Mar 19

Mar 19 Barriers in Rare Disease Treatment: The Expense of Orphan Drugs in Canada

Canada, a country known and celebrated for its universal healthcare system, continues to have no national policy for the regulation or reimbursement for orphan drugs.¹ Orphan drugs are developed to treat rare diseases, being created out of a public health need rather than economic potential. They are necessary for conditions in which there is limited to no treatment available. Policies to regulate their specific use and reimbursement in Canada do not exist, leaving people vulnerable in terms of cost and approval time.

Failure to create any form of national policy on orphan drugs has led to inequitable access for Canadians based on price and differences in coverage by region. With minor exceptions, orphan drugs are considered for reimbursement through the Canadian Drug Review (CDR). The CDR is responsible for evaluating potential drug treatments based on therapeutic use and cost effectiveness. In 2016, the CDR held an impressive 86.7% recommendation rate for public funding, however, 84.6% were conditional on lower pricing.² The recommendation rate will inform government officials in deciding whether or not to publicly fund the treatment. Historically, it has been the highest in instances of clinical success matched with a lower price tag. Orphan drugs, with their higher than normal cost, are then less likely to be incorporated into government drug plans.

Quebec has a separate health technology assessment agency, L’Institut national d'excellence en santé et en services sociaux (INESSS), which acts to evaluate therapeutics with the same purpose as the CDR. The quality of care in the province differs in that Quebec has a mandatory, mixed public and private drug insurance plan. This covers senior citizens and others who are not covered by private insurance under their employer. Though, the majority of employers purchase private insurance plans for their employees. Private insurance plans typically provide a much wider coverage, and at the minimum are required to match what would be covered under the public plan. Additionally, private plans take less time to secure specific medications. This approach to healthcare insurance allows for greater, quicker, and more accessible reimbursement—which is of particular concern with high cost treatments like orphan drugs.

Drug pricing is determined by a multitude of factors: development costs and assessed risks, number of potential recipients, and what employers, unions, and associations are willing to pay. Recommendations made by Canada’s health technology assessment agencies guide the decisions of insurance companies regarding potential coverage. However, the more specific details of this process is not made available to the public. The pan-Canadian Pharmaceutical Alliance (pCPA) is composed of individuals representing provincial, territorial, and federal governments. They then facilitate negotiations between pharmaceutical companies and branches of government to gain access to prescription drugs at a lower cost. Each jurisdiction has the ability to decide on whether or not to make the drug available via the pCPA, which allows for and arranges collective product listing. Once a drug has been negotiated successfully, it is reviewed another time by each branch of government to assess it within the limitations of their drug plan budget. The Canadian federal government has continuously focussed on the “affordability, accessibility, and appropriate use of prescription drugs".³ In working to make common drugs cheaper, they fail to address the pricing of orphan drugs used in the treatment of specific cancers or rare diseases.

Pharmaceutical companies often justify the extreme prices for orphan drugs by relating it back to the unique and small population they’re designed for. With fewer people in need of the treatment, pharmaceutical manufacturers argue that they must charge a premium to recover development costs. However, this is not always true. Researchers and pharmaceutical companies have a tendency to focus on a very niche target, but the use of molecules with a variety of biological activities and targets is itself less specific than intended. Many developed orphan drugs may be approved for the treatment of multiple rare diseases or even common ones, which enlarges the potential patient population. Infliximab, an antiinflammatory drug, was first used to treat patients with Crohn's disease. It has since been found to be effective in the treatment and management of ankylosing spondylitis, rheumatoid arthritis, and psoriatic arthritis.⁷ Despite an increase in the usability of this drug since development first began, there has not been a reflection of this in terms of pricing.

The United States of America first introduced the American Orphan Drug Act (ODA) in 1983. The purpose of the act was to encourage orphan drug development and investment. In the US, pharmaceutical manufacturers receive 7 years of marketing exclusivity, are eligible for business and academic grants, have a waiver of submission fees, and can receive a 50% tax credit for costs involved with clinical testing.⁸ As a result, there has been a substantial increase in the number of orphan drugs being developed and recommended for consumer approval. However, high pricing remains an issue for orphan drugs as innovation in drug development has been seen alongside large price increases.

Nephropathic cystinosis is a rare lysosomal storage disorder that leads to potentially fatal kidney disease.⁹ Both Canadians and Americans with this condition used to be prescribed Cystagon, a relatively inexpensive drug that cost $5,000 a year. The drug Procysbi has now replaced it, having the same chemical base but a longer lasting effect. However, it rings in at a staggering $300,000 per year.¹⁰ Pharmaceutical companies profit off of the development of new orphan drugs with slight improvements or alterations, making the cheaper, previously used drugs outdated. Consequently, patients that have relied on those drugs can no longer be prescribed them and must resort to the more expensive alternative. Additionally, as patents on popular prescription drugs expire, tax incentives outside of Canada serve as motivation for pharmaceutical companies to turn to the rare disease market for future growth.

Canadians with rare diseases face additional barriers in receiving treatment due to a lack of organized national policy. Introducing this type of policy would fasten recommendations and approval for use, and help address the issue of pricing. The Canadian Organization for Rare Disorders (CORD) has stated that ‘only 60% of treatments for rare disorders make it into Canada and most get approved up to 6 years later than in the US'.¹¹ The Canadian drug market, as it stands today, is not hospitable for affordable and thereby accessible orphan drugs. While orphan drug development has surged in recent years, access to life-altering medications is limited and 95% of rare disorders continue to be labelled as untreatable.¹¹

Mya Elisabeth George

Works Cited

“Price and Clinical Factors Impact Canadian Orphan Drug Recommendation Rates.” AJMC, www.ajmc.com/view/in-canada-price-and-clinical-factors-impact-recommendation-rates.
Loorand-Stiver, L., et al. “Common Drug Review Recommendations for Orphan Drugs in Canada: Basis of Recommendations and Comparison with Similar Reviews in Quebec, Australia, Scotland and New Zealand.” Orphanet Journal of Rare Diseases, BioMed Central, 1 Jan. 1970, ojrd.biomedcentral.com/articles/10.1186/s13023-018-0759-9.
Labrie, Yanick. “Lessons from the Quebec Universal Prescription Drug Insurance Program.” Fraser Institute 2019, www.fraserinstitute.org/sites/default/files/lessons-quebec-universal-prescription-drug-insurance-program.pdf.
“FTC Seeking Information About J&J's Strategy for Brand-Name Infliximab, Remicade.” The Center For Biosimilars, www.centerforbiosimilars.com/view/ftc-seeking-information-about-jjs-strategy-for-brandname-infliximab-remicade.
“Table 1, Cost Comparison Table of Biologics for the Treatment of Crohn's Disease - Entyvio (Vedolizumab) - NCBI Bookshelf.” Entyvio (Vedolizumab) [Internet]., U.S. National Library of Medicine, www.ncbi.nlm.nih.gov/books/NBK424364/table/T68/.
“2018 Impact of Inflammatory Bowel Disease in Canada.” Crohn's and Colitis Canada, crohnsandcolitis.ca/Crohns_and_Colitis/documents/reports/2018-Impact-Report-LR.pdf.
MA. Ahmed, M., SA. Al-Zaidy, J., U. Asghar, A., Carroll, J., Chen, T., D. Concolino, F., . . . Zschocke, J. “One drug to treat many diseases: Unlocking the economic trap of rare diseases.” https://link.springer.com/article/10.1007/s11011-020-00617-z
“5 Things About the Orphan Drug Act.” AJMC, www.ajmc.com/view/5-things-about-the-orphan-drug-act.
Bäumner, S., & Weber, L. “Nephropathic Cystinosis: Symptoms, Treatment, and Perspectives of a Systemic Disease.” https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5861330/
Hunter, J. “Rare diseases, expensive drugs - Health Canada showdown coming.” https://www.theglobeandmail.com/canada/british-columbia/article-rare-diseases-expensive-drugs-health-canada-showdown-coming/
“We Believe That Now Is the Time to Act to Provide Hope and Treatment to Canadians and Their Families Who Are Impacted by a Rare Disease.” CORD, www.raredisorders.ca/our-work/.
Rawson, Nigel S. B. “Regulatory, Reimbursement, and Pricing Barriers to Accessing Drugs for Rare Disorders in Canada.” Fraser Institute 2018, www.fraserinstitute.org/sites/default/files/barriers-to-accessing-drugs-for-rare-disorders-in-canada.pdf.

Cite This Article:

George ME., Pham E., Zada D. Barriers in Rare Disease Treatment: The Expense of Orphan Drugs in Canada. Illustrated by S. Montakhaby Nodeh. Rare Disease Review. March 2021. DOI: 10.13140/RG.2.2.14866.99526