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Health Care Analysis
Published in: Health Care Analysis 1/2017

Open Access 01-03-2017 | Original Article

The (Ir)relevance of Group Size in Health Care Priority Setting: A Reply to Juth

Authors: Lars Sandman, Erik Gustavsson

Published in: Health Care Analysis | Issue 1/2017

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Abstract

How to handle orphan drugs for rare diseases is a pressing problem in current health-care. Due to the group size of patients affecting the cost of treatment, they risk being disadvantaged in relation to existing cost-effectiveness thresholds. In an article by Niklas Juth it has been argued that it is irrelevant to take indirectly operative factors like group size into account since such a compensation would risk discounting the use of cost, a relevant factor, altogether. In this article we analyze Juth’s argument and observe that we already do compensate for indirectly operative factors, both outside and within cost-effectiveness evaluations, for formal equality reasons. Based on this we argue that we have reason to set cost-effectiveness thresholds to integrate equity concerns also including formal equality considerations. We find no reason not to compensate for group size to the extent we already compensate for other factors. Moreover, groups size implying a systematic disadvantage also on a global scale, i.e. taking different aspects of the health condition of patients suffering from rare diseases into account, will provide strong reason for why group size is indeed relevant to compensate for (if anything).
Footnotes
1
Even if it is difficult to get a clear picture of the development cost for different drugs, it is often argued that the cost of developing a specific drug is approximately in the same cost range regardless of whether we are looking at orphan or non-orphan drugs [1]. Also, adaptations of the regulatory system and special funding for orphan drugs are in place to enable the development of such drugs and thus even out differences in development cost [3]. What will mainly affect the cost per patient of orphan drugs are hence the profit margins of the pharmaceutical company, and the size of the patient group. In a value based pricing system where the cost of treatment is supposed to reflect the value society places on the treatment, the pharmaceutical industry will somewhat adjust their profit margins to fit this value in order to get access to the market [5].
 
2
Henceforth we will employ the term orphan drugs in order to denote pharmaceuticals targeting rare diseases, well aware that this is sometimes used as a more technical term for drugs having a special license within a specific health-care system and also that there are distinctions between orphan and ultra-orphan drugs. However, in this principled argument, orphan drugs functions well as an overall term for pharmaceuticals for small patient groups (without exactly defining the limitations for being a small group).
 
3
Given that pharmaceuticals are developed by companies acting within a market economy, and that the cost for developing orphan drugs are generally the same as for any other drug, these companies could be given a number of incentives, not only to motivate them to take the risk of investing in the development of orphan drugs but also to be able to make a reasonable profit given the small number of patients. This may be one route to lower costs (and thereby better cost-effectiveness) for orphan drugs.
 
4
A problem with orphan drugs is that it might be difficult to provide strong evidence for reasonable effect. In this context we will ignore this problem, however it has been argued that over time it is possible to collect fairly strong evidence [12]. Moreover, accepting a higher cost-effectiveness threshold can be associated with conditions where the drug is set out unless proven effect during a certain period of time.
 
5
It might be questioned whether it is only the factors presented by Juth (i.e. severity of condition, effect and cost-effectiveness) that are directly operative and relevant. See for example the WHO-initiative on identifying relevant factors for priority setting apart from cost-effectiveness [13]. However, we will not explore that line of criticism but simply accept Juth’s claim about what is and what is not directly operative relevant factors.
 
6
Note that many of the indirectly operating factors on Juth’s list will influence whether or not there will be treatment at all for a health condition. Since such a broad understanding of indirect operative factors risk taking the discussion too far into problems of research funding and the relationship between research and actual treatment, we will concentrate on treatment already available on the market (or to the health-care system) (thereby also following Juth).
 
7
It could perhaps be the case that researchers through genetic engineering have produced a specific rare disease, a farfetched case that will be ignored in the following.
 
8
We do however realize that profit margins is the problem in relation to some orphan drugs.
 
9
Personal message, referring to internal working documents by Douglas Lundin, chief economist at the agency.
 
10
Joar Björk has made us aware of another such indirect operative factor that could provide a systematic disadvantage, having a disease that needs a biological drug. Within the current system and given the state of present medical science, biological drugs are more expensive to produce than synthetic drugs. Maybe this will change with continued development of medical science, and hence will become less of a systematic disadvantage in the future. But, until then, this may be another indirect operative factor that needs to be taken into account when assessing the degree of compensation to fulfil the equal treatment principle.
 
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Metadata
Title
The (Ir)relevance of Group Size in Health Care Priority Setting: A Reply to Juth
Authors
Lars Sandman
Erik Gustavsson
Publication date
01-03-2017
Publisher
Springer US
Published in
Health Care Analysis / Issue 1/2017
Print ISSN: 1065-3058
Electronic ISSN: 1573-3394
DOI
https://doi.org/10.1007/s10728-016-0333-3

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