Median Drug Prices For Rare Diseases Hit $300K In 2023, Report Highlights Lack of Clear Rationale Behind Escalating Drug Prices

Author: Vandana Singh | February 26, 2024 01:14pm

In a significant trend, pharmaceutical companies in the U.S. introduced new drugs last year at prices 35% higher than in 2022, notably attributed to the industry’s focus on costly therapies for rare diseases such as muscular dystrophy.

The median annual list price for a newly launched drug in 2023 reached $300,000, marking a substantial increase from $222,000 in the previous year, according to a Reuters analysis. 

This stark rise follows a steady climb from the 2021 median price of $180,000, emphasizing a persistent upward trajectory in drug pricing.

Among the 47 medications examined, the most expensive drug for consistent use was Regeneron Pharmaceuticals Inc’s (NASDAQ:REGN) Veopoz for CHAPLE disease, a rare inherited condition affecting fewer than 100 individuals globally. 

Veopoz has an annual cost of $1.8 million, addressing the overactive immune system associated with this condition.

Gene therapies, which are one-time treatments, range in price from $2.2 million for sickle cell disease treatment Casgevy from Vertex Pharmaceuticals Inc (NASDAQ:VRTX) and CRISPR Therapeutics AG (NASDAQ:CRSP), to $3.2 million for Sarepta Therapeutics Inc’s (NASDAQ:SRPT) muscular dystrophy therapy Elevydis.

Over half of the FDA-approved drugs in 2023 and 2022 targeted orphan diseases, impacting fewer than 200,000 Americans. 

This shift represents a slight increase from the 49% observed in the preceding five years, indicating a growing focus on specialized treatments. 

However, concerns arise as some of these drugs may not become lucrative in the market.

Citing Dan Ollendorf, Chief Scientific Officer at the Institute for Clinical and Economic Review (ICER), Reuters noted concern over escalating drug prices without apparent rationale. 

Ollendorf highlighted the lack of clear pricing strategies, especially for rare disease and cancer drugs, where prices seem detached from the drugs’ actual benefits, leveraging manufacturers’ negotiating power due to limited alternatives.

In 2023, the FDA approved 55 novel drugs, a significant increase from the 37 approved in 2022. The analysis excluded vaccines, intermittent drugs like Pfizer’s COVID-19 antiviral Paxlovid, and drugs not yet commercially launched. 

The highest annual drug price reached an astonishing $1.8 million, while the lowest was $576 for the diabetes drug Brenzavvy.

TheracosBio’s CEO, Brian Connelly, aims to challenge the conventional drug contracting model with Brenzavvy, a diabetes medication sold at a significantly lower price than competitors. 

While ICER’s Ollendorf is cautious about the success of this strategy, Connelly remains optimistic, citing increasing sales without divulging specific details.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo by Christina Victoria Craft on Unsplash

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