May 10, 2023

Orphan drugs: Early generation of evidence urgently needed

A team of IQWiG authors, together with Rita Banzi from the Italian Mario Negri Institute, analysed the effects of the lack of evidence on orphan drugs at the European and national level. The result: the need for reform is great.

Portrait photo of our staff member Philip Kranz

Since the introduction of the EU Regulation on drugs for rare diseases (orphan drugs) in the year 2000, the number of newly approved orphan drugs has markedly increased. While 63 orphan drugs were approved in the first decade after the EU Regulation, the number rose to 133 in the second decade. In 2022 alone, 22 orphan drugs were approved.

The orphan drug status granted by the European Medicines Agency (EMA) implies a superior therapeutic benefit (called “significant benefit”) over existing treatment options. This has knock-on effects on national policies: In Germany, for example, a superior therapeutic benefit (called “added benefit”) is automatically assumed for orphan drugs at market entry regardless of the actual evidence available, meaning that this benefit is fictitious. But are new orphan drugs really better than existing treatments? In an article for the BMJ, a team led by Philip Kranz, Natalie McGauran and Thomas Kaiser from the Institute for Quality and Efficiency in Health Care (IQWiG) in Germany, together with Rita Banzi from the Mario Negri Institute for Pharmacological Research in Italy, investigated whether the assumption of superiority is justified. They conclude: We often do not know, because orphan drug status is equated with a superior therapeutic benefit without sufficient evidence to prove it.

For this reason, the authors conclude there is an urgent need to decouple orphan drug status from the label "superior therapeutic benefit". So far, this has been provided for by law in order to create incentives for the development of orphan drugs. However, in the BMJ article the authors argue that this label should only be granted if there is actually robust evidence of a superior therapeutic benefit compared to the standard of care.

Lack of evidence: a Europe-wide problem

Health care systems across Europe are different. However, they all ultimately face the same problem: there is often insufficient evidence to determine whether a new drug offers advantages over existing treatment options. In Germany, where nearly all new drugs are reimbursed, this means that about half of all drugs enter the market with insufficient evidence to show whether they offer real progress for patients. In many other countries where sufficient evidence is a prerequisite for reimbursement, the problem is primarily at a different level: Effective drugs may fail to pass the threshold in cost-effectiveness analyses due to insufficient evidence and not be reimbursed at all – thus depriving patients of important treatment options.

Early generation of evidence needed

Although the feasibility of randomized controlled trials (RCTs) in rare diseases is often questioned, the authors stress that IQWiG's analyses show that using RCTs to generate evidence is also possible for orphan drugs. In order to improve the evidence base for orphan drugs in the future, international rare disease registries should be established to facilitate the conduct of RCTs. Uncertainties due to small study populations could be addressed with statistical methods.

IQWiG Director Thomas Kaiser notes: "Robust evidence comparing a new drug with the standard of care is essential for rational treatment and reimbursement decisions – the early generation of these data, e.g. parallel with the approval process, should therefore be mandatory. Currently, the later reimbursement of orphan drugs is mainly being promoted. However, it is much more important to support the early generation of meaningful study results."

Orphan drug development encouraged by law

In the European Union alone, about 30 million people are affected by more than 6000 different rare diseases. The economic problem in developing orphan drugs is that there is a high demand among affected patients, but the markets are small. This led to legislation to incentivise the development of these drugs: the EU Orphan Regulation of 2000. Since then, at the EU level orphan drug status has been linked to a label of superior therapeutic benefit. However, robust evidence is not required to prove this. Philip Kranz, a researcher in IQWiG’s Drug Assessment Department, explains: "Due to the lack of evidence and the assumption of superiority, the real superior therapeutic benefit remains unclear. This makes it difficult to make informed decisions about clinical use, reimbursement and pricing."

Conclusion of the authors: a label designating that orphan drugs have a real superior therapeutic benefit should be granted only on the basis of robust evidence, and should be completely decoupled from the regulatory approval process. This would create incentives to demonstrate the superiority of the new drug over the standard of care at an early stage, ultimately improving treatment outcomes in patients with rare diseases.

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