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The Orphan Therapy Trap

The hidden cost of cell therapies for rare diseases

A new publication draws attention to what is, perhaps, the biggest problem facing cell and gene therapies. You might imagine the most pressing considerations facing innovative medicines would be: Do they work, and are they safe? But tight on the heels of these questions are: What if they work and are safe, but nobody can afford to pay for them?

The price of medicines is a continuous source of political infighting in the U.S., while even in Europe, where socialised medicine predominates, the European Union has identified affordability of drugs to be one of the major drivers of unmet medical need . A sad truth is that advanced therapies are making this problem worse. They are the most expensive drugs on the market. For example, Luxterna, the recently approved gene therapy for certain genetic forms of blindness, is reported to cost $850,000 per patient . And it is not alone. By 2014, these high-cost drugs—though only representing 1% of prescriptions in the US—accounted for 32% of spending on medicines . Indeed, so expensive are these new therapies, they are pricing themselves out of the market. Of the 10 advanced therapies that have been approved by the European Medicines Agency, four are now unavailable , cost being a primary factor in the withdrawal of these drugs.

None of this would necessarily be fatal were these advanced therapies able to deliver, and in the simplest sense they do. The clinical outcomes with Luxterna are indeed impressive, and is $850,000 too much to pay to save the sight of a child? The question, though, is how do they impact healthcare more generally? Is the impact positive, or are existing problems only going to be exacerbated?

According to the Alliance for Regenerative Medicine, a representative body for stem and gene therapy companies, there are currently about a thousand clinical trials for advanced therapy products. Of these roughly 600 are for rare diseases , and over 70% of these are for rare cancers. Overwhelmingly, commercially orientated research within the advanced therapies sphere is directed toward rare or orphan disorders. ‘Rare’ in this context means affecting fewer than five in 10,000 people, so a few hundred thousand at most in Europe or the U.S.

Nonetheless, this can still mean a lot of patients in total. Nearly 7,000 rare diseases have been identified, which translates into more than 300 million people worldwide . Unfortunately, each disorder—or cluster of disorders—will probably require its own therapy. Hence in recent years almost half of FDA approvals have been for drugs for orphan diseases, in part thanks to the financial incentives now offered to encourage the generation of these drugs. In other words, advanced therapies are driving toward more and more Luxternas: expensive therapies for niche markets.

Certainly, there is no question that these "orphan drug" indications represent areas of unmet medical need. These are often life-threatening, genetic disorders that cause pain and distress. Seeking cures is an admirable pursuit. But what does it do to the drugs bill? That 32% of spending on expensive medicines is only going to increase, while the major killers—diseases like stroke, heart attack, and dementia—remain under-addressed.

How can this spending on orphan indications be justified? One way would be if the return in terms of improved life expectancy per dollar spent were advantageous in comparison with conventional drugs. Unfortunately, a recent study suggests that this is not the case. In the paper published this month [1], a team at Tufts in Boston reports that orphan drugs are considerably less cost-effective than non-orphan medicines. And while they offer greater health gains than non-orphan drugs, they do so at almost 17-fold greater cost. So, in terms of the incremental health gain, they deliver less per dollar. For a healthcare provider, this is a critical consideration. Whether healthcare is socialised as in the U.K. or largely insurance-based as in the U.S., providers have to decide where to allocate their finite funds. As we know, demand always exceeds provision, so some quantitative assessment of value for money has to be part of the calculation.

What is worse, the Tufts analysis addresses the situation before advanced therapies have made a substantial impact. The study covered the period from 1999 through to 2015, during the period before many of the newer costlier drugs have come online. The average cost of the orphan medicines in the Tufts study was less than $50,000. As we have seen, the newer gene and cell therapies can cost considerably more than that, and the price is rising. We therefore have a strange situation. Economics normally predicts that innovation drives down cost and drives up the accessibility of technology—think anything from cars to wallpaper to personal computing. Here we have innovation driving up cost, and reducing accessibility.

The challenge for advanced therapies is to break out of this cycle. Cell and gene therapies will only deliver on expectations if they can treat the common diseases that afflict the many. Not only will this start to satisfy the core unmet medical needs of our time, it will also allow the economics of scale to kick in. If a successful cell therapy for Alzheimer’s disease could be produced, the return on investment rockets, cost of goods falls, and treatment becomes affordable.

If this transition cannot be achieved, then two outcomes seem likely. The first is the one outlined above: Advanced therapies primarily come to serve a niche market with deep pockets. The second is less obvious but seems equally inevitable. The expectations aroused by the potential of cell therapies will not go away. If it cannot be met by licensed medicines—those treatments either in or approaching clinical trials—then it will be served by unlicensed therapies.

I have written often on previous blogs about the threat posed by feral cell therapies. Products that are neither safe nor effective but which feed on the hopelessness of patients with disorders such as stroke, motor neuron disease, or spinal cord injury. It is surely incumbent on everyone associated with cell therapy—scientists, regulators, investors—to seek to avoid this outcome. Therapies for orphan diseases are fine, and to be encouraged, but to truly succeed, advanced therapies need to deliver for the many, not just the few.


1. Chambers JD, Silver MC, Berklein FC, Cohen JT, Neumann PJ. Orphan Drugs Offer Larger Health Gains but Less Favorable Cost-effectiveness than Non-orphan Drugs. Journal of General Internal Medicine; 2020, doi: 10.1007/s11606-020-05805-2