fewer than 10,000 people. Small populations make generating comprehensive clinical trials data difficult, ICER concedes. That requires the organization to tweak how it approaches these therapies.

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