Pharmaceutical expenditure on drugs for rare diseases in Canada: a historical (2007–13) and prospective (2014–18) MIDAS sales data analysis

The ODA led to an increase in the number of approved orphan drugs in the US, which also led to an associated increase in the number of drugs available to benefit many people with previously underserved rare conditions in Canada. While associated orphan drug expenditure has increased, the population using these orphan drugs is relatively small. Total orphan drug expenditure, when considered out of total drug expenditure, is comparatively low, representing less than 6 % of total pharmaceutical expenditure. While both total orphan drug and total drug expenditure are forecasted to increase, future trend analysis suggests that orphan drug expenditure in 2014–18 will remain stable below 6 % as a proportion of total drug expenditure. This may be related to drug spending accounting for a declining share of total health dollars, as reported by the Canadian Institute for Health Information in 2013 [15]. To aid in the interpretation of our study findings, in a broader context, drug expenditure represents a minority share when considered out of total health care expenditure. For example, in 2013, total spending on drugs (including non-prescription drugs [e.g., OTC]) was estimated to represent only 16 % of the total $211 billion spent on health care in Canada, and drug spending growth (2.4 %) was slower compared to both hospital spending (2.6 %) and physician spending (3.6 % growth) [15].

Orphan drug policies in other countries, such as the ODA in the US, were created to address the unmet need for developing therapies to treat rare diseases. Canada is now following these trends, and is currently developing orphan drug policies. Orphan drug policies have led to an increase in the number of drugs to treat patients with rare or orphan diseases in those countries, as well as in Canada. In our analysis, MIDAS captured 95 orphan drugs in 2007 which increased to 133 orphan drugs in 2013. However, we found a significant disparity in the availability of orphan drugs in Canada when we compared the number of unique orphan drugs identified in Canada to the number identified in the US during the same time period. In our parallel US analysis, we captured sales in MIDAS for a total of 316 unique orphan drugs between 2007 and 2013 (out of the total 356 approved unique branded orphan drugs). Only a total of 147 unique orphan drugs were captured in Canada in MIDAS during the same time period demonstrating the disparity in access, consistent with other reports that more than half of the orphan drugs approved in the US are not available in Canada [2, 3].

In our analysis, a quarter of available orphan drugs (39/147) were also indicated to treat non-orphan conditions. This is often not mentioned in critiques of the costs of orphan drugs, and our indication factoring analysis suggests that the majority of unadjusted “partial orphan” drug sales are for non-orphan indications. Adjusted “partial orphan” drug expenditure represented only 5.6– 9.1 % of unadjusted “partial orphan” drug expenditure from 2007–2013.

While our analysis focused on orphan drug expenditure, it is important to consider that these orphan drugs benefit many people with previously underserved rare conditions. Furthermore, these drugs offer significant value to both patients and society such as improvements in health, survival and quality of life, reductions in costly hospitalizations, reduced disabilities, and increased ability to go back to work, resulting in increased productivity. The findings from this analysis suggest that investment in drugs for orphan diseases appears to be justified in Canada. According to the Canadian Organization for Rare Disorders, an estimated 9 % of Canadians suffer from a rare disease. This has been termed as a “paradox of rarity”, in which an individual disease may be rare, but a significant proportion of a country’s population may be affected by a rare disease [16]. Interestingly, expenditure on orphan drugs represented less than 6 % of total pharmaceutical expenditure in Canada from 2007–2013. Although spending on an individual patient level may seem disproportionate compared to drug spending on the individual basis for non-orphan drugs, from the perspectives of society and equity, overall spending on orphan drugs is low, considering the number of patients affected with an orphan disease in Canada, and access remains an issue.

We did not identify any other published studies that evaluated the costs of orphan drugs in Canada. However, our parallel analysis in the US found orphan drug expenditure was generally higher in the US than in Canada (4.8– 8.9 % of total US drug expenditure between 2007 and 2013), while both future trend analyses similarly suggested slowing down in the growth of orphan drug expenditure. Furthermore, a few recent studies have examined the budget impact of orphan drugs in Europe [17–20]. Although methods and data sources varied (based on sales data, disease-based epidemiological models, etc.) limiting comparisons, findings suggest that orphan drug expenditure as a percentage of total pharmaceutical sales in Europe and Canada is comparable. Estimates ranged from 2.5 % in Sweden and 3.1 % in France in 2012 [17], 1.6– 4.2 % from 2007–2012 in the Netherlands [18], 1.9– 4 % from 2008–2013 in Belgium [19] and 3.3 % in 2010 in Europe (Eurozone?+?UK) [20], with growth expected to slow or peak and level off. Comparisons are further limited due to varying country-specific access and reimbursement guidelines and policies.