The high costs of orphan drugs have made insuring people with rare diseases particularly challenging for health carriers. Janine Graham and Bonnie Schaumburg shared insights on this topic and strategies for managing costs at the ROSE® Conference. Contact us to discuss rare diseases, clinical trials and other value-added services.
From baseball cards to vintage automobiles, the rarer something is, the more expensive it tends to be. Unfortunately for those living with rare diseases, the same holds true in healthcare. In the U.S., a rare disease is defined as any disease that affects fewer than 200,000 Americans at any given time.
In Europe, the term applies to any disease affecting fewer than one in 2,000 people. However defined, rare diseases can present serious health problems and require highly specialized, very costly treatment programs. For health insurers, managing the costs of such treatment can prove especially daunting – but not impossible. RGA’s Janine Graham and Bonnie Schaumburg shared insights on this topic at the Conference. We sat down with them to discuss steps insurers can take to both manage costs and achieve positive outcomes for patients with rare diseases.
According to the National Human Genome Research Institute, medical science has identified more than 6,800 rare diseases, which affect an estimated 25-30 million Americans. So having a rare disease is actually not all that rare: about one in 10 people suffer from a rare disease in the U.S., with over 300 million people affected worldwide. Yet about half of those affected are children, and 30% will not live to see their fifth birthday. And among all people with rare diseases, about 80% are diagnosed with one of the 350 more common varieties.
The costliest rare diseases are indeed quite rare and extraordinarily costly to treat – and herein lies the central challenge for insurers. With no off-the-shelf pharmaceutical options, people with these conditions must turn to medications with prices ranging well into six figures or more per year. And while the government has defined how much Medicare and Medicaid will reimburse, commercial insurance plans often do not have such limits.
The vast majority of costs can be attributed to high-priced “orphan” drugs. The FDA’s Office of Orphan Products Development (OOPD) offers grants to researchers to develop these treatments, which has fueled a dramatic increase in orphan drug development and availability. From 1973 to 1983 only 10 drugs or products for rare diseases came to market; since 1983, more than 600 drugs and biologics have been marketed.
Despite federal grants, the small treatment population leads pharmaceutical companies to charge hefty prices in order to recoup research and development costs. Limited distribution of the drugs also contribute to higher costs along with other financial, political and payor variables. New introductions of these high-priced drugs show no signs of slowing down.
The first step is to identify clients with rare diseases as soon as possible. From there, case managers should assess resources available, preferably in-network, and assemble an interdisciplinary treatment team to define a patient-centered plan. Too often a disconnect exists among parties, especially between the medical side and the financial/claims side. Opening up the channels of communication facilitates value-based care, and ultimately benefits all parties – the patient in particular. With the large number of children affected, families can better define treatment goals for their kids: Do they want to extend life for as long as possible at all costs, or do they want to promote the best quality of life for their loved one? Such questions are obviously not easy to answer, but being able to ask them is a goal well worth working toward.
The most obvious way reinsurance coverage helps protect insurers is by sharing the costs of high-dollar claims, such as those stemming from orphan drugs. With , RGA takes it a step further by offering case management support and assistance in managing these complex, catastrophic claims. Our nurse consultants partner with health plans to identify potential high-cost cases and reserve funds for anticipated treatment. Our goal is to be involved early in the treatment so we can help estimate costs and identify resources to ensure quality and value-based care.
Our goal is to familiarize attendees with key resources for identifying rare diseases and to help them recognize case management opportunities to support patients with these conditions. Using hemophilia as an example, we will walk through the process of using claims and pharmacy data to identify patients for case management and partnering with key interdisciplinary team members to develop critical interventions. We will deliver practical information using our own real-world examples and provide insights ready for immediate implementation.
