Giacomo Chiesi, MBA, Head of Chiesi Global Rare Diseases, discusses a white paper titled, “The Burden of Rare Diseases: An Economic Evaluation,” based on the results of a study which demonstrate that rare diseases impose substantial economic burden which can be reduced with availability of approved treatments.
As Mr. Chiesi explains, the goals of the study were to qualify the macroeconomic societal costs of rare diseases, and whether this cost is affected by a rare disease having an available treatment. Though there are over 7000 rare diseases, a database of 373 rare diseases covering approximately 8.4 million patients in the United States was generated as the basis for the analysis. 227 well-documented diseases, which were considered by physicians and experts to be in the 5 top priority rare therapeutic areas (metabolic, hematologic, immunological, congenital, and neurological disorders) were then pulled from the original 373. Further discussions with patient advocacy groups and physicians led to the selection of 24 rare diseases deemed most relevant in the priority therapeutic areas based on several criteria (e.g., degree of unmet need, relative importance to patient advocacy groups, interest in the scientific community, prevalence, and apparent burden of disease.)
Costs were quantified for each disease per patient per year (PPPY), and were clustered in 3 groups – direct costs, indirect costs, and mortality costs. Direct costs include direct treatment costs (if there is an approved treatment), medical products/procedures, hospitalization, home healthcare, professional services such as nurse visits, and treatment administration costs. Indirect costs include loss of productivity/loss of work for patients/caregivers/family members, home changes, cost of secondary care, and traveling/accommodation. Finally, mortality costs are based on the value of statistical life (VSL; $130,000 per year, $10.3 million for a 79-year average lifespan in the United States) and the difference between average life expectancy and that for people with a rare disease.
The results of the study indicate that for the 24 rare diseases selected, the total cost to society was approximately $125 billion with average overall economic burden PPPY of $266,000, which is approximately 10x the cost associated with mass market diseases ($26,000 PPPY). Overall, burden was generally driven by direct and mortality costs. The results also demonstrate that, when a treatment is approved for a rare disease, average overall economic burden PPPY decreases by 21.2% ($42 thousand), even when treatment cost is included. This is important as it suggests that the cost of the approved therapy decreases other direct, indirect, and mortality costs substantially. Additionally, Mr. Chiesi notes that often with approved therapies, insurance companies are able to take on more of the financial burden which in turn further decreases direct costs.
Finally, when the above results were extrapolated to the 227 rare diseases identified earlier, similar results were obtained. The average cost of rare diseases was still approximately ten times higher than those for mass market diseases. If extrapolated further to the total of 8.4 million people in the United States impacted by the 373 rare diseases in this analysis, the overall cost of rare diseases in the United States is estimated to be $2.2 trillion per year compared with $3.4 trillion per year for 133 million patients with mass market diseases. Further, the overall cost estimate for all rare disease is $7.2 trillion – $8.6 trillion per year, according to this study.
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