CRA Insights

Pricing for rare disease and curative therapies: What’s fair?

June 4, 2020

The furor over the rising cost of pharmaceutical and biotechnology therapies in the US is accelerating. Several proposed policy and legislative initiatives aim to address the issue through new regulations and laws that would require mandates for price negotiations by government and private insurers, limits on price increases, and the introduction of international reference pricing.

As policymakers, payers and other stakeholders grapple with the question of what the healthcare system can afford to pay, the high cost and risk involved in developing innovative therapies has led to the question: what is fair?

In early 2020, CRA conducted research with a broad range of US stakeholders – including payers, physicians, patients, pharma/biotech manufacturers and others – to evaluate what these stakeholders believe is fair with respect to prices of therapies to treat rare conditions. This article presents the findings from research with 50 payer representatives from large commercial health plans and pharmacy benefit managers (30 pharmacy directors and 20 medical directors from organizations with over 290 million total beneficiaries with pharmacy and medical coverage). The research was designed to provide insights into their perceptions of whether the prices of therapies are fair, and how perceptions of fairness depend on characteristics of the therapy, the condition, the patient population, existing price benchmarks and other attributes of the treatment and patient. We explored payer perceptions of fairness for chronic therapies to treat rare diseases and curative therapies for rare diseases.

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