Journal Article

The actual status of drug prices and adjustment factors for drug price calculation: an analysis of ultra-orphan drug development in Japan

Ken Masamune, Akihiko Kawakami

2022

Overview

Background Extremely high prices facilitate drug development for ultra-rare diseases (ultra-orphan drugs). However, various problems arise in terms of healthcare financing and fairness, and the status of ultra-orphan drug pricing remains ambiguous. In this study, we investigated ultra-orphan drug prices in Japan relative to that of other drugs. We examined the relationship between annual expected drug prices and expected sales, and the expected number of patients, for 393 drugs containing new active ingredients for therapeutic use that were listed on the National Health Insurance drug price list in Japan between April 16, 2010 and August 26, 2020. In addition, we compared prices, the drug price calculation method, and price calculation adjustment factors for ultra-orphan and other drugs. Results Drug prices tended to increase as the expected number of patients to whom the drug was administered decreased; however, this trend diminished when the expected number of patients was less than 1000. On the other hand, the expected sales tended to decrease as the number of expected patients decreased, and this tendency was reinforced when the expected number of patients was less than 1000. The cost accounting method tended to be used for the price calculation of ultra-orphan drugs, but there were no price differences based on the drug price calculation method. Regarding the price calculation adjustment factors, the premium for usefulness tended to be higher for ultra-orphan drugs. The premium for marketability was higher for non-orphan drugs but did not differ from that for orphan drugs, except for ultra-orphan drugs. Conclusions The status of drug prices and expected sales differed beyond a threshold of 1000 expected patients, indicating that recovering the development cost for ultra-orphan drugs is difficult. In addition, the higher premium for usefulness for ultra-orphan drugs reflects the largely unmet need of the associated diseases. Scarcity among orphan drugs is not considered for marketability, highlighting the need for a new framework to promote the development of ultra-orphan drugs.

• Publisher: Springer Science and Business Media LLC,BioMed Central,BioMed Central Ltd,Springer Nature B.V,BMC
• Subject: Administrative expenses / Analysis / Commerce / Cost accounting / Distribution costs / Drug Costs / Drug Development / Drug Development - economics / Drug dosages / Drug prices / Health insurance / Health Services Needs and Demand / Health Services Needs and Demand - economics / Human Genetics / Humans / Insurance premiums / Japan / Medical care, Cost of / Medical research / Medicine / Medicine & Public Health / Methods / Orphan Drug Production / Orphan Drug Production - economics / Orphan drugs / Other / Patients / Pediatrics / Pharmacology/Toxicology / Price control / Price regulation / Prices and rates / Pricing / Product development / Profits / R / R&D / Rare Diseases / Rare Diseases - drug therapy / Rare Diseases - economics / Research & development / Ultra-orphan drugs / Ultra-rare disease