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Why the underestimated economic burden of rare diseases could be costing the U.S. trillions of dollars

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Rare diseases have gained more attention in recent years, perhaps in part due to the high price tags often associated with approved therapies. But the cost of rare disease drugs is dwarfed by the cost of not having them.

Our recent study shows that a lack of treatment for a rare disease is associated with a 21.2% increase in total costs per patient per year. That places a significant burden on the healthcare system. While rare diseases impact a small population, the cost to society is staggering–we estimate that the societal cost in the U.S. for all 7,000 known rare diseases may be in the range of $7.2-$8.6 trillion per year.

Historically, there has been a lack of shared responsibility for alleviating the burden of rare diseases by different stakeholders, including industry, government bodies, policymakers, and society. But a societal approach is essential to address this growing public health crisis and will need to include improved healthcare policies. The good news is that the substantial economic burden that rare diseases impose can be reduced by treatment availability, and pharma and biotech companies are increasingly focusing on rare disease populations. Policymakers may be interested to know that based on the study, productivity-related economic losses dropped from about $61,000 for both patients and caregivers when no treatment was available to about $22,000 for patients and $5,000 for caregivers with treatment.

These and future economic data can help justify increased government investment to ensure broader patient access to safe and effective therapies and policy proposals that reflect the unique challenges in the rare disease community. And it seems that government leaders are listening. Existing U.S. policy incentivizes rare disease R&D, and new bills introduced to Congress will help further drive rare disease drug development by, for example, restoring the Orphan Drug Tax Credit from 25% to its original 50% and extending exclusivity for rare disease clinical trials stalled during the pandemic. In addition, the bipartisan bicameral BENEFIT Act would allow patients and advocates to play a larger role in the FDA’s benefit-risk framework for drug approvals.

Regulators are hearing the calls to action as well. According to remarks from Peter Marks, director of the FDA’s Center for Biologics Evaluation and Research (CBER), the agency is preparing a pilot program to encourage the development of new drugs for rare diseases, similar to what “Operation Warp Speed” was for COVID-19 vaccines.

Meanwhile, the Center for Drug Evaluation and Research (CDER) reports advances in its Accelerating Rare disease Cures (ARC) program, which was launched to speed and increase the development of effective and safe treatment options addressing the unmet needs of people with rare diseases. As part of the ARC program, there is also the initiative Learning and Education to Advance and Empower Rare Disease Drug Developers (LEADER 3D) to help identify and address knowledge gaps when it comes to rare diseases and better understand the challenges rare disease drug developers face.

Both CDER and CBER are involved in the Rare Disease Endpoint Advancement (RDEA) Pilot Program, another initiative offering drug developers increased support in developing efficacious endpoints for clinical trials in rare diseases. And recently the FDA and NIH announced the launch of the Critical Path for Rare Neurodegenerative Diseases (CP-RND)–a public-private partnership aimed at advancing the understanding of neurodegenerative diseases and fostering the development of treatments for amyotrophic lateral sclerosis (ALS) and other rare neurodegenerative diseases. 

These are important strides but there is still a long way to go. Proposals limiting reimbursement for rare disease therapies granted accelerated approval pose a continuing threat to fostering and sustaining innovation, despite the positive economic return of these therapies.

Congress should increase funding for the FDA’s Orphan Disease Grant Program, increase NIH rare disease research and funding, position rare disease clinicians and researchers to review rare disease applications and advise regulatory agencies, permanently reauthorize the Rare Pediatric Disease Priority Review Voucher Program, and fully engage with the rare disease patient community to better understand their unique experiences.

Funds for rare diseases should also be allocated on par with mass health conditions–including diabetes, cardiovascular disease, Alzheimer’s disease, different types of cancer, and arthritis–to reduce the associated significant societal burden. Social infrastructure must be adapted to increase caregiver resources and relieve families affected by rare diseases, as they bear especially high indirect or non-reimbursed expenses.

It is critical that pharma and biotech companies bring important new therapies to market and concurrently collaborate with government bodies, advocacy groups, regulators, and other stakeholders to ensure policies increase, not decrease, patients’ access to new and promising therapies.

There are clear positive returns from rare disease therapies to society, justifying an increase in government investment in rare diseases, not only for R&D but for diagnosis, including screening. The sooner patients are diagnosed and put on available treatment, the more society will benefit.

Giacomo Chiesi is the head of global rare diseases at the Chiesi Group, where he leads the team developing and commercializing treatments for rare and ultra-rare diseases.

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.

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