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Big Pharma Adopts Orphan Drugs

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It gets awkward, doesn’t it?

This post on orphan drugs is probably going to be what one calls politically incorrect. Oh, well.

I should start by saying that the Time magazine has just come out with a special issue titled “Why Medical Bills Are Killing Us.” The author, Steven Brill, should get some kind of award for his lengthy analysis of the reasons why healthcare costs are rising. He makes it very clear that the road to the hospital could be the road to bankruptcy for anyone under 65.

And this article comes fast on the heels of recent research by The Institute of Medicine and the National Research Council (see “Wake-Up Call” on January 14) revealing the nation’s disappointing achievements in healthcare. Although we invest more than 16 other developed nations, we rank at the bottom in terms of markers of health and wellbeing. On the other hand, our failure is creating enormous wealth in certain quarters.

And that is the take-away from Brill’s article. Profit appears to be the driving force in American healthcare, not a commitment to the health and wellbeing of the citizenry. And now about orphan drugs, which are emerging as a major money-maker for the pharmaceutical industry.

An orphan drug is one that has been developed to treat a very small population (under 200,000 people) suffering from a specific, rare condition. In 1983 Congress passed legislation that enabled orphan drugs to gain quick approval, get special tax benefits, and seven years of protection from competition. (I wonder who lobbied for this law.) At the time of passage, pharmaceutical companies were working on one such drug a year. Now about 70 new ones are being approved annually.

One feels uneasy about questioning the need for them, because the disorders they treat inspire great sympathy. One that has recently received a lot of publicity is Acthar marketed by Questcor Pharmaceuticals. Created from the pituitary glands of slaughtered pigs, it is used primarily in the treatment of infant spasms. It originally sold for $50 a vial but is now up to $28,000. A full treatment for infant spasm is about $100,000.

The CEO explains that the price has risen due to “market demand” as uses for the drug have been found in treating other disorders like multiple sclerosis and rheumatic diseases that don’t respond to the usual steroids. That means that the astonishing orphan-drug price is no longer justified. Why not lower it? “We would be sued by our shareholders,” the CEO responds.

Another new orphan drug called Gattex is coming out by NPS Pharmaceuticals. At about $300,000 a year, it will be used to treat a disorder called short bowel syndrome that affects fewer than 5,000 people. These individuals have trouble getting adequate nutrition, and they currently receive about $100,000 worth of intravenous (IV) nutrition per year. Gattex seems to reduce the need for IV nutrition by about 20%. According to my calculation, that means that annual expenses for each patient will go up to $380,000 per year. Perhaps quality of life will be greatly improved, but the drug also puts patients at a high risk for cancer.

For patients suffering from a rare cholesterol disorder called hypercholesterolemia that can cause heart attack before the age of 30, there are two new drugs. One is called Juxtapid by Aegerion Pharmaceuticals and costs up to $300,000 a year. Kynamro is another by Sonifi SA that is competitively priced at $176,000. Both carry a high risk of liver damage.

Of course the insurance companies are confronting the question of whether they are willing to pay these costs, and the only way they can is to increase premiums for all. It gets awkward, doesn’t it? At least the issue is awkward for insurance companies and for the collective. For healthcare providers, it’s a win-win situation.

The problem is that there is not a lot of money to be made in creating health. On the other hand, managing symptoms and rescuing patients in crisis is very lucrative; and if serious side effects and complications develop, well, they’ll have to be treated too. What a deal. It’s becoming ever clearer that the responsibility for health actually resides with the individual, not the healthcare industry. As soon as everyone really gets that and starts to work on it, the gaming of the system to maximize profit will begin to change

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