IS The euRopeAn oRphAn deSIgnATIon A pRICe dRIveR foR dRugS IndICATed In RARe dISeASeS? evIdenCe fRom A fRenCh hoSpITAl mARkeT

Abstract

With the growing pressure on healthcare budgets, the specific considerations toward orphan drugs are under scrutiny. The significant turnover carried out by some of these drugs has aroused suspicions about potential windfall effects for pharmaceutical companies. This study aims to provide insights into the drivers of orphan drug pricing, by assessing in particular whether granting a European Orphan Designation (OD) may have an impact on prices. The study was conducted in 2011 in the largest University Medical Center in France. We compared the daily treatment cost (DTC) of 44 OD drugs with the DTC of 24 non-OD drugs used in rare indications. Then, we retrieved the 54 drugs for which information related to additional variables was not missing (added clinical benefit, active substance source, prevalence) and included them into a multivariate linear regression. No statistically significant difference in the log distribution of the DTC is found between OD drugs and non-OD drugs. In the regression model, having a biological source is the only variable that leads to a higher DTC. From these results, granting an OD does not provide a premium. High prices seem to be more linked with a biological active substance for which the important R&D and production costs will affect a limited target population.