Catastrophic expenditure and impoverishment of patients affected by 7 rare diseases in China

Rare disease refers to the disease with low incidence which is hard to be diagnosed and treated [1]. Therapeutic drugs for rare diseases are often called orphan drugs. The standard of rare disease varies across countries [2]. Since 1980s, the legislation on rare diseases and polices towards orphan drugs have been gradually implemented in developed countries and regions [3].

Although China is actively promoting regulation of rare diseases, there is no legislation for rare disease up to now. Neither is registration system for rare diseases or official definition on rare disease [4]. In 2010, experts from Genetics Group of Chinese Medical Association put forward an unofficial standard for rare disease on Symposium on Definition of Rare Disease, which is genetic disease with prevalence rate lower than 1/500,000 in population or incidence rate lower than 1/10,000 in neonate. Current regulations only include incentive policies for registration and approval of orphan drugs. There are no detailed rules for development and pricing of orphan drugs. The nationwide reimbursement system for rare diseases has not been established [5]. With the rapid economic development, rare diseases are causing rising social concentration throughout the country. In January 2016, National Experts Committee of Diagnosis and Security of Rare Disease was set up under the leading of National Health and Family Planning Commission of People’s Republic of China. In February of the same year, Chinese Premier Li Keqiang proposed to promote the development and update of pharmaceutical industry at State Council executive meeting, emphasizing improving the industrial development of orphan drugs. It symbolised that rare disease and orphan drugs have been formally incorporated into the national planning.

The cost of diagnosis and treatment for rare disease is high, which may impoverish the patients and their families. Rare disease is not only a problem in health system but extends to social sphere. The design of legal system and policies of rare disease in China are far behind the need for pharmaceutical and social development. Therefore, it is of great social significance to explore the feasibility of establishing social security mechanism for rare diseases in China.

There have been some researches to investigate the medical insurance policies of rare diseases and orphan drugs in China, but few studies have been done to evaluate the affordability of rare disease patients in China [6]. Using Delphi method to select sampled rare diseases, our study assessed the affordability and providing suggestions of establishing social security mechanism for rare diseases.

Our study evaluated the affordability of medicines by the following three methods. Firstly, WHO and Health Action International (HAI) have proposed a standard survey tool that applies the Lowest Paid unskilled Government Worker (LPGW) [7]. Affordability is then expressed in terms of the number of days the LPGW has to work to afford a course of treatment. Secondly, the catastrophic approach, i.e. the payment for a commodity is deemed catastrophic (unaffordable) when its cost exceed a certain percentage of household resources, was calculated [8]. Thirdly, according to the impoverishment approach, affordability of medicines was evaluated by measuring the proportion of the population that drops below the poverty line due to health expenditures of the diseases [9].

Due to the large gap between urban and rural areas in China, the affordability of rare diseases in this study intended to be assessed separately by urban and rural residents, and the affordability would be analysed by the above-mentioned three methods individually.

Simoens found the price of orphan drugs is inversely proportional to the prevalence rate of the rare diseases treated [15]. Of the 7 surveyed diseases, however the aforesaid phenomenon was not observed. Our study showed that the prevalence rate of DMD, ALS and PAH were the same, while the health expenditure for the three diseases varied from 1200 to 240,000 yuan. The results also shown that poor households were less able to afford the health expenditure than richer households, which were consistent with other studies [16‐18]. However, some rare diseases have higher incidence in low-income residents, such as leukemia in Gansu Province (higher in rural) and malaria in China [19, 20]. Therefore disease burden of rural residents should be paid more attention. Furthermore, the reality cannot fully be captured by the results of affordability assessment, because many patients would rather not use healthcare service than become impoverished [21, 22].

High price of orphan drugs is the direct cause of heavy burdens for rare diseases patients, which is consistent with other studies [23]. Therefore, there is an urgent need to cut down the price of these drugs. However, as the market scale is relatively small and most orphan drugs are monopolized, cutting down the prices alone still cannot make the drugs become affordable to many patients. It takes time to define rare disease and kick-start relevant legislation in China, but we think policy makes may as well enact reimbursement policy for rare disease patients to address the impoverishment of rare diseases. In this case, covering rare diseases in the health care system and paying the health expenditure by multiple sources may be an effective solution to ease the burden for patients with rare diseases. WHO suggests that in developing countries, the cost for prolonging a quality adjusted life year (QALY) is acceptable when it is less than 3 times of the average GDP per capita [24]. In 2014, China’s GDP per capita has reached 46,629 yuan [12], so the acceptable cost for each QALY can be as high as almost 140,000 yuan, making it practical to cover the rare diseases with effective treatment and moderate expenses in the health care system. Besides, China should fully negotiate and make use of social resources, encourage the NGOs and companies to donate and set up a payment pattern so that health care funds, patients and third parties can share the expenses in order to reduce the ratio of out-of-pocket (OOP) expenditure. In this way, more patients may probably afford proper medical care, and the problem of poverty caused by disease could also be solved.

The three methods applied in evaluating the affordability of rare diseases and orphan drugs all have certain limitations. The annual per capital income method uses residents’ annual income as indicator in calculation. However, the huge gap between the rich population and the poor makes average income an ineffective index to describe the affordability condition of the general public. With current data, we can specify the evaluation into five different groups by their income level, but this is still not satisfying in reflecting the conditions of some rich groups and the poor. As for catastrophic expenditure method, it uses the threshold 40 % defined by WHO standards. As treatment is usually more expensive for rare diseases, the threshold can be lifted accordingly. For calculation in both catastrophic expenditure and impoverishment expenditure method, the distribution curves of urban and rural annual per capita disposable income. When fitting the income curve, we assume that for each income group, the income is in linear distribution, which may lead to an overestimated affordability for some low income groups and an underestimated affordability for some high income groups [25].

Furthermore, there is no registration system for rare disease or nationwide epidemiological survey on rare disease in China, so the prevalence rate used in this study is from Orphanet. Most rare diseases are genetic diseases and characterized by district and race, which might cause biases for the catastrophe rate and impoverishment rate in China (e.g. if the prevalence rate is higher in China, catastrophe rate and impoverishment rate would be underestimated). Thus there is an urgent need to establish registration system for rare disease, collecting data like prevalence rate data and providing evidence for policy making and implement. The three methods share a common assumption in calculation that the patients need to cover the health expenditure all by themselves, neglecting the circumstances where expenditures could be co-paid by other sources, thus underestimating the actual affordability of patients. Some districts in China have covered certain rare diseases in the health care system. In Qingdao, a city in Shandong province, patients of PAH and GD can have part of the expenses reimbursed. In Shanghai, 12 kinds of rare diseases such as phenylketonuria, maple syrup urine disease, and tyrosinemia have been covered by the city medical insurance [26]. Patients could receive a maximum of 200,000 yuan per year as reimbursement for health expenditure.

Our results shows that the affordability of treatment for rare disease is rather poor. Residents of different income levels all have difficulties to afford the treatment for rare diseases. Rare disease could easily impoverish patients and their families. Therefore, social security mechanism for rare disease patients should be established and specific payment pattern for orphan drugs should be set up. To reduce OOP health expenditure of patients, the co-payment pattern, led by government medical insurance and supported by medical aid, social charity and commercial insurance, is recommended.

WHO, World Health Organization; HAI, health action international; LPGW, lowest paid unskilled Government Worker; DMD, Duchenne muscular dystrophy; AS, Alport syndrome; TSC, tuberous sclerosis complex; ALS, amyotrophic lateral sclerosis; IPF, idiopathic pulmonary fibrosis; PAH, pulmonary arterial hypertension; GD, Gaucher disease.