Half a year has gone by since disgraced pharma executive Martin Shkreli was sentenced to seven years in federal prison for securities and wire fraud while heading San Diego-based Retrophin.
As founder and CEO of another company (then known as Turing Pharmaceuticals), in late 2015 Shkreli bought the rights to the off-patent medication Daraprim (pyrimethamine), which treats rare parasitic infections in babies and HIV/AIDS patients, and jacked up its price by more than 5,000 percent — from $13.50 to $750 a pill.
The brazen move earned Shkreli the wrath of millions of Americans, and put a sinister face on the issue of rapidly escalating prescription drug prices.
While the example of Daraprim is extreme, it’s no exaggeration that the skyrocketing costs of medications — especially therapies that treat rare diseases — are infuriating patients and the advocacy groups that represent them.
“We are deeply concerned about rising drug prices,” said Ron Bartek, co-founder and president of the nonprofit Friedreich’s Ataxia Research Alliance (FARA) in Downingtown, Pennsylvania, in a phone interview with BioNews Services, which publishes this website.
“What’s important to us and our patients is sustainable access — not just for our patient families, but sustainable also for payers, for the national and global economy, and for the pharmaceutical companies. We want them to make money and continue developing therapies. But this whole house of cards could come tumbling down,” Bartek added.
Bartek co-founded FARA with his wife in 1998, the year after their stepson, Keith, was diagnosed with Friedreich’s ataxia, a debilitating, degenerative neuromuscular disorder that affects about one in 50,000 Americans.
“Our drug company partners talk about value-based pricing, but if they’re really just trying to figure out what the market will bear, then that’s a very short-term analysis and cannot be sustained,” he said. “That’s not going to work over the long haul.”
Balancing treatment costs
Markus Peters, PhD, is a pharma industry consultant and former chief commercial officer at Agilis Biotherapeutics, which earlier this year was acquired by PTC Therapeutics. He said many factors go into determining the price of a therapy. Besides the often-cited research and development costs, there also are manufacturing costs, which he said can be quite substantial when it comes to gene therapy.
“It’s also a tremendous effort to identify patients for clinical trials because they’re usually undiagnosed or misdiagnosed,” he said in a phone interview from Boston, estimating that only 1 to 5 percent of patients with ultra-rare diseases actually have been diagnosed as having them.
Peters is one of four panelists scheduled to speak Oct. 15 at a roundtable — “Value Pricing and the Patient Experience: How to Achieve an Effective Balance” — during the two-day 2018 NORD Rare Disease Summit in Washington, D.C. The event is sponsored by the nonprofit National Organization for Rare Diseases (NORD), which represents 280 patient advocacy organizations.
“So much of the innovation is now being driven by small companies — especially in the U.S. — but private investors need to see a return on their investment, and that has to be included in the drug price,” Peters said. “These people are putting risk capital or private equity out there for these efforts, and there’s only a certain probability those efforts will be successful. The higher the risk, the higher their expectation of a return.”
Despite the initial high costs, gene therapy actually can make treatment cheaper in the long run, according to Peters.
“A gene therapy is a one-time treatment covering maybe two or three years of classical enzyme replacement therapy. The same is true with organ replacement or bone marrow transplants,” he said. “My advice is to make sure drug development companies focus on diseases with a high unmet medical need; there are no ‘me-toos’ in the rare disease space.”
Brendan Hayes, government relations specialist for the National Hemophilia Foundation, also will be on that panel. She told BioNews that patients are sometimes viewed as part of the problem.
“Patients across the country are demanding safe, effective and affordable treatments,” she said. “There’s a lot of finger-pointing, but patients really want to help come up with solutions. For example, some ultra-rare disease patient families are raising money to fund research and development activities on their own.”
Hayes added that 60 percent of Americans with hemophilia are on commercial insurance plans, and that “a large percentage of these patients are on self-insured plans, which means that their employers assume the risk. So, some patients naturally worry that they might lose their jobs as a result.”
The promise of gene therapy
Paul Melmeyer, NORD’s director of federal policy, will moderate a discussion Oct. 16 on the second day of the NORD Rare Disease Summit. The talk, “Federal Policy Priorities & Election Implications,” focuses on the U.S. midterm elections set for Nov. 6 and how the results may affect rare disease patients.
“Both houses of Congress are up for grabs, and it can go either way. That can drastically impact the healthcare policies Congress will tackle next year … [lawmakers] could choose to reprioritize some issues over others, such as the price of pharmaceutical products or expanding health insurance options for individuals,” he said. “We’re also hopeful that the Orphan Drug Tax Credit could be addressed, and that we could reconsider whether cutting it in half was a good idea or not.”
Meanwhile, “we’ve seen several orphan therapies come to market over the course of the last year, including a couple of notable therapies that are incredibly effective, such as Spinraza, which has done wonders for many within the SMA [spinal muscular atrophy] community. There’s also Luxturna — the first gene therapy for a genetic disorder — which really improves the eyesight of individuals with inherited retinal diseases,” he said.
“So, while there have been very high prices, there have also been medical breakthroughs.”
Spinraza (nusinersen), an injectable therapy developed by Biogen for SMA, costs $750,000 for first-year treatment, and $375,000 each year thereafter. Luxturna, a one-time treatment developed by Spark Therapeutics, costs $850,000.
“It’s a very complex balancing act, and NORD does not have a position [on prices for specific therapies],” Melmeyer said. “We don’t believe that’s our role. What we focus on is that the product is accessible to the rare-disease patient population for which it’s intended.”
‘Prescription for reform’
Earlier this year, 21 prominent U.S. and Canadian doctors published a proposal for universal access to safe, affordable medications. The report, “Healing an ailing pharmaceutical system: prescription for reform for United States and Canada,” was released by Physicians for a National Health Program, a Chicago-based nonprofit group with 20,000 members across the U.S.
It identifies critical steps to slash costs, improve access, and increase the safety of prescription medications in both countries:
- Provide universal drug coverage without fees at the point of use.
- Reduce prices through negotiations with pharmaceutical firms and, when needed, compulsory generic manufacture.
- Enhance innovation through patent reform and by establishing new public agencies to fund drug development and clinical trials.
- Improve drug safety, efficacy, and prescribing quality by raising standards for approval and safety monitoring.
- Leverage popular support for reform in both the U.S. and Canada in order to push back against powerful political opponents.
“Our pharmaceutical system prioritizes industry profits over public health, but it doesn’t have to be this way,” Adam Gaffney, MD, of Harvard Medical School and co-chair of the Pharmaceutical Reform Working Group, said in a press release. “Through a series of common-sense reforms, we can increase the affordability, safety and effectiveness of medicine for our patients.”
Gaffney also warned that fighting the power of big pharma won’t be easy, given the $171 million the industry spent on lobbying Capitol Hill in 2017 alone.
“Every year we wait for reform means another spike in medication prices,” he said.
Sidney Wolfe, MD, founder of Public Citizen’s Health Research Group, added: “The pharmaceutical industry directly funds the regulating arm of the FDA, and paid more than $800 million in user fees in 2017. The FDA’s independence is too important to expose to the influence and money of the industry.”