Pharmaceutical list prices often differ from what health systems actually pay. The presence of confidential discounts like rebates or managed entry agreements adds complexity, making it difficult to accurately gauge net prices. Orphan drugs (ODs) typically carry high price tags, yet their actual prices lack transparency. A thorough understanding of gross-to-net pricing dynamics is essential for stakeholders to effectively navigate from list to net prices.
In order to better understand the factors driving confidential discounts for non-oncological ODs* and estimate net prices, we interviewed 2 payer experts from each of the following markets: US, Germany, France, Italy, and Spain. The confidential discount estimates from payers were then applied to list prices to reach estimated net prices.Â
Variation in the List Price Across Countries
Between January 2017 and June 2023, the European Commission granted a marketing authorization to 68 non-oncological ODs. Among these, 17 ODs had publicly available list prices across both the EU4 and the US. These prices exhibited an annual average range from €250,757 in France to €429,160 in the US (Figure 1).
Factors Influencing Confidential Discounts: Insights from Payer Experts
Interviews with payer experts from each market revealed that competition plays a pivotal role in driving confidential discounts. Although clinical differentiation and budget impact could also influence these discounts, payers noted that these factors might have less impact in driving confidential discounts, especially in France, Italy, and Spain. Â
Respondents indicated that the level of discounts could be significantly higher when one or two competing drugs are available. The estimated discounts noted by the experts for with and without competition were as follows: -20% versus 0% in the US, -18% versus 0% in Germany, -20% versus -10% in France, -25% versus 0% in Italy, and -25% versus 0% in Spain. These discounts exclude any mandatory discounts in these countries.Â
Effect of Competition on Net Prices of Orphan Drugs
The application of confidential discounts from primary research to formal list prices resulted in higher net prices for ODs launched without competition compared to those launched with competition, showing a difference ranging from 98% to 226% across the markets (Figure 2). The standard deviation among the net prices with competition is lower than the standard deviation among the net prices without competition. Â
ODs that enter the market with competition tend to have lower net prices compared to those launching without competition. This is primarily due to their lower list prices and higher discount levels. Stakeholders commercializing orphan drugs can leverage these insights to fine-tune their gross-to-net pricing strategies.
* Oncology products were excluded, as they are typically launched in specific patient subgroups with limited disease heterogeneity, which hampers proper estimation of discounts.
This blog is based on the poster Factors Influencing Orphan Drug Net Prices in the EU4 and US – Insights from Payers, presented during ISPOR Europe in Copenhagen, in November 2023.Â