OBJECTIVES : The high costs of orphan drugs, along with their rising numbers, have raised concerns among health plans regarding their affordability. We examine whether US commercial health plans are more likely to restrict coverage of orphan drugs with larger budget impacts.

METHODS : We identified orphan drug coverage decisions from the Tufts Medical Center Specialty Drug and Evidence Coverage (SPEC) database, which includes information on specialty drug coverage decisions issued by 17 of the largest 20 US commercial health plans. We used multivariate logistic regression to assess the association between a drug’s budget impact and coverage restrictiveness. We considered restrictive coverage decisions to include at least one of the following; (i) patient subgroup restriction, (ii) step therapy protocol, (iii) prescriber restriction (a certain type of physician, e.g., a rheumatologist, must prescribe the drug), or (iv) other restriction (any other condition on coverage that reduces the eligible patient population size). We estimated a drug’s budget impact by multiplying a drug’s annual cost and the US prevalence of the indicated disease. We controlled for other relevant factors by including the following variables: cancer treatment; availability of alternative therapies; pediatric indication; number of years since FDA approval; self-administered; and an additional indication for a non-orphan indication.

RESULTS : We included 2,168 orphan drug coverage decisions (current as of March 2018). We found that the odds of restricted coverage were 1.5 times larger for orphan drugs with the largest budget impacts compared to the smallest budget impacts (OR: 1.512, CI 1.119-2.042). We found the following controlling variables were also associated with an increased likelihood of restrictive coverage (p<0.05): non-cancer treatment; availability of alternative therapies; number of years since FDA approval; self-administered.

CONCLUSIONS : We found that, when controlling for other factors, health plans are more likely to restrict coverage of orphan drugs with larger budget impacts.