A Dolon Institute presentation
Rare disease innovation faces a distinctive pricing challenge: new orphan medicines can be assessed against inexpensive, established treatments that are used off-label, despite those treatments not necessarily having been developed, tested or licensed for the same indication. This presentation explores how the widespread use of rituximab in rare diseases illustrates this challenge and the potential consequences for future rare disease innovation.
The ‘rituximab effect’ refers to the impact of a low-cost comparator that has become widely used across multiple rare and autoimmune conditions. Rituximab is referenced in guidelines and studies across a broad range of orphan indications, with multiple biosimilars now available in Europe and an estimated cost of around €5,000–€10,000. This creates a very different pricing starting point for a newly developed, specifically indicated orphan medicine entering the same treatment landscape.
The presentation from World Evidence, Pricing and Access (EPA) highlights the resulting “pricing gap”. A new medicine may demonstrate meaningful added value over an existing off-label treatment, but the comparator’s low price can heavily influence payer willingness to pay. In effect, the price of the comparator may become an anchor against which the new medicine is judged, making it difficult for manufacturers to secure a price that reflects both the medicine’s value and the economics required to sustain investment in future orphan drug development.
This is particularly significant because the underlying economics of orphan medicine development are already challenging. The presentation notes that there is no agreed European pricing framework that explicitly accounts for rarity, while around half of orphan medicines have annual EU sales of €10 million or less. The analysis cited estimates that only 17.2% of orphan medicines launched between 2000 and 2020 were economically viable in Europe, highlighting the potential tension between affordability at launch and maintaining incentives for future innovation.
The presentation therefore argues for a more robust approach to pricing strategy and rationale. Rather than relying on a single methodology, manufacturers can triangulate a pricing corridor using multiple perspectives, including clinical value, willingness to pay, cost-effectiveness, affordability, comparable orphan medicines and the economic requirements for sustainable innovation.
It also explores different ways of addressing a gap between a target price and payer willingness to pay, ranging from additional evidence and negotiation or contracting approaches through to managed entry agreements, policy proposals and changes to HTA or pricing frameworks.