Orphan drugs — high-cost medications, including gene therapies, developed to treat rare diseases — represent one of the fastest-growing and most complex areas of pharmacy spend. Specialty drugs, including those with an orphan indication, often come with a high price tag and, according to an IQVIA Institute for Human Data Science report, will represent more than 40% of global spend by 2028, or about $443 billion by 2031, according to Research and Markets. 

“For payers and members, these specialty drugs, and especially orphan drugs including gene therapies, present unique challenges: clinical complexity, limited treatment guidelines and significant financial risk,” said Maryam Tabatabai, PharmD, associate vice president of clinical information at Prime. “That makes it much more important to be able to identify members with emerging high-cost therapies and those who may need gene therapy early in order to provide the right evidence-based clinical and personalized care and manage total cost of care.”  

What are orphan drugs? 

Orphan drugs, by definition, treat conditions that affect fewer than 200,000 people, according to the Rare Diseases Registry Program. 

The term originates from Harry Shirkey, a doctor who was chairman of the Committee on Drug Dosage of the American Academy of Pediatrics, who spoke of “pharmaceutical orphans” in the ‘60s. In the ‘70s, faced with a “drug lag,” the U.S. Food and Drug Administration (FDA) sought new ways to encourage pharmaceutical companies to produce drugs of “limited commercial value.” In 1983, the answer came when the Orphan Drug Act was signed into law, offering incentives, grants and market exclusivity to pharmaceutical companies for developing treatments for rare conditions.  

Today, there are more than 880 FDA-approved treatments (compared to fewer than 40 prior to 1983), yet more than 95% of rare diseases still have no FDA approved options, according to the National Organization for Rare Disorders.  

Orphan drugs are some of the most expensive medications on the market. One research study found that the median annual¹ cost for orphan drugs from 2017-2021 was $218,872, which adjusted for medical care inflation is $250,000 in 2026. 

Prime Therapeutics (Prime) has identified commercially insured individuals with more than $250,000 in annual drug costs account for $1 in every $10 of total drug expenditures and only 3 per 10,000 members have over $250,000 in annual drug costs, with most of these individuals receiving orphan drugs.² 

Given their complexity, these therapies often require specialized clinical review, intensive case management and evidence-based oversight to ensure members receive cost-effective and appropriate care. 

How predictive modeling identifies potential “drug super spenders” and potential gene therapy candidates 

People who rely on orphan drugs or specialty drugs can be categorized as “drug super spenders,” a term used to describe members whose annual drug costs exceed $250,000 across medical and pharmacy benefits. To help address rising drug spend in the specialty space, Prime developed predictive modeling capabilities that identify potential “drug super spenders,” as well as potential gene therapy candidates. This predictive modeling uses historical pharmacy and medical claims, demographics and enrollment data, evaluating patterns among members who may qualify for a gene therapy or have already surpassed $50,000 in prior-year spend on their way to being a “drug super spender.” 

The process involves a two-step approach: 

• Classification: Identifying which members are most likely to become drug super spenders or a gene therapy candidate in the upcoming year. 

• Regression: Predicting each member’s total drug cost over that same period. 

These models along with comprehensive member medical and pharmacy claims visualization enable payers to identify emerging high-cost members earlier, creating the opportunity to intervene with clinical solutions, case management or benefit optimization before costs escalate. 

“Data and analytics are essential to understanding and managing the rising impact of specialty medications like orphan drugs,” said Pat Gleason, PharmD, assistant vice president of health outcomes at Prime. “Prime’s ability to predict gene-therapy utilizers and drug costs through advanced analytics helps payers intervene sooner, support members with rare diseases more effectively and better manage the extraordinary costs associated with these therapies.” 

Integrated Analytics: A pharmacy and medical drug-spend solution 

Integrated Analytics, an application within Insights+, Prime’s one-stop, user-friendly digital reporting portal, pulls together pharmacy and medical data, enabling payers to see the member’s medical and pharmacy claims, analyze trends and take action based on timely insights. By centralizing reporting, the tool reduces manual work, speeds decision-making and helps clients manage rising drug spend — including the growing impact from orphan therapies. 

“Integrated Analytics was built to give our clients a clearer view of what’s driving their pharmacy and medical drug spend,” said Abby Schlosser, director of product at Prime. “When paired with our drug super spender and gene therapy predictive models, it becomes a powerful tool for managing rare disease costs, anticipating future high-cost therapies and identifying the most effective treatment options to improve outcomes.” 

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Feb. 28 is Rare Disease Day 

Prime joins the more than 300 million people worldwide with a rare disease in recognizing Rare Disease Day, which occurs annually on Feb. 28 (or, in Leap Years, on Feb. 29 — the rarest day of the year). This effort aims to bring awareness to rare diseases, advocating for access to diagnosis and treatment. Learn more at RareDiseaseDay.org.  

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Learn more about Insights+  

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References

1. Althobaiti H, Seoane-Vazquez E, Brown LM, Fleming ML, Rodriquez-Monguio R. Disentangling the Cost of Orphan Drugs Marketed in the United States. Healthcare (Basel). 2023 Feb 13;11(4):558. doi:10.3390/healthcare11040558 
2. Starner CI, Bowen K, Gleason PP. Drug Super Spender Tsunami: An Integrated Medical and Pharmacy Benefits Assessment. Journal of Managed Care and Specialty Pharmacy 2022;28(11):1200-2016. https://www.jmcp.org/doi/full/10.18553/jmcp.2022.28.11.1200