Master's Degree Dissertation Appraisal of NICE’s cost-effectiveness thresholds for assessing orphan drugs Author: Ruodan Nan Master's Degree in Health Economics and Pharmacoeconomics UPF Barcelona School of Management Academic Year 2018 – 2021 Mentor: Laura Vallejo 1 Project performed within the framework of the Health Economics and Pharmacoeconomics program taught by Barcelona School of Management, a centre associated with Pompeu Fabra University 2 Abstract A rare disease is one that affects less than 1 in 2,000 in general population, and they are often chronic and life-threatening [1]. Due to the high cost to develop and small market for orphan drugs, historically manufacturers are reluctantly to explore the rare disease therapeutic areas. There is highly unmet need from patients with rare diseases. As the pharmaceutical expenditure rises, governments around the world are increasingly under pressure to contain the costs on drug reimbursement. Meanwhile patients with rare diseases need to be ensured for access to orphan drugs, and the industry needs to be incentivized to innovate. Health technology assessment and reimbursement bodies set out measures and policies for orphan drugs to be given market access. In this literature review, the landscape of health technology appraisals for orphan drugs in England UK is studied. The process for an orphan drug to gain marketing authorisation in the European Union (EU), the methods and criteria that used by National Institute for Health and Care Excellence (NICE) are reviewed. All orphan drugs with marketing authorisations from European Medicine Agency (EMA) are searched from the agency’s online database, whereas each of the authorised orphan drug is searched in NICE’s database for any technology appraisals and recommendations made for the orphan drug. The search results are then analysed to find factors that may influence NICE’s decisions on whether the drug should be considered cost-effective. Based on the analyses, suggestions are made for NICE to potentially improve its way of assessing orphan drugs. Keywords: cost-effective; NICE; rare diseases; orphan drugs This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License 3 Table of contents 1. INTRODUCTION…………………………………………………………………………………………..5 1.1 Rare diseases and orphan drugs………………………………………………………5 1.2 Marketing authorisation of orphan drug in the EU………………………….5 1.3 Marketing authorisation routes for orphan drugs in England………….6 1.4 TA by NICE………………………………………………………………………………………7 1.5 HST by NICE…………………………………………………………………………………….8 1.6 Types of recommendations…………………………………………………………….9 1.7 Commercial arrangements……………………………………………………………..9 2. AIMS & SUBJECTIVES………………………………………………………………………………….10 3. DATA SOURCE & METHODOLOGY……………………………………………………………….11 4. RESULTS……………………………………………………………………………………………………..12 4.1 Orphan drugs granted a EU marketing authorisation………………………12 4.2 Assessment of orphan drugs by NICE………………………………………………13 4.3 Comparison of assessment results between cancer and non-cancer orphan drugs………………………………………………………………………………………………….16 4.4 Comparison of assessment results made through TA and HST routes…………………………………………………………………………………………………………….17 4.5 Characterisation of prevalence of indicated orphan diseases………….20 4.6 Characterisation of ICER values reached by the appraisals via TA and HST routes……………………………………………………………………………………………………..23 5. DISCUSSION……………………………………………………………………………………………….26 5.1 Uncertainty surrounding the evidence affects the appraisal results.26 5.2 ICER thresholds in TA are inappropriate for assessing orphan drugs……………………………………………………………………………………………………………..27 5.3 ICER threshold should be adjusted based on the prevalence………….28 References…………………………………………………………………………………………………….29 Appendix A. List of orphan medicinal products with European marketing authorisation…………………………………………………………………………………………………32 Appendix B. List of orphan drugs appraised by NICE………………………………………60 4 1.INTRODUCTION 1.1 Rare diseases and orphan drugs A rare disease, defined by the European Union, is one that affects less than 1 in 2,000 individuals in the general population [1]. 80 % of rare diseases are genetic, and they are often chronic and life- threatening. There are about 6,000 to 8,000 identified rare diseases so far, which include some forms of cancers, auto-immune diseases, metabolic conditions and inherited malformations. Between 250 to 280 new rare diseases are discovered annually [2]. A large amount of people are affected by rare diseases. About 1 in 17 people will be affected by a rare disease at some point in their lives. [3]. Overall, 263 million to 446 million people worldwide are affected by one of these rare diseases. In the EU, an estimate of 30 million people are or will be affected. In the UK, approximately 3.5 million people are affected by rare diseases [4]. An orphan drug is a pharmaceutical product treating rare diseases. Due to the high costs in R&D for drug development, and small market for orphan drugs due to the low prevalence, their incremental cost-effectiveness ratio tend to be much higher than drugs targeting common diseases. Developing an orphan drug might therefore not allow the recovery of the capital invested for its research. As a result, drug developers are reluctant to develop orphan drugs under normal market conditions. 1.2 Marketing authorisation of orphan drug in the EU In order to promote the development of orphan drugs, the European regulation on orphan medicinal products (Regulation (EC) No 141/2000) was adopted in December 1999 [5]. Orphan drug developers can apply for orphan designations from European Medicine Agency (EMA) which guarantee a range of incentives, including scientific advice at reduced price with no restriction on number of times of requesting, access to centralised authorisation procedure which allows companies to make a single application to EMA resulting in a single opinion and a single decision valid in all European Union (EU) Member States, 10 years of market exclusivity after the marketing authorisation when similar medicines for the same indication cannot be placed on the market, additional incentives for micro, small and medium-sized enterprises such as administrative and procedure assistance, reduced 5 fees for regulatory activities, and research grants from European Commission [6]. There are criteria to be fulfilled to qualify and maintain the orphan designation. Such criteria include that the disease must be life-threatening or chronically debilitating, the prevalence must be no more than 1 in 2,000 or the marketing of the drug is unlikely to be profitable enough to cover the investment, and there must be no available treatment or the drug must be of significant benefit over the already existing treatments. The orphan designation is granted on preliminary data and is re-evaluated at the time of market authorisation [7]. After orphan designation is granted, an annual report summarising the developing status must be submitted. Sponsors of some orphan drugs can? also apply for paediatric investigation plan (PIP) which offers a two-year marketing exclusivity extension to the ten-year marketing exclusivity [8]. In order to apply for marketing authorisation, sponsors need to submit a similarity report addressing the similarity between new medicinal products and the orphan drugs that are under market exclusivity protection. If there is no similarity, or if similar, one of the derogations provided for in the Orphan Regulation (EC) No 141/1200 applies, then the Committee for Medicinal Products for Human Use (CHMP) will conclude that the marketing authorisation application is not similar to any authorised orphan medicinal products. Otherwise, the application for market authorisation will be declined. The sponsors should also submit a report on maintenance of the orphan designation. The Committee for Orphan Medicinal Products (COMP) will review the report and adopt a decision following CHMP positive opinion on the market authorisation application. EMA sends the decision from COMP to the European Commission [9]. The sponsors can request an accelerated assessment which will be granted if CHMP decides that the product is of major interest for public health and therapeutic innovation [10]. Additional monitoring is needed for medicinal products of which the data is limited on its long-term use [11]. Conditional marketing authorisations could be granted to medicinal products where the benefit of immediate availability outweighs the risk of less comprehensive data than normally required, while it is likely to obtain comprehensive data within a certain timeframe, to address unmet needs of patients. The sponsor may apply for a marketing authorisation under exceptional circumstances when comprehensive data cannot be provided even after authorisation on the efficacy and safety under normal conditions of use [12]. 1.3 Marketing authorisation routes for orphan drugs in England The National Health Service (NHS) England plays a key role in determining the availability of a treatment, and has commissioning responsibility for majority of orphan drugs in England. There are five major ways for market access for orphan drugs in England. The effectiveness and cost- 6 effectiveness of orphan drugs are provided by the National Institute for Health and Care Excellence (NICE). The first two routes are being made available in England through NICE Health Technology Assessment (HTA) programme, including firstly the single technology appraisal (TA) and secondly