Correlation Between Ultra-Orphan Drug Costs Cost-Effectiveness Metrics and Disease Prevalence
Author(s)
Agnes Adler, PhD1, Johannes Leidner, PhD2, Karin Steinbach, PhD3, Sean Robbins, managing director4.
1Lattice Point Consulting, Geneva, Switzerland, 2LatticePoint Consulting, Geneva, Switzerland, 3Latticepoint Consulting, Genève, Switzerland, 4LatticePoint, Geneva, Switzerland.
1Lattice Point Consulting, Geneva, Switzerland, 2LatticePoint Consulting, Geneva, Switzerland, 3Latticepoint Consulting, Genève, Switzerland, 4LatticePoint, Geneva, Switzerland.
OBJECTIVES: Ultra-orphan drug prices usually exceed conventional ICER (Incremental Cost-Effectiveness Ratio) thresholds. While prior studies have identified correlations between therapy costs and rare disease epidemiology, limited research has focused specifically on ultra-rare severe diseases. In particular, the relationships between ICER, incremental QALYs (Quality-Adjusted Life Years), treatment costs, and disease prevalence remain insufficiently explored.
METHODS: This analysis included ultra-orphan drugs approved by the MHRA (Medicines and Healthcare products Regulatory Agency) and/or the FDA (Food and Drug Administration). Correlation analyses were performed to assess the relationships between cost-effectiveness metrics—ICER, incremental costs, and incremental QALYs—and disease rarity. Additional analyses examined the associations between annual therapy costs and disease prevalence.
RESULTS: Lower disease prevalence was generally associated with higher acceptable ICER thresholds and increased treatment costs. A positive correlation was observed between incremental costs and incremental QALYs, suggesting that higher expenditures are more acceptable when accompanied by greater clinical benefit. These findings reflect a higher willingness to pay for clinical benefit in the context of ultra-rare diseases and highlight the dual influence of disease rarity and therapeutic value in pricing and reimbursement decisions.
CONCLUSIONS: Pricing of ultra-orphan drugs is driven by both the rarity of the disease and the magnitude of expected clinical benefit. Lower prevalence supports higher pricing, while greater QALY gains can justify elevated ICER thresholds. Understanding these dynamics is crucial for informed reimbursement decisions and for developing sustainable, value-based pricing strategies in the context of ultra-rare diseases.
METHODS: This analysis included ultra-orphan drugs approved by the MHRA (Medicines and Healthcare products Regulatory Agency) and/or the FDA (Food and Drug Administration). Correlation analyses were performed to assess the relationships between cost-effectiveness metrics—ICER, incremental costs, and incremental QALYs—and disease rarity. Additional analyses examined the associations between annual therapy costs and disease prevalence.
RESULTS: Lower disease prevalence was generally associated with higher acceptable ICER thresholds and increased treatment costs. A positive correlation was observed between incremental costs and incremental QALYs, suggesting that higher expenditures are more acceptable when accompanied by greater clinical benefit. These findings reflect a higher willingness to pay for clinical benefit in the context of ultra-rare diseases and highlight the dual influence of disease rarity and therapeutic value in pricing and reimbursement decisions.
CONCLUSIONS: Pricing of ultra-orphan drugs is driven by both the rarity of the disease and the magnitude of expected clinical benefit. Lower prevalence supports higher pricing, while greater QALY gains can justify elevated ICER thresholds. Understanding these dynamics is crucial for informed reimbursement decisions and for developing sustainable, value-based pricing strategies in the context of ultra-rare diseases.
Conference/Value in Health Info
2025-11, ISPOR Europe 2025, Glasgow, Scotland
Value in Health, Volume 28, Issue S2
Code
EE154
Topic
Economic Evaluation, Health Technology Assessment, Methodological & Statistical Research
Disease
Pediatrics, Rare & Orphan Diseases