IDEAS home Printed from https://ideas.repec.org/a/gam/jijerp/v19y2022i19p12098-d924110.html
   My bibliography  Save this article

Comparison of US and EU Prices for Orphan Drugs in the Perspective of the Considered US Orphan Drugs Act Modifications and Discussed Price-Regulation Mechanisms Adjustments in US and European Union

Author

Listed:
  • Paweł Żelewski

    (Department of Economics, Kozminsky University, 03-301 Warsaw, Poland)

  • Michał Wojna

    (Department of Economics, Kozminsky University, 03-301 Warsaw, Poland
    Department of Health Economics and Medical Law, Medical University of Warsaw, Żwirk i Wigury 81 St., 02-091 Warsaw, Poland)

  • Katarzyna Sygit

    (Faculty of Health Sciences, Calisia University, 62-800 Kalisz, Poland)

  • Elżbieta Cipora

    (Medical Institute, Jan Grodek State University in Sanok, 38-500 Sanok, Poland)

  • Izabela Gąska

    (Medical Institute, Jan Grodek State University in Sanok, 38-500 Sanok, Poland)

  • Mateusz Niemiec

    (Medical Institute, Jan Grodek State University in Sanok, 38-500 Sanok, Poland)

  • Mateusz Kaczmarski

    (Medical Institute, Jan Grodek State University in Sanok, 38-500 Sanok, Poland)

  • Tomasz Banaś

    (Department of Gynaecology and Oncology, Jagiellonian University Medical College, 31-501 Cracow, Poland
    Department of Radiotherapy, Maria Sklodowska-Curie Institute-Oncology Centre, 31-115 Cracow, Poland)

  • Beata Karakiewicz

    (Subdepartment of Social Medicine and Public Health, Department of Social Medicine, Pomeranian Medical University in Szczecin, 70-204 Szczecin, Poland)

  • Artur Kotwas

    (Subdepartment of Social Medicine and Public Health, Department of Social Medicine, Pomeranian Medical University in Szczecin, 70-204 Szczecin, Poland)

  • Paulina Zabielska

    (Subdepartment of Social Medicine and Public Health, Department of Social Medicine, Pomeranian Medical University in Szczecin, 70-204 Szczecin, Poland)

  • Olga Partyka

    (Department of Health Economics and Medical Law, Medical University of Warsaw, Żwirk i Wigury 81 St., 02-091 Warsaw, Poland
    Department of Economic and System Analyses, National Institute of Public Health—NIH—National Research Institute, 00-791 Warsaw, Poland)

  • Monika Pajewska

    (Department of Economic and System Analyses, National Institute of Public Health—NIH—National Research Institute, 00-791 Warsaw, Poland)

  • Edyta Krzych-Fałta

    (Department of Basic of Nursing, Faculty of Health Sciences, Medical University of Warsaw, 01-445 Warsaw, Poland)

  • Ewa Bandurska

    (Center for Competence Development, Integrated Care and e-Health, Medical University of Gdańsk, 80-204 Gdansk, Poland)

  • Weronika Ciećko

    (Center for Competence Development, Integrated Care and e-Health, Medical University of Gdańsk, 80-204 Gdansk, Poland)

  • Aleksandra Czerw

    (Department of Health Economics and Medical Law, Medical University of Warsaw, Żwirk i Wigury 81 St., 02-091 Warsaw, Poland
    Department of Economic and System Analyses, National Institute of Public Health—NIH—National Research Institute, 00-791 Warsaw, Poland)

Abstract

The 2019 worldwide sales of Orphan Drugs were estimated at $136 billion USD, which constituted 16% of the global pharmaceutical prescription market and is expected to grow by 12% in the next 5 years. A better understanding of Orphan Drug pricing may contribute to on-going discussions on Orphan Drug Act (ODA) corrections in US or modifications of price setting mechanisms in EU. The objective of the study was comparison and analysis of the prices of Orphan Drugs in US and EU. All drugs with Orphan Drug status were compared in the US and EU. For the US prices, the US Department of Veterans Affairs (VA) was sourced. The EU List Prices came from six EU countries: Denmark, France, Germany, Greece, Poland, Spain. We found US prices to be higher than the six selected EU countries. The average Price Ratio was 1.64. The prices across EU countries were more homogeneous, while the number of the reimbursed and therefore available to patient medicines varied and was correlated with GDP per capita r = 0.87. Considered implementation of the External Reference Price system in US may generate significant savings in the US but may result in upward pressure on pricing of Orphan Drugs in EU. Centralization of the Orphan Drugs pricing negotiations in EU may prevent such development and offer a win-win opportunity for all involved parties.

Suggested Citation

  • Paweł Żelewski & Michał Wojna & Katarzyna Sygit & Elżbieta Cipora & Izabela Gąska & Mateusz Niemiec & Mateusz Kaczmarski & Tomasz Banaś & Beata Karakiewicz & Artur Kotwas & Paulina Zabielska & Olga Pa, 2022. "Comparison of US and EU Prices for Orphan Drugs in the Perspective of the Considered US Orphan Drugs Act Modifications and Discussed Price-Regulation Mechanisms Adjustments in US and European Union," IJERPH, MDPI, vol. 19(19), pages 1-17, September.
    • Handle: RePEc:gam:jijerp:v:19:y:2022:i:19:p:12098-:d:924110
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1660-4601/19/19/12098/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1660-4601/19/19/12098/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. DiMasi, Joseph A. & Grabowski, Henry G. & Hansen, Ronald W., 2016. "Innovation in the pharmaceutical industry: New estimates of R&D costs," Journal of Health Economics, Elsevier, vol. 47(C), pages 20-33.
    2. T. Joseph Mattingly & Joseph F. Levy & Julia F. Slejko & Nneka C. Onwudiwe & Eleanor M. Perfetto, 2018. "Estimating Drug Costs: How do Manufacturer Net Prices Compare with Other Common US Price References?," PharmacoEconomics, Springer, vol. 36(9), pages 1093-1099, September.
    3. Anna Anderson-Cook & Jared Maeda & Lyle Nelson, 2019. "Prices for and Spending on Specialty Drugs in Medicare Part D and Medicaid: An In-Depth Analysis: Working Paper 2019-02," Working Papers 55011, Congressional Budget Office.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dosis, Anastasios & Muthoo, Abhinay, 2019. "Experimentation in Dynamic R&D Competition," CRETA Online Discussion Paper Series 52, Centre for Research in Economic Theory and its Applications CRETA.
    2. Yusuke Oh & Koji Takahashi, 2020. "R&D and Innovation: Evidence from Patent Data," Bank of Japan Working Paper Series 20-E-7, Bank of Japan.
    3. Gamba, Simona & Magazzini, Laura & Pertile, Paolo, 2021. "R&D and market size: Who benefits from orphan drug legislation?," Journal of Health Economics, Elsevier, vol. 80(C).
    4. Branstetter, Lee & Chatterjee, Chirantan & Higgins, Matthew J., 2022. "Generic competition and the incentives for early-stage pharmaceutical innovation," Research Policy, Elsevier, vol. 51(10).
    5. Alfred B. Ordman, 2022. "When Will the FDA Do What Is in People’s Best Interests?," American Journal of Economics and Sociology, Wiley Blackwell, vol. 81(4), pages 721-751, September.
    6. Edouard Debonneuil & Anne Eyraud-Loisel & Frédéric Planchet, 2018. "Can Pension Funds Partially Manage Longevity Risk by Investing in a Longevity Megafund?," Risks, MDPI, vol. 6(3), pages 1-27, July.
    7. Billette de Villemeur, Etienne & Versaevel, Bruno, 2019. "One lab, two firms, many possibilities: On R&D outsourcing in the biopharmaceutical industry," Journal of Health Economics, Elsevier, vol. 65(C), pages 260-283.
    8. Salas-Vega, Sebastian & Shearer, Emily & Mossialos, Elias, 2020. "Relationship between costs and clinical benefits of new cancer medicines in Australia, France, the UK, and the US," Social Science & Medicine, Elsevier, vol. 258(C).
    9. Fabian Gaessler & Stefan Wagner, 2022. "Patents, Data Exclusivity, and the Development of New Drugs," The Review of Economics and Statistics, MIT Press, vol. 104(3), pages 571-586, May.
    10. Gregor Dorfleitner & Felix Rößle, 2018. "The financial performance of the health care industry: a global, regional and industry specific empirical investigation," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 19(4), pages 585-594, May.
    11. Farasat A. S. Bokhari & Franco Mariuzzo & Anna Rita Bennato, 2021. "Innovation and growth in the UK pharmaceuticals: the case of product and marketing introductions," Small Business Economics, Springer, vol. 57(1), pages 603-634, June.
    12. Stig Johan Wiklund, 2019. "A modelling framework for improved design and decision-making in drug development," PLOS ONE, Public Library of Science, vol. 14(8), pages 1-22, August.
    13. Yin, Nina, 2023. "Pharmaceuticals, incremental innovation and market exclusivity," International Journal of Industrial Organization, Elsevier, vol. 87(C).
    14. Heyoung Yang & Hyuck Jai Lee, 2018. "Long-Term Collaboration Network Based on ClinicalTrials.gov Database in the Pharmaceutical Industry," Sustainability, MDPI, vol. 10(2), pages 1-14, January.
    15. Ralph Siebert & Zhili Tian, 2020. "Dynamic Mergers Effects on R&D Investments and Drug Development across Research Phases in the Pharmaceutical Industry," CESifo Working Paper Series 8303, CESifo.
    16. Stacy Sneeringer & Matt Clancy, 2020. "Incentivizing New Veterinary Pharmaceutical Products to Combat Antibiotic Resistance," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(4), pages 653-673, December.
    17. Gemma Turon & Jason Hlozek & John G. Woodland & Ankur Kumar & Kelly Chibale & Miquel Duran-Frigola, 2023. "First fully-automated AI/ML virtual screening cascade implemented at a drug discovery centre in Africa," Nature Communications, Nature, vol. 14(1), pages 1-11, December.
    18. Adrian Towse;Jimena Ferraro;Jorge Mestre-Ferrandiz, 2017. "Incentives for New Drugs to Tackle Anti-Microbial Resistance," Briefing 001842, Office of Health Economics.
    19. Steffen Nauhaus & Johannes Luger & Sebastian Raisch, 2021. "Strategic Decision Making in the Digital Age: Expert Sentiment and Corporate Capital Allocation," Journal of Management Studies, Wiley Blackwell, vol. 58(7), pages 1933-1961, November.
    20. Daniel Tobias Michaeli & Hasan Basri Yagmur & Timur Achmadeev & Thomas Michaeli, 2022. "Value drivers of development stage biopharma companies," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(8), pages 1287-1296, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jijerp:v:19:y:2022:i:19:p:12098-:d:924110. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.