The Burden of Rare Diseases: An Economic Evaluation
Pedro Andreu, PhD; Jenny Karam, PharmD; Caroline Child, BSc; Giacomo Chiesi, MBA; Gina Cioffi, JD

Understanding the cost drivers and economic impact that a lack of available treatments poses for people
living with rare diseases is critical for highlighting the unmet needs of the community and how thoseneeds may be addressed. Chiesi Global Rare Diseases, with support from IQVIA, set out to study the
direct, indirect, and mortality-related costs for a sample of 24 rare diseases across five therapeutic areas
to evaluate the burden of care when treatment is available versus when no treatment exists, and tocompare these costs to common mass market diseases. The resulting report provides a benchmark forcost disparities and assesses how the burden of rare diseases is impacted by treatment availability.
Key findings from the study
Rare diseases impose a substantial economic burden that is reduced by treatment availability.

• The burden of rare diseases is approximately 10x higher than mass market diseases on a per patient per year
(PPPY) basis.

• A lack of treatment for a rare disease is associated with a 21.2% increase in total costs PPPY.
• The cost for 8.4 million patients in the U.S. impacted by 373 rare diseases considered in this analysis is estimated to be $2.2 trillion per year.

• Based on this estimate, the societal responsibility for all known rare diseases may be in the range of $7.2 trillion
to $8.6 trillion per year.
Investment in diagnostic tools, newborn screening, and development of new therapies is justified.

• Empirical studies need to consider many aspects of healthcare costs to gain a full picture of the overall burdenof rare diseases.

• Access to therapies for people living with rare diseases generates significant value for society.
Rare diseases overview
Rare diseases present a societal concern due to difficulties and delays in diagnosis, a lack of treatment availability,
difficulty in developing new treatments and the need for favorable regulatory and access conditions. In the U.S.,
rare diseases are defined as those affecting fewer than 200,000 people.1 It is estimated that approximately 30
million people in the U.S., half of them children, are affected by more than 7,000 rare diseases.2 As many as 95%
of rare diseases have no specific treatment or curative options. A lack of information on the natural progressionof these diseases results in a lack of effective treatments.3,4 Scarcity of data and disease complexity mean the full
extent of the patient, family, and social burden of rare diseases will likely remain undocumented.

Building a database of priority therapeutic areas
We generated a database of 373 rare diseases covering approximately 8.4 million patients in the United States toserve as the basis for this analysis. The rare diseases were selected following a review of more than 500 publishedarticles and lists from sources including Orphanet, the Genetic and Rare Diseases Information Center, the National
Organization for Rare Diseases (NORD), and the National Institutes of Health. The selections were discussed with
IQVIA experts, several patient advocacy groups including the EveryLife Foundation for Rare Diseases and Global
Genes, and therapy area experts from 15 international institutions.
Next, we discussed with physicians and experts to identify top priority therapeutic areas among rare diseases.
This focused our research to metabolic, neurological, congenital, hematological, and immunological rare diseases
encompassing 227 well-documented rare diseases. Further discussions with patient advocacy groups andphysicians led to the selection of the 24 most relevant rare diseases in the priority therapeutic areas based on
several criteria, including the degree of unmet need, relative importance to patient advocacy groups, interest in
the scientific community, prevalence, and apparent burden of disease. Together these 24 rare diseases impact
approximately 584,000 people in the U.S.

Accuracy/specificity

Scalability/patient numbers

Overview of process to determine rare disease burdenLong list of 373 rare diseases:~8.4 million patients

Based on reviewing the published literature and relevant
databases and discussion of findings with therapeuticarea experts

Extended list of 227 rare diseases:~4.1 million patients

Included diseases that fell into the 5 most relevant therapeuticareas (metabolic, hematological, immunological, congenital, andneurological diseases) based on expert feedback

Short list of 149 rare diseases:~3.9 million patients

Comprised of approximately 30 prioritized diseases per therapeuticarea based on availability of data in the literature and:• prevalence (to include rare and ultra-rare designations)• degree of unmet need• degree of validation by therapeutic area experts

24 rare diseasesa selected fordeep-dive analyses:~584 000 patients

Final selections based on the shortlisting criteria followedby re-validation by therapeutic area experts

Direct, indirect,
and mortality
cost calculation

The Burden of Rare Diseases: An Economic Evaluation

Directional extrapolation of burden to generate
overall rare disease cost burden2Selected rare diseases across therapeutic areas
MetabolicdisordersHematologic
disorders

ImmunologicaldisordersCongenital
disorders• Fabry disease• Acquired aplastic anemia• Autoimmune encephalitis• Angelman syndrome• Gaucher disease type I• Acute intermittent porphyria• Common variable immune
deficiency• Christianson syndrome• Mucopolysaccharidosis(Hunter, Hurler)• Atypical hemolytic uremic
syndrome• Juvenile idiopathic arthritis• Ornithine transcarbamylase
deficiency• Beta thalassemia major• Myasthenia gravis• Early onset familial
Alzheimer’s disease• Sickle cell disease• Pemphigus vulgaris• Spinal muscular atrophy
type I (proximal)• Deletion 5p• Fragile X syndrome• Phenylketonuria

Neurologicaldisorders• Amyotrophic lateralsclerosis• Ataxia telangiectasia• Duchenne muscular
dystrophy

Evaluating healthcare costs
Costs of care associated with the selected 24 rare diseases were explored with published data, patient advocacy
groups, key opinion leaders, and data from the U.S. Bureau of Labor Statistics and Medi-Span Price Rx. The overall
cost burden was evaluated across three categories:• Direct costs including the cost of treatment, medical procedures, hospitalizations, physician visits, homehealthcare, and other medical costs.

• Indirect costs including patient and caregiver productivity loss, work loss, home changes, traveling and accommodation for medical visits.

• Mortality costs based on value of statistical life (VSL) and the difference between average life expectancy andthat for people with a rare disease.
Estimates of the total cost burden associated with 24 chronic mass-market diseases (including diabetes, cardiovascular, Alzheimer’s disease, arthritis and back pain, cancers, and others) were used for the purpose of benchmark
comparisons with the rare disease burden.5 Data on direct and indirect costs were obtained from the 2018 Milken
Institute report on the cost of chronic conditions, and mortality costs were estimated using VSL, as for the calculation of mortality costs for rare diseases.
Cost sources included in this analysis
Direct costs

Indirect costs

Mortality costs• Prescription drugs• Productivity cost: patient & caregiver• Medical products• Work loss

• Hospitalization: inpatient• Home changes• Value of statistical life ($130,000 per
year; $10.3 million for 79-year average
lifespan in the U.S.)• Hospitalization: outpatient• Cost of secondary treatments• Home healthcare• Traveling & accommodation• Professional services (e.g., nurse visit)• Administration

The Burden of Rare Diseases: An Economic Evaluation3

Results of the analysis
This study revealed that for 24 rare diseases selected for a deep-dive analysis the total cost to society is approximately $125 billion with an overall economic burden PPPY ranging from $121,000 to $334,000 (average overall
cost of $266,000 PPPY), which is approximately 10x the cost associated with mass market diseases ($26,000
PPPY). Overall, burden was generally driven by direct and mortality costs. Indirect costs, while substantial,
represent the smallest proportion of cost burden for rare diseases. The overall burden was highest for metabolic($334,000 PPPY) and neurological disorders ($317,000 PPPY).
Average burden of rare disease therapeutic areas PPPY across 24 rare diseases
Weighted
average total
cost (k$):

Direct cost (including treatment & other direct costs)
287

Indirect cost

228

334

317

Mortality cost
213

121

26
26%

29%
47%

51%
74%

28%

62%

71%

10%

61%

43%

18%

4%

16%

ol
un

ol

Ma

e

13%

MM diseases included diabetes,
cardiovascular, Alzheimer’s
disease, arthritis and back pain,
cancers and others.

a

Im

m

em

ag

y
og

y
og

ol

N

H

eu

M

ro

et

at

gi
lo

ab

ca

l

ic

l
ta
ni
ge
on
C
Number ofpatients:
Number ofrare diseases:

19%

13%

M

22%
9%

er

39%

Av

43%

Mean total costs based on aweighted average (by number ofpatients) of the top five diseases
across neurological, metabolic,hematology and immunology
diseases, top four congenital
diseases and 24 comparator MM
diseases. Column widths areweighted based on the average
total cost per group.

103k

62k

36

159k

224k

–

133M

4

5

5

5

5

–

24

A scenario analysis was conducted to assess the average cost if treatments were not available and found that alack of treatment was associated with a 21.2% increase in total costs PPPY. The percentage increases ranged
from a 2.2% increase for congenital diseases to 51.8% for metabolic diseases.

• Direct costs: $63,000 PPPY with treatment vs. $118,000 PPPY without treatment• Indirect costs: $40,000 PPPY with treatment vs. $73,000 PPPY without treatment• Mortality costs: $36,000 PPPY with treatment vs. $49,000 PPPY without treatment
Importantly, across all the therapeutic areas assessed, access to treatment effectively shifts burden relating toindirect and mortality costs into direct costs (treatment and other direct costs). These costs are more likely to befinanced by private and public payers.
Value of treatment is further demonstrated by decreases in PPPY indirect costs. When no treatments were available,
the range for productivity loss was approximately $33,000 to $61,000 for patients and $25,000 to $61,000 for
caregivers, compared with approximately $3,000 to $22,000 for patients and $4,000 to $5,000 for caregivers whentreatments were available. These findings highlight that providing access to rare disease treatments generally generates substantial value for society because it lowers the associated economic burden on patients and caregivers.

The Burden of Rare Diseases: An Economic Evaluation

4

Burden of disease PPPY across rare diseases with and without treatment and value assessment

400

Indirect cost

Mortality

288

300

25

133
70
200

303
0
92

+15.9%

+2.2%
238
2

244
0

228

116

124

82

76

37
33

100

Bars show the average burden
PPPY (broken down by cost
driver) associated with TAs as
well as the average of selecteddiseases across the TAs.

+5.2%

236
334

104

104

82

107

+21.2%

2640+37.2%

120

120
0

0

87

72

9
50

68

240
0

167

124

198

0
121

201
131

0

Other direct cost

508
0

500

Societal burden PPPY (k$)

Treatment cost

+51.8%

600

59

98

59
28
19
15

63

Excludes spinal muscularatrophy because it was an
outlier in this space.

a

118

73

36

19

49

With
Without
With
Without
With
Without
With
Without
With
Without
With
Without
treatment treatment treatment treatment treatment treatment treatment treatment treatment treatment treatment treatment

Neurologicaldiseasesa

Metabolicdiseases

Congenital
diseasesb

Hematologicaldiseases

Immunologicaldiseases

From the selected top diseases
in congenital TA; Christianson
and Deletion 5P were excluded
because no treatment exists
for these diseases; hence, nodifference in cost magnitude.

b

40

50

Selected top
diseases across
5 TAsa,b

When these results were extrapolated to 227 rare diseases belonging to the five priority therapeutic areas, similar
results were obtained. The average cost of rare diseases was again approximately 10x higher than for mass market
diseases. If extrapolated again to the total of 8.4 million people in the U.S. impacted by the 373 rare diseases in thisanalysis, the overall cost of rare diseases in the U.S. is estimated to be $2.2 trillion per year compared with $3.4
trillion per year for 133 million patients with mass market diseases.
Extrapolated average burden of rare disease therapeutic areas PPPY across 227 rare diseases
Weighted
average total
cost (k$):

Direct cost (including treatment & other direct costs)
602

412

21%

23%

Indirect cost
187

224

26
26%

47%
19%

Mortality cost
266

69

44%

55%

24%

78%
15%

10%

61%

12%
60%

53%

43%

4%

42%

33%

Mb

ag
er

M

e

y
Av

Spinal muscular atrophy was
excluded from the weighted
average of representative disease
to determine the average % of
direct and indirect costs because
it is an outlier, since it has acurative treatment.

aMM diseases included diabetes,
cardiovascular, Alzheimer’s
disease, arthritis and back pain,
cancers, and others.

b

Im

em
H

m

at

un

ol

ol

og

og

y

ic
ol
ab
et
M

13%

N

Number ofpatients:
Number of
diseases:

eu

C

ro

on

lo

gi

ge

ni

ca

ta

l

la

18%

Mean total costs based on aweighted average (by numberof patients) of the 227 included
diseases across neurological,
metabolic, hematology, immunology, and congenital TAs and
24 comparator MM diseases.

780k

855k

372k

399k

1.71M

–

133M

41

41

86

23

36

–

24

These overall findings may represent an underestimate because social costs (including impact on health-related
quality of life) were not part of this analysis. A previous systematic literature review of qualitative researchsuggested that living with a rare disease is associated with a substantial psychological and social impact. Theseobservations highlight the need to consider as many aspects of healthcare costs as possible to gain a full picture of
the overall burden of rare diseases.

The Burden of Rare Diseases: An Economic Evaluation5

An economic tool for further analysis of the impact of rare diseases
A major strength of this study is that it presents an economic tool for analysis of the positive impact of rare disease
treatments. It also provides scenarios so that policymakers can understand the benefit of investing in innovationand policy reforms to accelerate the availability of, and access to, rare disease treatments.
These results highlight the need for policymakers to nurture and sustain innovation based on the positive economic
return from rare disease therapies and justify an increased governmental investment in diagnosis and newborn
screening to ensure wider patient access to therapies. Incentives for drug development, particularly restoring theOrphan Drug Tax Credit to 50% and maintaining its current applicability to multi-indications, encourage investment
and have led to progress in rare disease drug approvals.
These findings also support other reports that show the substantial economic burden that rare diseases represent
in the US.6,7,8,9,10 Economic burden remains high even when treatments are made available, but the cost composition
shifts towards medical care and away from indirect and mortality costs. To the extent that new treatments provide
clinical benefit for patients and their families, these shifts in burden are likely productive. These findings support theview that the development of safe and effective treatments for rare diseases generates substantial value for society.
Policy makers must recognize the distinct characteristics of developing and commercializing rare disease treatments and that the value assessment for rare disease treatments greatly differ from mass market diseases.11,12 Policychanges should be specific to the unique nature of rare disease drug development. Emphasis on a patient centric
approach, accelerated progress in diagnostic methods for early treatment, as well as promoting an ecosystemproviding incentives and supporting the development of rare disease treatment options should be consideredby lawmakers.

Authors and funding
Pedro Andreu, Jenny Karam and Caroline Child are employees of IQVIA, which received consulting fees from Chiesi
Global Rare Diseases for this analysis. Giacomo Chiesi and Gina Cioffi are full-time employees of Chiesi Global Rare
Diseases.

Acknowledgments
The authors acknowledge Meena Kathiresan, PhD, Rena M. Conti, PhD, and Tikunesh Mengestu, MBA, for providing
critical insights on the manuscript and Max Rubin for providing critical insights during the execution of the project.
The authors also acknowledge medical writing assistance from John Findlay, PhD, of PharmaGenesis Oxford
Central, Oxford, UK, which was funded by Chiesi Global Rare Diseases.

The Burden of Rare Diseases: An Economic Evaluation

6

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