Economic Evaluation and Policy Strategies for Rare Diseases: A Modern HEOR Perspective

Mayta
Jun 4
4 min read

Updated: Jun 6

Introduction

Rare diseases, despite affecting small patient populations, pose large-scale challenges for healthcare systems due to diagnostic uncertainty, high treatment costs, and limited clinical evidence. Economic evaluations in this space must navigate unique complexities, from flexible pricing mechanisms to non-traditional value frameworks. As health systems strive to provide equitable access while maintaining sustainability, Health Economic and Outcomes Research (HEOR) becomes a vital tool to guide pricing, reimbursement, and innovation policy around rare conditions.

This article explores how HEOR principles are adapted to rare diseases, how countries evaluate such therapies, and which innovative strategies are emerging to balance affordability with access.

I. Foundations of HEOR in Rare Disease Context

1. Core Definitions

Health Economics studies the allocation of healthcare resources, focusing on both costs (inputs) and outcomes (consequences).
Outcomes Research investigates the effects of interventions on clinical endpoints (e.g., survival), humanistic outcomes (e.g., quality of life), and economic outputs (e.g., cost savings).

Together, HEOR supports value-based healthcare decision-making, especially critical in resource-constrained settings.

2. Relevance to Rare Diseases

Rare diseases often feature:

Limited clinical trials due to small sample sizes.
High unit costs for treatments.
High emotional, societal, and ethical stakes.

This forces a shift from traditional cost-effectiveness paradigms to broader, more adaptive value assessments.

II. Global HEOR Trends and Their Implications

From 2018 to 2020, the HEOR landscape evolved to include:

Real-World Evidence (RWE): Vital when RCT data are sparse or unavailable.
Novel Curative Therapies: Emerging gene and cell-based treatments promise life-altering outcomes but at extremely high prices.
Value-Based Alternative Payment Models (VBAPMs): Financing models designed to manage affordability while rewarding innovation.
Universal Health Coverage & Equity Focus: Rare disease access is increasingly framed as a justice issue, not just an economic question.

These trends underscore the rising pressure to deliver cost-sensitive yet equitable solutions in the rare disease arena.

III. The Economic Dilemma of Rare Disease Treatments

1. Cost vs Value Conundrum

Treatments for rare conditions frequently exceed traditional Incremental Cost-Effectiveness Ratio (ICER) thresholds due to:

High R&D costs amortized over small populations.
Absence of price competition.
Complex manufacturing or logistics (e.g., biologics, gene therapy).

Yet these therapies often offer dramatic improvements in survival, function, and quality of life, leading policymakers to ask: How do we define value beyond ICER?

2. Adjusted Evaluation Frameworks

Some countries adjust ICER thresholds or apply modified evaluation criteria:

UK’s NICE uses a £100,000 per QALY threshold for highly specialized technologies (HST) versus the standard £20,000–30,000.
France and Turkey exempt rare disease drugs from strict cost-effectiveness analyses, favoring societal value and budget impact.
Thailand includes ethical considerations and revised HTA guidelines to assess rare disease therapies.

IV. Challenges to Conventional HTA in Rare Disease

Economic evaluation for rare conditions is hindered by:

Limited clinical evidence (small or single-arm studies).
Lack of validated quality-of-life measures.
Difficulty in estimating true population prevalence.
Fixed or inflexible ICER thresholds that undervalue transformative treatments.

Therefore, new appraisal systems are needed—ones that incorporate equity, unmet need, and innovation incentives.

V. Adaptive Policy Tools: Managed Entry Agreements (MEAs)

1. Definition and Purpose

MEAs are structured agreements between payers and manufacturers that allow access to high-cost therapies under specific conditions. They aim to:

Reduce uncertainty in clinical performance or budget impact.
Delay full reimbursement until more evidence is gathered.
Protect budgets while preserving access.

2. Types of MEAs

Type	Mechanism	Example
Financial-based	Price caps, discounts, patient/cost capping	Ranibizumab capped at 14 injections in the UK
Performance-based	Payment linked to outcomes or coverage with evidence	Outcome guarantees in oncology or rare metabolic diseases
Hybrid	Combines financial + performance components	Utilization-based reimbursement for hepatocellular carcinoma drugs

Most MEAs globally are financial in nature, with oncology as the dominant therapeutic area.

3. Thai Experience

Thailand’s implementation includes:

Patient capping for drugs like Imiglucerase.
Utilization-linked coverage for cancer drugs (e.g., support beyond 4–10 months).
Co-payment models for dialysis and medical devices.These reflect a pragmatic adaptation of MEAs within national reimbursement constraints.

VI. Evaluating Rare Disease Value Beyond ICER

1. Societal and Ethical Dimensions

Rare diseases disproportionately affect vulnerable groups and often carry high emotional, familial, and social burdens. Value assessments should include:

Disease severity
Availability of alternatives
Impact on caregivers and productivity
Equity and access imperatives

2. Multi-Criteria Decision Analysis (MCDA)

To reflect broader values, some countries (e.g., Poland) use MCDA to integrate clinical benefit, equity, innovation, and budget impact into a composite score that guides reimbursement.

VII. Future Directions for Thailand and LMICs

To optimize access while ensuring fiscal sustainability, Thailand and similar countries are moving toward:

Incorporating real-world data into HTA—especially critical for long-term monitoring of rare disease outcomes.
Expanding MEA frameworks—balancing risk and affordability through adaptive contracts.
Embedding ethical, clinical, and social factors into national reimbursement decisions, moving beyond strict ICER-only models.

Conclusion

Economic evaluation for rare diseases must go beyond traditional cost-effectiveness models to accommodate the ethical, clinical, and fiscal realities of managing high-cost therapies for small populations. By integrating flexible payment models, real-world evidence, and adjusted evaluation criteria, HEOR can help unlock access to transformative treatments while preserving the sustainability of health systems.

Key Takeaways

Rare disease treatments challenge conventional ICER logic due to high costs and limited evidence.
Many countries adopt adjusted thresholds, MEAs, or societal weighting to inform rare disease coverage.
Financial and performance-based MEAs are increasingly used to de-risk payer investment while allowing early access.
Thailand uses tailored HTA and financial cap models to manage rare disease drug inclusion under universal health coverage.
Future policy should emphasize data generation, equity, and innovation support as core pillars of HEOR for rare diseases.