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Determinants of the Financial Impact of Orphan Drugs in Italy: Differences Between Expected and Observed
Francesco Saverio Mennini1, Americo Cicchetti2, Paolo Sciattella3
1Departments of Healthcare Planning, Medical Devices, Pharmaceuticals, and Policies in Support of the National Health Service, Italian Ministry of Health, Rome, Italy.
Background:
The increasing demand for orphan drugs and the financial challenges associated with their reimbursement highlights the need to understand the dynamics between expected and actual pharmaceutical expenditures, particularly in the context of pricing and reimbursement negotiations.
Objective:
The study aims to identify the potential determinants of the difference in expected pharmaceutical spending after negotiation and the actual expenditure incurred (ΔS), as well as the difference in expected pharmaceutical spending before and after the price and reimbursement negotiation process (ΔSn) for rare disease drugs in Italy.
Methods:
The analysis focused on orphan drugs authorised by European Medicines Agency, with reimbursement applications to the Italian Medicines Agency from January 2013 to January 2019. Expected post-negotiation spending was estimated by applying negotiated discounts and financial-based market entry agreements to the expected pharmaceutical expenditure. The actual expenditure was approximated through company turnovers. Beta regression models were applied to identify potential determinants of ΔS and ΔSn.
Results:
The study analysed 52 reimbursed orphan drugs, with 41 (78.8%) with a single indication, 25 (48.1%) antineoplastics and immunomodulators and 18 (34.6%) conditionally/fully innovative. The median expenditure in the first 3 years post-commercialisation was 7.6% lower than expected post-negotiation. The reduction was less pronounced for innovative drugs (p = 0.011), drugs with a prices and reimbursement procedure in the subsequent 3 years (p = 0.007) and those with multiple indications (p = 0.021). Payment-by-result was the only significant variable associated with the expected spending ratio before and after negotiation (p = 0.002).
Conclusion:
The actual expenditure for orphan drugs aligns with the expected post-negotiation. Yet, innovative orphan drugs exhibit a higher actual expenditure than estimated, suggesting the market values their added therapeutic value or the actual therapeutic need they meet, and configuring innovativeness status as the main determinant of the orphan drugs financial impact in the multiple regression analysis.
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