What is a rare disease? The definition varies across countries, but according to the European Medicines Agency (EMA) rare diseases are those with a prevalence of <5 cases per 10,000 people; ultra-rare diseases are those with <1 case per 50,000 people. In most cases, rare disease must not only be rare but also severe, often life-threatening or chronically debilitating.

Last year, the Office of Health Economics (OHE) in the UK released a report which–as the title indicates–dives into some of the “Ethical and Economic Issues in the Appraisal of Medicines for Ultra-Rare Conditions“. Some highlights from the report include:

  • Rare diseases require high prices for manufacturers to get sufficient return on investment. Because the diseases are rare and clinical trials are (relatively) fixed, higher prices are needed to incentivize the development of treatments for rare diseases. For countries with health technology assessment (HTA) bodies, this typically results in higher cost-effectiveness threshold (CET) in rare/ultra-rare conditions.
  • Ethical justifications. Paying a premium for health outcomes in ultra-rare conditions can be justified by egalitarian principles that would seek to reduce inequities and inequalities in access to new medicines and in health outcomes between persons with ultra-rare conditions and those with more common conditions.
  • Highly Specialized Technologies (HSTs). NICE’s Highly Specialised Technologies (HST) appraisal process tacitly acknowledges these challenges and justifications. OHE believes that some of their rules for HST eligibility are vague and inconsistently applied. I provide some comments on these criteria below.
  • CET threshold for HST. Treatments that do not meet the HST eligibility criteria fall under NICE’s standard Single Technology Appraisal (STA) approach, in which the typical CET is £20,000-£30,000 per QALY. In HST, the CET is set at between £100,000- £300,000 per QALY.
  • HST limits manufacturers to a single indication. Medicines that are licensed for more than one indication are excluded from the HST process if its use is not solely within the context of a specialised service. While this provisions limits manufacturer ability to use the HST process to set higher prices for non-rare indications, it also de-incentivizes R&D funding for label expansions research into new, rare indications.

The above focuses only on the point of view of payer and HTA evaluation of a technology for rare diseases. But regulators and payers often have different objectives In fact, the competing demands from regulators and payers can often be particularly problematic for manufacturers in the area of rare diseases. Consider the following example from Drummond et al. (2009):

In the clinical trial of sorafenib in advanced renal cell carcinoma compared to best supportive care, an interim analysis of progression-free survival showed that sorafenib reduced the risk of progression by 56%. Following this result, the US food and Drug Administration (FDA) requested that all trial participants be unblinded and offered treatment with sorafenib. The data collected to that point were used to estimate the difference in overall survival and a corresponding cost per QALY for submission to the Canadian Agency for Drugs and Technologies in Health (CADTH), but CADTH judged that due to the early termination of the trial, survival estimates and consequently the cost-effectiveness estimate was too uncertain. A re-estimation of the cost per QALY by CADTH doubled the original cost-effectiveness estimate and as a result, sorafenib was not listed…the manufacturer was caught in an “ethical no man’s land”: as the trial was cut short there was insufficient evidence to prove cost-effectiveness of the drug, but to continue the trial would have been unethical.

For a treatment to be considered as a Highly Specialised Technology (HST), NICE requires a treatment to meet the following criteria:

  • Rare. The target patient group for the technology in its licensed indication is so small that treatment will usually be concentrated in very few centres in the National Health Service. ▪
  • Distinct. The target patient group is distinct for clinical reasons.
  • Severe. The condition needs to be chronic and severely disabling.
  • Narrow indication. The technology is expected to be used exclusively in the context of a highly specialised service. In other words, companies can’t use an HST indication as a leverage to price in the STA pathway; conversely, manufacturers have limited incentive to look for rare disease extensions of existing technologies.
  • High cost. The technology is likely to have a very high acquisition cost. If it was very inexpensive, it would be approved.
  • Chronic treatment. NICE requires that technology has the potential for lifelong use. This is a problematic consideration for gene therapies for rare disease.
  • Need. The need for national commissioning of the technology is significant.


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