Orphan Drugs Have Become Big Business

Orphan:
Noun: 1a. A child whose parents are dead. b. A child who has been deprived of parental care and has not been adopted…4. An orphan technology or product.
Adjective: 1. Deprived of parents…5. Affecting so few people that the development of treatment is neglected or abandoned for being unprofitable: an orphan disease.
This definition is from the American Heritage Dictionary of the English Language. For a more vivid description of an orphan’s experience, all you have to do is open Charles Dickens’ book, Oliver Twist. The children in the story are abused and neglected and survive by scrounging.
Like orphan children, orphan diseases are often neglected. People who suffer from rare conditions are frequently left to their own devices. Without treatment, they could expect their lives to be nasty, brutish and short.
All that was supposed to change in 1983. That’s when Congress passed the “Orphan Drug Act.��? It offered incentives to drug companies so they would develop treatments for uncommon diseases.
Because pharmaceutical research and development is so costly, Congress recognized that most companies wouldn’t bother unless they didn’t lose too much money in the process. There was no expectation that orphan drugs would ever turn a significant profit. The whole enterprise was supposed to be altruistic.
That’s why drug companies were given a 50 percent tax credit on research and development for these drugs, grants to help them test drugs in patients and extended patent-like protection.
Twenty years later, though, the charitable impulse has been subverted. Orphan drugs are now among the most expensive in the pharmacy.
Rituxan, a medication used to treat non-Hodgkin’s lymphoma, saves lives from this cancer, but costs around $12,500 annually. The life-saving leukemia drug Gleevec averages $37,000 a year.
Cerezyme is a bio-engineered enzyme for Gaucher disease. It costs an average of $200,000 annually per patient. That includes babies and children who need lower doses. Some adults have to spend $600,000 a year just to stay alive. That’s over $1,500 a day.
No one can afford that kind of drug bill. Even with insurance, families struggle. Those without insurance may have to impoverish themselves so they qualify for Medicaid benefits.
When Congress and the FDA dreamed up the orphan drug bill they didn’t consider limiting profitability. They simply assumed that with so few patients as a market, these products had limited commercial value. The legislation was based on the concept of compassion.
By charging whatever they want, however, some companies that make orphan drugs are getting rich. According to the Wall Street Journal (Nov 16, 2005) Genzyme, the maker of Cerezyme, makes a gross profit margin of 90 percent on this medicine. Sales exceeded $800 million last year. Genzyme gets away with it because patients have no alternative if they want to stay alive.
Some pharmaceutical executives with million-dollar salaries like to think of themselves as benevolent. Perhaps instead they should imagine themselves in the role of Dickens’ character Fagin, exploiting orphans to enrich themselves.