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How does prevalence affect pricing of rare disease drugs?

December 10, 2019

New research from CRA looks at the relationship between rarity of a disease and the price countries are willing to pay for drugs to treat them. High clinical development costs and small target patient populations have often been presented as justifications for high prices of drugs to treat rare diseases. Historically, payers have accepted these factors for reasons including the fact that treatment of rare diseases represents a significant area of unmet need in healthcare and many regulatory agencies have encouraged investment in research in orphan drug development. In addition, the fact that very few patients would use a product typically means that the cost burden on healthcare systems can be relatively limited. But with many more rare disease drugs entering the market, their financial impact is expanding and payers are increasingly taking a tougher stance on drug pricing, scrutinising clinical data, negotiating rebates and setting budget impact thresholds