As more rare disease therapies launch, their prices are rising

Therapies that treat rare diseases are among the most expensive treatments for patients, with price tags often reaching seven figures.

Despite their high price, the treatments are usually lucrative for the pharma and biotechs that market them given they may be the only drug option for a patient and could potentially be lifesaving.

The enormous cost is a result of the relatively small population -- sometimes less than 10,000 patients -- many rare disease therapies treat. Pharmas and biotechs need to recoup the immense R&D costs that go into bringing a new therapy to market -- and also make a profit.

Research indicates that treatments for rare disease conditions related to metabolism, immunology, and hepatology are the most expensive.

The most expensive medicine in the world, Lenmeldy (atidarsagene autotemcel), was just approved in March and comes with a wholesale price of $4.25M. The gene therapy from Orchard Therapeutics (recently acquired by Japanese pharma Kyowa Kirin), given just once, treats metachromatic leukodystrophy. About 40 children in the U.S. each year are born with the genetic disorder.

A new analysis from Cantor Fitzgerald found that the already sky high prices of rare disease treatments have been increasing since 2021. Therapies that benefit less than 10,000 patients have a mean cost of ~$3.2M. The figure for rare disease therapies helping more than 10,000 patients is ~$2M.

The analysis noted that since prices, especially for one-time gene therapies, have been rising year-over-year, "investors should consider what other gene therapies have recently priced at and assume a higher level than previous years."

The investment firm also notes that rare disease medications that are considered chronic therapies -- given more than once -- can easily cost $500,000 or more per year. This is mostly the case if the patient population is less than 1,000. In addition, pricing is negatively impacted if there is competition for a therapy.

Cantor Fitzgerald also noted that a rare disease condition's lethality also influences its price. "Childhood lethal indications could support annual pricing of ~$600K+ (potentially $1M+), and pricing for adult lethal indications could be ~two-thirds the price of childhood lethal indications."

Selected pharmas and biotechs focused on rare diseases: Ultragenyx Pharmaceuticals (NASDAQ:RARE), Sarepta Therapeutics (NASDAQ:SRPT), Inhibrx (NASDAQ:INBX), Arcturus Therapeutics (NASDAQ:ARCT), Amicus Therapeutics (FOLD), Travere Therapeutics (TVTX).

Selected large pharmas and biotech with rare disease assets: Merck (MRK), Pfizer (PFE), Eli Lilly (LLY), Bristol-Myers Squibb (BMY), Roche (OTCQX:RHHBY), Biogen (BIIB), and Amgen (AMGN).