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Rare diseases are not that rare after all...

Updated: Jul 29, 2022

What are payers views on the current P&MA environment for OMPs in Europe?

Post by Higia Vassoler, Senior Consultant

Will sustainability and equity concerns prompt payers to scrutinize the value of orphan medicinal products (OMPs) more closely in the future? In the EU4+UK, what are the key drivers of willingness to pay for OMPs?

Current Landscape

Rare conditions eligible for orphan designation status are defined by the European Medicines Agency (EMA) as life threatening or chronically debilitating conditions that affect no more than 5 in 10,000 people. In Europe, there are an

estimated 30 million people living with an rare disease [ 1]. Between 2000 and 2020, a total of 2,382 orphan designations were granted for conditions affecting children and adults, with 190 initial orphan marketing authorizations and 34

indication extensions granted by the EMA [ 2].

Not surprisingly, the high volume of orphan designation marketing approvals combined with high per patient costs have led to orphan medicinal products (OMPs) accounting for an increasing share of total pharmaceutical expenditure across Europe, while expenditure on non orphan drugs has been largely limited by policies encouraging increased use of generics and biosimilars [ 3]. This trend reflects a shift in the allocation of healthcare resources towards higher cost specialized therapies for small patient populations.

Are regulatory and reimbursement policies at odds with each other?

Over the past few years, regulatory and financial incentives have been given to pharmaceutical companies to encourage research and development for OMPs in areas of high unmet need. Pharmaceutical manufacturers have responded positively to the numerous incentives embodied in orphan drug legislation issued by the EMA. Incentives include early scientific advice and protocol assistance at reduced fees, access to the centralised authorisation procedure for obtaining marketing authorisation across the European Union, ten years of market exclusivity per approved indication, and additional financial incentives for small and medium sized enterprises (SMEs) developing orphan drugs.

However, once manufacturers get past the regulatory hurdle, achieving reimbursement or the target pricing at the country level is often seen as a significant challenge. The absence of specific OMP policies at the country level has led to unsatisfactory outcomes from the payer, manufacturer and patient

perspectives [4]:

Consequently, analyses on access to OMPs in Europe have indicated strong variation among countries, which may be explained by differences in Pricing & Reimbursement ( P&R ) policies at the country level. For example, specific orphan drug considerations are included in HTA evaluations in France, Germany

and to some extent the UK, but not in Italy and Spain [5].

Chart notes: Since 2000, when the Orphan Regulation came into force, up to end May 2016, the EC granted marketing authorisation to 143 OMPs . Therapies

reimbursed refers to Health Technology Assessment (HTA) recommendations to use or inclusion in reimbursement lists in respective national health systems [5].

Current evidence suggests that France and Germany have the highest rate of OMP access among the EU4+UK markets. Both France and Germany have social insurance based healthcare systems with HTA and P&R decision making centralised at national level. Fewer positive decisions at national level are noted in Italy, Spain and the UK, all of which have tax based healthcare systems with budget allocations and funding decisions often delegated to regions where managed entry agreements and simple discounts are often needed to secure access at regional or hospital level.

Future Landscape

This research focuses on better understanding 1) what the key drivers of value for OMPs are in each of the EU4+UK markets, and 2) whether sustainability and equity concerns are likely to prompt payers to scrutinize the value of OMPs

more closely in the near future.

What are the key drivers of value for OMPs in EU4+UK markets?

Reimbursement decisions are primarily concerned with driving efficiency and improving health outcomes, and the expectation that OMPs should automatically command a higher level of willingness to pay may not be realised in the real


The structural features of P&R systems that facilitate OMPs access are well known. However, currently there is a need for pharmaceutical stakeholders to better understand what payers’ perspectives on the key drivers of “value” for OMPs are and how these drivers can be leveraged during P&R negotiations.

Payers’ perception of “value” consists of multiple parameters [ 6]; and different aspects of rare diseases may be valued differently by payers across European countries. In view of that, RJW conducted primary research with a total of five

payers from the EU4 + UK to better understand their perspectives on the key drivers of willingness to pay.

Overall, the key drivers of willingness to pay identified across all markets were the level of added clinical benefit, patients’ capacity to benefit from the therapy in the long term, the level of unmet need in terms of availability of effective therapies, and the severity of the disease in terms of impact on QoL and survival. In contrast, equity considerations, patient preferences, and level of unmet need from a healthcare and broader socio economic perspective (e.g. indirect costs, efficiency gains, impact of disease on carers and family members) were considered less impactful. All payers agreed that disease “rarity” per se is not considered a key driver of willingness to pay.

Interestingly, in Spain and Italy, the level of clinical unmet need (e.g. lack of effective therapies and the severity of the disease) also play an important role as drivers of willingness to pay. In Spain these aspects were rated as more impactful than the level of added clinical benefit provided by the therapy itself. The opposite was true for payers in Germany, France, and the UK.

“The main driver of willingness to pay is clinical need. The first consideration is the drug’s potential to change clinical practice. Rarity per se is not enough.

Prevalence is one thing, and clinical need is another thing. They go together but they are not necessarily correlated.” (Regional payer, HTA expert, ES)

“It is accepted that orphan drugs will provide lower level of evidence. Innovation algorithm has three criteria: quality of evidence is given less importance for orphan drugs, the other two criteria are the unmet needs and the added therapeutic value which will be the key drivers. Direct costs only are accepted. Indirect costs as very rarely considered by AIFA.” (HE advisor ex AIFA, IT)

“In the context of NICE evaluations, it would be wrong to say that disease rarity has no impact on willingness to pay… I am thinking of the highly specialised

technology pathway. However, it only applies in a few exceptional cases per year. I would estimate less than 5% of HTAs.” (NICE HST advisor, UK)

“In Germany access primarily depends on EMA approval and added benefit versus SoC [standard of care]. Early payer advice is very important around

trial design, unmet need, etc... this sets the ground for price negotiations.” (KK regional payer, DE)

“The high cost of orphan drugs for severe diseases has to be justified by the added clinical value and a relatively low budget impact due to the small

population.” (ex president TC, FR)

2) Will sustainability and equity concerns prompt payers to scrutinize the value of OMPs more closely?

Decisions that concern shifting resources from other areas of healthcare provision to fund high cost therapies to treat a minority of patients may only be justifiable on equity grounds and the assumption that society desires equal treatment

rights for all, irrespective of e.g., the prevalence or severity of their individual conditions. Such equity considerations are not always clearly defined or explicitly stated by policymakers and budget holders.


Cost containment in the German healthcare system is an ongoing discussion, and a more restrictive approach is likely to be pursued by the newly formed government, both for orphan and non orphan medicines. Although there is little

visibility at the moment, potential reforms could include increased rebates, reducing the free pricing period from 12 to 6 months, increased requirements for post launch data collection, periodic re evaluations of a drug's benefits, and

price renegotiations if deemed necessary as new evidence arises [ 7]. There is also ongoing discussion questioning whether the current system should be reformed to address the low level of evidence that OMPs can have at time of launch. Some payers argue that a low price should initially be applied, and as additional evidence is collected overtime, the price could be increased until a final price that reflects the drug’s actual clinical value is reached.

“Orphan drugs is an area of concern for payers. We have seen the Paretto principle playing out. In 2012, 80% of the drug costs were incurred by about 20% of insurees, nowadays less than 14% of insurees account for 80% of drug expenditure. We definitely see a shift of resources. One of the issues for payers is that in Germany we have automatic reimbursement. There is no fourth hurdle like in other European markets. This will probably have to change at some point.” (KK regional payer, DE)

There have been recent examples of orphan drugs (e.g. Zynteglo and Glybera) that failed to establish market access in Germany, because the prices requested by the manufacturer were deemed to be prohibitive by payers. These examples highlight the importance of early payer engagement and the need for tailoring managed agreements to the product and the evidence package. Payers do not

view all OMPs in the same way. There are three broad categories of OMPs each faces different challenges:

(1) OMPs in very rare or ultra rare indications where there are no treatments available. The standard of care is comprised of low cost symptomatic therapies and there are no price benchmarks. Payers are mostly concerned with the budget impact of treating a previously untreated patient population and outcomes based contracts based on insurance claims data may be difficult to implement due to low patient numbers. In this situation, a national level agreement may be the only option to meet requirements for additional evidence generation and lay the foundation for successful price negotiations.

“Ultra orphans will find it harder to establish themselves in the German market, it will be impossible to set up and negotiate outcomes based contracts with insurers if you have only 10 or 20 patients in the country in total, unless they do that at national level” (KK regional payer, DE)

(2) OMPs in oncology indications targeting a small subpopulation with high unmet need: these drugs are viewed as last resort after failure of earlier lines of treatment e.g. CAR T therapies. These are less of a concern for payers due to the limited size of eligible subpopulations and the availability of analogues for price benchmarking. Early engagement for the development for outcomes based contracts is considered a key success driver.

“Key success factors for ODs in Germany is transparency and early engagement, for example we started negotiating outcomes based contracts for CAR Ts at least one year before they were launched ..””(KK regional payer, DE)

(3) OMPs that seek to replace an existing therapy that already incurs a high budget impact for payers, such as gene therapies indicated for the treatment of haemophilia and diabetes. For this category, durability of effect and long term cost offsets will be the main focus of price negotiations. Much early payer engagement is considered essential in order to agree on the collection of appropriate outcomes data and collaboratively develop tailored contracts.

“Contracts need to be tailored to the product, they are very specific diseases, so all parameters need to be negotiated and it takes time especially for US companies with US focused evidence packages We are now talking to companies that will launch their products in 2 or 3 years ..““(KK regional payer, DE)

Italy and Spain

In contrast, Italian and Spanish payers indicated that there isn’t a strong need at present for the creation of specific OMP policies, and there is no underlying political willingness to reform the current system. Despite per patient annual

treatment cost reaching up to several hundreds of thousands of euros for some OMPs, per capita spending is considered to be relatively small. In both countries, there are no special criteria for the assessment of OMPs and reimbursement

decisions are managed on a case by case basis.

“There is a favourable public opinion and quite a high willingness to pay for orphan drugs in Italy There are often specific regional laws and budgets for the

reimbursement of orphan drugs that are not reimbursed at national level I do not expect any changes in the future because the system works very well ..””(HE advisor ex AIFA, IT)

In particular, the Spanish payer interviewed stated that OMPs do not pose a threat to sustainability he pointed out that if a dynamic analysis of the market is considered, drug expenditure remains flat overall despite a shift in resources towards higher cost therapies. Lower expenditure in genericised therapeutic areas cancel out the introduction of innovative high cost therapies overall. He also noted that there are no genericised drugs in the orphan drugs space, therefore it is expected that expenditure will be relatively high.

“There is a lot of noise around orphan drugs but in reality, it is not such a big issue We need to look at the relative numbers, not absolute numbers Do you spend more on mobile phones today than you did 20 years ago? Yes, because there were no mobile phones before A special policy for orphan drugs has never

been on the table There is no national level strategy for overall management of orphan drugs, payers manage it drug by drug, disease by disease ..””(Regional

payer, HTA expert, ES)

Of note, both Italy and Spain now formally incorporate health economic evaluations as part of reimbursement and price negotiations. However, the use of specific cost effectiveness thresholds, like those in the UK, are unlikely to be put in place. Budget impact considerations will remain the key driver of access and price


“Health economic evaluation, different to the UK, is just another piece of information added to the evaluation process We have been saying that CE

analysis does not make sense for orphan drugs, but the MoH still wants to have this piece of comparative analysis ..””(Regional payer, HTA expert, ES)

“In Italy we have a list price that is published, and it is often very high, but the net price can have quite a wide range of discounts from 0 40 We are a country

based on budget impact, so the final patient population size is the key parameter for setting net price ..””(HE advisor ex AIFA, IT)


Evaluation of OMPs in France is highly centralised and reimbursement is relatively high in relation to some European counterparts.

Reimbursement decisions are based on the opinion of the French National Authority for Health ( Haute Autorité de Santé HAS) in relation to the drug’s actual clinical benefit (SMR rating) and clinical added value (ASMR).

Finally, it should be noted that where there are different levels of reimbursement for regular drugs, most OMPs are fully reimbursed through the French ALD (chronic rare diseases) system or through add on payments for hospital use.

There is a fast track procedure for innovative drugs, where assessment starts before marketing authorisation. For a drug to be presumed innovative it must address a need that is not yet covered or that is poorly covered by current

therapeutic alternatives, among other criteria.

OMPs by definition are more likely to meet the criteria for innovative drug status and therefore are more likely to benefit from the fast track procedure. France makes extensive use of its “early access” programme for rare diseases, with

70% of the currently reimbursed OMPs having benefited from early access to some extent.

Although the same clinical assessment criteria would still apply to both non orphan and OMPs, there is some lenience towards a lower level of evidence for rare diseases.

“The same principles apply for the evaluation of orphan and non orphan drugs. The only difference is the level of uncertainty that is accepted for orphan drugs, in terms of methodological robustness and clinical outcomes” (ex president TC, FR)

However, once the HAS Transparency Committee (TC) has issued a recommendation, extended price negotiations with the CEPS can often be a key source of delay. Price volume or agreements subject to additional evidence

generation are often needed for access, where the drug’s therapeutic benefit is uncertain or varies by sub population [ 8].


The UK uses cost effectiveness criteria with little or no allowance for orphan status. The decision to fund a drug in the NHS is based on the assessment of clinical benefit and price, both of which are handled by a single body (NICE).

Overall, there are no plans for the introduction of orphan specific policies, and access to NHS funding will continue to be determined by cost effectiveness thresholds.

“Companies price according to an industry generated concept of a 'rare disease' price, often based on analogue rather than added value. The result is delay in access, while the company considers what discount it can offer. Key to market access in the UK is to propose a final price that reflects the added value in terms of QALYs/savings, not an aspirational price for the American market.” (NICE HST adviser, UK)

“There is no specific budget for orphan drugs. The view is that all medicines need to go through NICE/SMC and if they are effective and cost effective then they will be funded, regardless of orphan drug status”. (NICE HST adviser, UK)

Although there are no orphan specific policies on the horizon, some of changes to the NICE methodology that will be implemented from 2022 could indirectly benefit certain OMPs. Firstly, the introduction of a disease severity modifier means

that if the innovative therapy is indicated in a severe population, regardless of orphan status, a slightly higher cost per QALY threshold may be accepted. Although the increase in ICER threshold is unlikely to be game changing e.g. 35

40K rather than 30K per QALY.

Secondly, manufacturers have long questioned the suitability of the cost per QALY thresholds used in the standard technology appraisal (STA) pathway for OMPs. Manufacturers have also long argued that the criteria for drug assessment

through the Highly Specialized Therapy (HST) pathway lacked transparency and was too restrictive.

Note, the HST pathway provides a higher ICER threshold than the STA programme (£100 300K per QALY versus £20 30K) and offers more flexibility in terms of evidence requirements.

Under the reformed NICE methodology that will be effective from 2022, there will be a more transparent criteria for access to the HST pathway, which is a welcome development for manufacturers. Although HST access will remain very restrictive. Many drugs granted orphan designation status at EMA level (e.g. affecting no more than 5 in 10,000 people) will still not be eligible for the HST pathway. More specifically, the main eligibility criteria for a NICE evaluation through the HST pathway includes therapies for very rare conditions i.e. <1 in 50,000 affecting no

more than 300 patients in its licensed indication and no more than 500 patients across all of its indications, with no satisfactory standard of care and which has a severe impact on quality of life or life span.

Perhaps more relevant than the changes to NICE methodology is the roll out of the Innovative Medicines Fund in the UK backed by £680 million in ring fenced funds [ 9], which extends the concept of the Cancer Drugs Fund to non cancer medicines. The initiative, which is currently under stakeholder consultation, could

allow access/reimbursement while an agreed plan for evidence development is pursued. This could potentially help orphan status medicines with an immature evidence base to obtain earlier access. However, once the drug obtains the required level of evidence to proceed to formal inclusion in the NHS through NICE evaluation, the cost per QALY thresholds currently in place would remain unchanged.


Current data published in the literature suggests there is significant variation in OMPs access among EU4 + UK. This payer research suggests that despite differing levels of market access and pricing hurdles at national level, the actual rate of

access may be more even than previously thought across Europe, if decentralised reimbursement decisions and delayed access were also taken into account e.g. in the UK and Spain. The main differences observed among the countries in scope were in terms of key value drivers, the importance of early engagement and scientific advice, the role of cost effectiveness analysis and the extent to which budget impact considerations influence decision making.

What all markets have in common is the fact that payers do not see a need for the implementation of specific OMPs policies at present. It is also widely accepted that OMPs may justifiably present with less robust evidence packages initially, and specific access pathways based on additional evidence generation have become the norm.

The hypothesis that sustainability and equity concerns may lead payers to scrutinize the value of OMPs more closely has not been proven across countries in scope, except Germany. The current levels of OMPs access are viewed by payers as

appropriate in the UK, France, Spain and Italy, and it is believed that current cost effectiveness and budget impact tests are here to stay. Germany may move towards a more restrictive approach in line with other European countries; however, it is still too early to speculate on any new measures that the new government may introduce. Overall, payers in all five countries indicated there is

currently a high willingness to pay for effective treatments addressing areas of high unmet need, provided the proposed price reflects the level of additional clinical benefit demonstrated.

Payers from all countries emphasised the need for manufacturers to tailor their evidence generation plans to the needs of European markets, with the aim of demonstrating added clinical benefit in relation to the standard of care. This is recognised as the most important pillar for successful price negotiations. Rarity per se is not viewed as a driver of value; instead low patient numbers need to be translated into a budget impact value message. Payers also emphasised the importance of communicating the unmet need, and the potential of the therapy to change current clinical practice in order to drive willingness to pay.


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  2. EMA, "Orphan Medicines Figures 2000-2020," [Online]. Available: [Accessed September 2021].

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  4. M. Drummond and A. Towse, "Orphan drugs policies: a suitable case for treatment.," The European Journal of Health Economics. , pp. 1;15(4):335 40, 2014 May.

  5. Zamora B, Maignen F, O’Neill P, Mestre Ferrandiz J and G. M., " Comparing access to orphan medicinal products in Europe.," Orphanet journal of rare diseases. , pp. 14(1):1 2., 2019 Dec;.

  6. D. Korchagina, "PSY138 What Drives ASMR of Orphan Drugs?," 2016. [Online]. Available:

  7. M. Czech, A. Baran Kooiker, K. Atikeler, M. Demirtshyan, K. Gaitova, M. Holownia-Voloskova, A. Turcu Stiolica, C. P. O. Kooiker, N. Konstandyan and O. Zalis' Ka, "A review of rare disease policies and orphan drug reimbursement systems in 12 Eurasian countries.," Frontiers in public health., p. 28;7:416., 2020 Jan.

  8. M. Bourdoncle, B. Juillard Condat and F.Taboulet, "Patient access to orphan drugs in France.," Orphanet journal of rare diseases. , pp. 14(1):1 9., 2019 Dec;.

  9. “NHS England announces new Innovative Medicines Fund to fast track promising new drugs," July 2021. [Online]. Available:

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