. "6 Coverage and Reimbursement: Incentives and Disincentives for Product Development." Rare Diseases and Orphan Products: Accelerating Research and Development. Washington, DC: The National Academies Press, 2011.
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Rare Diseases and Orphan Products: Accelerating Research and Development
assistance programs for several medical product companies in connection with at least one of their products (information available at http://www.rarediseases.org/programs/medication). It also has several other programs of assistance for a number of mostly rare conditions, including infantile spasms, Hunter syndrome, and paroxysmal nocturnal hemoglobinuria.
In addition to company programs, advocacy groups for rare diseases and other nonprofit programs may assist some patients and families who lack insurance or cannot afford the cost sharing requirements of their health plan. The smaller the group, the more difficult it is likely to be for it to provide assistance. Another option for some individuals is the Patient Advocate Foundation Co-Pay Relief Program (http://www.copays.org/). It offers financial support to qualified insured patients, including Medicare Part D beneficiaries, who are being treated for one of 21 conditions, a few of which (e.g., pancreatic cancer and multiple myeloma) are rare.
Some families themselves or their relatives and friends create fund-raising efforts, for example, to raise enough money for a transplant or to help with costs for a child being treated for a brain tumor. It is doubtful that these kinds of activities factor into company decisions about product development.
In the future, an expansion of access to health insurance and the removal of certain limitations on coverage may reduce but are unlikely to eliminate the role of company assistance programs. Some individuals will remain uninsured, and some of those with insurance will continue to have difficulty with out-of-pocket payments.
PUBLIC AND PRIVATE HEALTH PLAN COVERAGEOF CERTAIN COSTS IN CLINICAL TRIALS
In some cases, health plans may cover certain costs of care for patients involved in clinical trials, thus reducing the burden on participants in the trial and potentially easing recruitment challenges for sponsors, including sponsors of trials of orphan drugs. The legislation that created Medicare provided generally that payment was to be limited to items or services that were “reasonable and necessary” for the diagnosis and treatment of illness or injury or to improve the functioning of a malformed body member” (42 USC 1395y). Historically, those administering the Medicare program interpreted the terms “reasonable and necessary” to mean that a service or item must be safe and effective, medically necessary and appropriate, and not experimental in order to qualify for reimbursement. Medicare coverage was typically denied for drugs or devices being studied under an investigational device exemption (see Chapter 7) or an investigational new drug application (see Chapter 3) that had not yet been approved or cleared by FDA.
Based on directives in an Executive Memorandum in 2000, Medicare