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Kaitlynn was born September 29th, 2004. We have seen neurology specialists from St. Louis to New Orleans since she was born. Unfortunately, we still do not have a definitive diagnosis for Kaitlynn. The best guess her doctors have to offer is mitochondrial disease.

Rare Disease and Orphan Drug Profit Gouging

12:52 PM Posted In , , , , , , , , Edit This 14 Comments »
There are millions of people that suffer from obscure, unknown, and rare diseases. Together, these people make up a substantial portion of the population, but alone they are not an appealing business venture when it comes to discovering and marketing pharmaceutical treatments. For example there are approximately 8,000 different rare diseases. However, for a disease to be classified as a “rare disease,” it must afflict less than 200,000 people. 

This is what we call an orphan drug (developed specifically to treat a rare medical condition) and orphan disease ( so rare, obscure, or unknown that the disease does not have any viable treatment.) The economics of drug research, development, and marketing for orphan disease treatment is simply not profitable for the industry because so few are in demand of the product that would be created for each disease.

In comes The Orphan Drug Act (ODA) of January 1983. The ODA was specifically designed to encourage pharmaceutical companies to develop drugs for those diseases that have a small market. Under the ODA a company that develops an orphan drug for a rare disease may sell it for seven years without any competition. In other words, they will have a monopoly on the drug for seven years.  The company may also receive clinical trial incentives through grants to defray the cost of clinical research; tax credits worth up to 50% of the cost of clinical trials; a waiver of the Prescription Drug User Fee Act filing fees, that was worth an estimated 1 million per application in 2008; regulatory assistance; and expedited review processes.  

The ODA also removed some of the red tape that held orphan drugs from development. All drugs focus on the pharmacokinetics, dosing, stability, safety and efficacy of a drug. However, the ODA acknowledges that the process for clinical trials of orphan drugs have special factors. For example, it might not be possible to test 1,000 patients for a phase III clinical trial of an orphan drug, as there may not even be that many people affected by the disease.   

The ODA success is clear. In the decade before the ODA was enacted,  less than ten such products for rare diseases saw the market. From 1983 to  2009, an estimated 2,116 drugs received an orphan drug designation by the Office of Orphan Products Development (OOPD), 353 actually being approved for the market. The Orphan Drug Act of 1983 has clearly helped to improve the quality of life for many afflicted with rare and obscure diseases by making orphan drug research, development and marketing economically feasible and profitable for may companies.

However, there is still one major problem associated with orphan drugs… patient affordability. While the ODA made it fiscally attractive for the companies putting out orphan drugs, that does not mean that these companies are ethically concerned with ensuring patients get the medication at an affordable price. In knowing that they have a monopoly on a drug that is the only treatment option, they know that the patient will pay whatever they set the price at. The ODA incentives already make orphan drugs a profitable venture  for pharmaceutical companies. Yet, pharmaceutical companies are not happy with some profit, they want extraordinary profit. The prices of some of these orphan drugs per year are more than most people spend on a home. 

Take Botulism Immune Globulin (BIG) for treatment of infant botulism for example.  Botulism Immune Globulin cost 10.6 million dollars to bring from discovery to market. The FDA OOPD contributed $3.7 million of that cost. Yet, Baby-BIG cost $45,300 per infant/per dose. Copaxone, for relapsing-remitting multiple sclerosis, cost $1,771 per injection.  In 2007, Teva Pharmaceuticals made $0.303 billion dollars from the sell of Copaxone. Humira, for JV idiopathic arthritis cost $1,391 for a month supply. Abbott made $0.462 billion dollars of Humira in 2007. The list goes on and on, but you get the point.

In 1990, Congress tried to amend the ODA to address some of the abuses. The bill would  have reviewed the sale record of orphan drugs in the 5th year of marketing, determined if there was still limited marketing value, and if not- it would lose two years of marketing exclusivity. The amendment passed Congress, but was sadly vetoed by President Bush. 

The ODA is doing a great service to those with rare and obscure diseases. No one is asking pharmaceutical companies to trade profitability for philanthropy, but there should be some standardized safety net to prevent profit gouging of orphan drugs. 



Unknown said...

Yep..That's Big Pharma..Always out for the big bucks...

Unknown said...

A very scary subject, for sure. This is the one that always worries me - researchers are working hard to find a treatment for my daughter's condition, FOP, but what if it turns out to be unnaffordable?

Good blog. (BTW, a rare disease affects less than 1 in 2,000, not 1 in 200,000)

jo oliver said...

Thank you Phil and Friz:)

Friz, I worry about the same thing. My daughter is not actually diagnosed, but if we ever get a def. answer, I worry the treatment will be out of my reach too.

My blog post was accurate- a rare disease is classified as affecting 200,000 people or less. See here- http://rarediseases.info.nih.gov/RareDiseaseList.aspx

Unknown said...

Hi Jo. Thanks for your comments about the prevalence of a "rare disease". Actually, we are both correct! In Canada where I live, which has a population 1/10 that of the USA, a rare disease is one with a prevalence of less than 1 in 2000, while in the USA, the figure you cited is correct. I should have taken into account the different populations. Thanks again.

Unknown said...

Me again... Sorry to be obsessive. But, I actually was approximately correct the first time about a rare disorder being 1 in 2000. I checked out the link you posted, and it says a rare disorder is one with a prevalence of fewer than 200,000 people in the United States. As there are about 300,000,000 people in the USA, this means a rare disorder by that definition is about 2 people in 3000, or 1 in 1500 (very close to the 1 in 2000 number I cited which comes from the Canadian Organization for Rare Disorders).
Thanks again for your awesome blog.

Unknown said...

OK, now I note you originally DID say a rare disease affects fewer than 200,000 people in the USA! This is correct. I was sidetracked, thinking about prevalence rather than actual hard numbers. My apologies.

jo oliver said...

No problem Friz. Accuracy is an important thing. I certainly always want to clear up any misunderstanding, inaccuracy, etc..

Anonymous said...

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