MassBio Panel Tackles Why Rare Disease Treatments Cost So Much

March 25, 2013

One panel at the MassBio’s annual meeting on Thursday billed under the title, “Rare Disease Therapies: Is The Current Payer Model Sustainable?” probably could have more simply been called, “Why drugs for rare diseases cost so much.”

The panel was moderated by Bruce Booth, a partner at Atlas Ventures, and was one of more than a dozen forums, seminars and keynote speeches over the course of the two-day annual meeting. Booth said that ever since the passage of the Orphan Drug Act – which turned 30 years old this year – about 350 orphan drugs have gone on the market. Through the U.S. Food and Drug Administration, the act provided incentives – such as smaller clinical trials – for companies to develop drugs for diseases that occurs in less than 200,000 people in the U.S., and Booth said that it has become “one of the hottest targets for investment in early-stage companies.”

However, he said, one of the realities of the of the market is that the rarer the disease, the higher the cost to treat it. As a result of what he termed the “inverse prevalence theory” of pricing drugs, therapies for the very rarest of rare diseases can cost as much as $500,000 a year, he said. The question he posed to the panel as well as the audience was whether the market can support such a pricing model.

“I’m sure 10 years ago, people were saying the same thing: that we’re near a tipping point; these drugs are too expensive,” he said. “That hasn’t happened.”

The answer to the question of whether the pricing model is sustainable (from executives from Genzyme, Shire and Alexion) was, basically, yes.

Read more at Boston Business Journal.  Written by Don Seiffert.

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