Quantifying the Insurance and Altruism Value for Rare Diseases: A Case Study for Duchenne Muscular Dystrophy

OBJECTIVES:

Insurance value (value individuals receive from reduction in future health risks) and altruism value (value individuals receive when others benefit from new treatments) are components of the ISPOR value flower. This study estimates the insurance and altruism value for a hypothetical treatment for a rare, severe, pediatric disease: Duchenne muscular dystrophy (DMD).

METHODS:

A survey was administered to US adults (aged ≥21 years) to elicit willingness-to-pay (WTP) for insurance coverage of a hypothetical DMD treatment that improved mortality and morbidity relative to current standard of care (chronic corticosteroids). Respondents were drawn from two cohorts: (1) adults planning to have additional children in the future (insurance value cohort), and (2) adults not planning to have additional children (altruism value cohort). A multiple random staircase design was used to elicit respondent WTP for coverage of the treatment. Insurance value was calculated as the share of the stated WTP preference above the expected ex-ante value under a risk-neutral quality-adjusted life year (QALY) framework.

RESULTS:

The survey included 180 insurance value and 203 altruism value respondents. WTP in increased premiums for insurance coverage of the hypothetical treatment was $1,004/year compared to an ex-ante, risk-neutral approach which estimated a WTP of $45.30/year. This implies that 95.5% ($959) of people’s WTP for a new DMD treatment was due to insurance value. The altruism cohort had a WTP of $811/year (altruism value) in increased taxes to have the government cover a novel DMD treatment for others.

CONCLUSIONS:

Over 95% of the value of a novel hypothetical DMD treatment comes from insurance value; altruism value was also high. Individuals are willing to pay relatively high values for insurance coverage of treatments for this severe, pediatric disease, both to protect their future children against this risk and for altruistic reasons.