1. 1 The Budget Impact of Drugs Treating Rare Diseases in Canada: A 2007-2013 MIDAS Sales Data Analysis April 14, 2015 Oral Presentation at the 2015 CADTH Symposium; Concurrent Session D1, 10:15 – 11:45 Victoria Divino 1, Mitch DeKoven, MHSA 1, Tony Kim, MA 2, Michael Kleinrock, MA 1, Rolin L. Wade, RPh,MS 1 and Satyin Kaura, MSci, MBA 3 1 IMS Health, Fairfax, VA USA; 2 Celgene, Mississauga, ON, Canada; 3 Celgene, Summit, NJ USA

2. 2 Study Background Orphan drugs treat rare diseases that affect a very small number of persons (~5 in 10,000 persons). An estimated 1 in 12 Canadians, approximately 3M or 9% of Canadians suffer from a rare disease. 1 There is currently no official “orphan disease” status in Canada; Health Canada announced in 2012 the development of a modern orphan drug framework for Canada. Orphan drug policies in other countries have dramatically increased the development and approval of orphan drugs, such as the Orphan Drug Act (ODA) of 1983 in the US Little evidence/data has been generated as to the actual burden of orphan drug expenditures in Canada. Background Budget Impact of Drugs Treating Rare Diseases in Canada, Presentation at the 2015 CADTH Symposium 1. http://www.rarediseasefoundation.org/abouthttp://www.rarediseasefoundation.org/about

3. 3 Study Objectives  To measure the total annual expenditures on branded orphan drugs between 2007-2013 in Canada. The specific objectives were: To estimate total orphan drug expenditures in Canada from 2007-2013 and to evaluate total orphan drug expenditures as a proportion of total pharmaceutical expenditures. To evaluate future orphan drug expenditures (2014- 2018) and as a proportion of total future pharmaceutical expenditures. Objectives Budget Impact of Drugs Treating Rare Diseases in Canada, Presentation at the 2015 CADTH Symposium

4. 4 Methods Branded drugs approved by the FDA and granted orphan status between 1983 and 2013 in the US (N=356) were used as a proxy for the orphan drug landscape in Canada. 82% of the 356 were “orphan only” and 18% “partial orphans.” The analysis only considered those products which received approval in Canada, and for which the US orphan indication(s) was also approved. The IMS Health MIDAS database of audited biopharmaceutical sales volume was used to assess 2007- 2013 orphan drug and total drug expenditures in Canada. Expenditures for partial orphans (both orphan and non- orphan indications) were adjusted. In-depth research was conducted to determine a ‘disease factor’ to apply to consider orphan indication sales only. Methods Budget Impact of Drugs Treating Rare Diseases in Canada, Presentation at the 2015 CADTH Symposium

5. 5 Analyses Total expenditures for the branded orphan drugs, captured and measured in the MIDAS Canadian dataset, were calculated annually from 2007-2013. Orphan drug expenditures were further evaluated as a proportion of total annual 2007-2013 Canadian pharmaceutical drug expenditures sourced from MIDAS. Expenditures were recorded in Canadian Dollars (CAD) at the time of the sale, and adjusted to 2014 CAD using the Canadian Consumer Price Index. A future trend analysis estimated orphan drug sales from 2014-2018, and evaluated sales out of projected future total drug sales from IMS Health Market Prognosis forecasts. Analyses Budget Impact of Drugs Treating Rare Diseases in Canada, Presentation at the 2015 CADTH Symposium

6. 6 Results “Orphan Only” drugs = orphan drugs approved for a single orphan designation only or for multiple orphan only designations. “Partial Orphan” drugs = orphan drugs approved for both orphan and non-orphan indications, adjusted to include only orphan indication expenditures. Total Orphan drugs = (“Orphan Only” drugs + adjusted “Partial Orphan” drugs) Table 1. 2007-2013 Orphan Drugs Captured in IMS database 2007200820092010201120122013 # “Orphan only” drugs captured 70747379819199 # “Partial Orphan” drugs captured 25262728303134 # Total Orphan drugs captured 95100 107111122133 2007-2013 Orphan Drug Landscape in Canada Budget Impact of Drugs Treating Rare Diseases in Canada, Presentation at the 2015 CADTH Symposium

7. 7 Results Measure2007200820092010201120122013 “Orphan Only” Drug Expenditures ($M) 537.6586.7649.2692.6729.3786.8868.0 “Partial Orphan” Drug Expenditures ($M) 72.6 82.594.5125.5 151.2202.8232.0 Total Orphan Drug Expenditures ($M) 610.2669.2743.7818.1 880.5989.61,100.0 % “Orphan Only”/ Total Orphan 88.1%87.7%87.3%84.7%82.8%79.5%78.9% % “Partial Orphan”/ Total Orphan 11.9%12.3%12.7%15.3%17.2%20.5%21.1% Total pharmaceutical expenditure ($M) 18,233.619,598.120,514.420,628.619,976.319,746.019,665.7 % “Orphan Only”/ Total pharmaceutical expenditure 2.9%3.0%3.2%3.4%3.6%4.0%4.4% % “Partial Orphan”/ Total pharmaceutical expenditure 0.4% 0.6%0.8%1.0%1.2% % Total Orphan/ Total pharmaceutical expenditure 3.3%3.4%3.6%4.0%4.4%5.0%5.6% “Orphan Only” drugs = orphan drugs approved for a single orphan designation only or for multiple orphan only designations. “Partial Orphan” drugs = orphan drugs approved for both orphan and non-orphan indications, adjusted to include only orphan indication expenditures. Total Orphan drugs = (“Orphan Only” drugs + adjusted “Partial Orphan” drugs) Table 2. 2007-2013 “Orphan Only”, “Partial Only” and Total Orphan Drug Expenditures (2014 CAD) 2007-2013 Orphan Drug Expenditures Budget Impact of Drugs Treating Rare Diseases in Canada, Presentation at the 2015 CADTH Symposium

8. 8 Results Measure2007200820092010201120122013 “Orphan Only” Drug Expenditures ($M) 537.6586.7649.2692.6729.3786.8868.0 “Partial Orphan” Drug Expenditures ($M) 72.6 82.594.5125.5 151.2202.8232.0 Total Orphan Drug Expenditures ($M) 610.2669.2743.7818.1 880.5989.61,100.0 % “Orphan Only”/ Total Orphan 88.1%87.7%87.3%84.7%82.8%79.5%78.9% % “Partial Orphan”/ Total Orphan 11.9%12.3%12.7%15.3%17.2%20.5%21.1% Total pharmaceutical expenditure ($M) 18,233.619,598.120,514.420,628.619,976.319,746.019,665.7 % “Orphan Only”/ Total pharmaceutical expenditure 2.9%3.0%3.2%3.4%3.6%4.0%4.4% % “Partial Orphan”/ Total pharmaceutical expenditure 0.4% 0.6%0.8%1.0%1.2% % Total Orphan/ Total pharmaceutical expenditure 3.3%3.4%3.6%4.0%4.4%5.0%5.6% “Orphan Only” drugs = orphan drugs approved for a single orphan designation only or for multiple orphan only designations. “Partial Orphan” drugs = orphan drugs approved for both orphan and non-orphan indications, adjusted to include only orphan indication expenditures. Total Orphan drugs = (“Orphan Only” drugs + adjusted “Partial Orphan” drugs) Table 2. 2007-2013 “Orphan Only”, “Partial Only” and Total Orphan Drug Expenditures (2014 CAD) 2007-2013 Orphan Drug Expenditures Budget Impact of Drugs Treating Rare Diseases in Canada, Presentation at the 2015 CADTH Symposium

9. 9 Results $18.2B$19.6B$20.5B$20.6B$19.7B Figure 1. 2007-2013 Orphan Drug Expenditures Out Of Total Canadian Drug Expenditures (2014 CAD) “Orphan Only” drugs = orphan drugs approved for a single orphan designation only or for multiple orphan only designations. “Partial Orphan” drugs = orphan drugs approved for both orphan and non-orphan indications, adjusted to include only orphan indication expenditures. Total Orphan drugs = (“Orphan Only” drugs + adjusted “Partial Orphan” drugs) Total Pharmaceutical Expenditure ‘ ‘ ’ ’ Budget Impact of Drugs Treating Rare Diseases in Canada, Presentation at the 2015 CADTH Symposium $20.0B $16.0B $12.0B $8.0B $4.0B $0 $20.0B

10. 10 Results Oncology was the most common therapeutic class, with approx. 40% of orphan drugs identified with an orphan oncology indication $1,200.0M $1,000.0M $800.0M $600.0M $400.0M $200.0M $0 $610.2M$669.2M$743.7M$818.1M$989.6M$1,100.0M$880.5M Figure 2. 2007-2013 Orphan Drug Expenditures By Therapeutic Class (2014 CAD) Budget Impact of Drugs Treating Rare Diseases in Canada, Presentation at the 2015 CADTH Symposium Total Orphan Drug Expenditure

11. 11 Results Future trends (2014-2018) Budget Impact of Drugs Treating Rare Diseases in Canada, Presentation at the 2015 CADTH Symposium A linear trend line was created applying 2007-2013 sales to estimate orphan drug expenditures for 2014-2018.

12. 12 Results Future trends (2014-2018) Budget Impact of Drugs Treating Rare Diseases in Canada, Presentation at the 2015 CADTH Symposium Source: Total Canadian Pharmaceutical Sales estimated from MIDAS (2007-2013) & IMS Health Market Prognosis Forecast (2014-2018) Total Sales (CAD millions) Orphan drug expenditures for 2014-2018 are anticipated to grow, but will remain below 6% as a proportion of total Canadian pharmaceutical expenditures.

13. 13 Discussion While a select orphan drugs may have high costs, the population using these orphan drugs is small so total orphan drug expenditures, when considered out of total drug expenditures, is relatively small. For the analysis of “orphan only” drugs, expenditures represented 2.9-4.4% of 2007-2013 total Canadian pharmaceutical expenditure. Adjusted “partial orphan” drug sales, accounted for 0.4-1.2% of 2007-2013 total Canadian pharmaceutical expenditure Total orphan drug expenditures represented 3.3-5.6% of total Canadian drug expenditures, in 2007-2013. Future trend analysis suggests that while orphan drug expenditures in 2014-2018 will increase, growth is slowing down and will remain fairly stable as a proportion of total drug expenditures (below 6%). Budget Impact of Drugs Treating Rare Diseases in Canada, Presentation at the 2015 CADTH Symposium

14. 14 Discussion (continued) Discussion According to the Canadian Organization for Rare Disorders, an estimated 1 in 12 Canadians, approximately 3M or 9% of Canadians suffer from a rare disease. 1 Interestingly, expenditure on orphan drugs represents less than 6% of total pharmaceutical expenditures Overall, these results are consistent with analyses conducted in EU and US: EU: orphan drug expenditures represent 3-6% of total pharmaceutical expenditures in 2007-2013. US: orphan drug expenditures represent 5-9% of total US pharmaceutical expenditures. Future tend analysis suggest orphan drugs expenditures will remain fairly stable as a proportion of total pharmaceutical expenditures. Budget Impact of Drugs Treating Rare Diseases in Canada, Presentation at the 2015 CADTH Symposium 1. http://www.rarediseasefoundation.org/abouthttp://www.rarediseasefoundation.org/about

15. 15 Limitations There are a couple of limitations to note with this analysis. This cost analysis does not highlight or recognize the clinical value that orphan drugs provide to patients and society. IMS MIDAS database coverage is limited with respect to certain products and/or manufacturers. There is the potential for off-label use of orphan drugs. Limitations Budget Impact of Drugs Treating Rare Diseases in Canada, Presentation at the 2015 CADTH Symposium

16. 16 Conclusions The US Orphan Drug Act (ODA) led to an increase in the number of approved orphan drugs in the US, which led to an associated increase in the number of drugs for rare diseases in Canada. While associated orphan drug expenditures have increased, these drugs benefit many people with previously underserved rare conditions. The annual expenditures on orphan drugs are relatively small (3.3-5.6%) and have remained fairly stable relative to total pharmaceutical drug expenditures. Future trend analysis suggests growth is slowing down. Concerns that growth in orphan drug expenditures may lead to unsustainable drug expenditures do not appear to be justified. Conclusions Budget Impact of Drugs Treating Rare Diseases in Canada, Presentation at the 2015 CADTH Symposium

17. 17 Thank You