There was a time when people took care of orphans and widows. Everyone understood that these vulnerable individuals required compassion and assistance. The Bible urges us to look after orphans and widows in their distress and encourages us to be kind and generous to the fatherless children of the world. Now, though, many drug companies are taking advantage of orphan drugs to bolster their bottom line. The profits are mind boggling!
What Is An Orphan Drug?
When you imagine the word orphan, what comes to mind? Many people will envision a child with no parents or family members to care for them. Many have described orphans as needy, destitute or unloved.
When it comes to orphan drugs, though, your understanding of orphan could be turned upside down. The Meriam-Webster Dictionary defines orphan drug as:
“a drug that is not developed or marketed because its extremely limited use makes it unprofitable”
Back in 1983 when Congress passed the Orphan Drug Act, the legislation was intended to create substantial incentives for drug companies to develop products to treat rare diseases. In those days, the pharmaceutical industry was reluctant to spend money creating products that would treat only a relative handful of individuals.
Pharma executives assumed that they would lose money on such medicines. They could not imagine charging hundreds of thousands of dollars for a course of treatment. They feared the American public would object to price gouging.
The Orphan Drug Act provided companies big tax incentives. In addition, they got years of market exclusivity. Other companies would not be allowed to compete, even if they came up with a better product. At the time, this seemed like a great deal for everyone. Drug companies wouldn’t lose a lot of money doing the noble thing by developing new treatments. People with unusual diseases would benefit from orphan drugs. It should have been a win-win!
Orphan Drugs Became A Big Bonanza:
The original concept behind the Orphan Drug Act was honorable. I traveled to the FDA to meet with Dr. Marion Finkel in the 1980s to congratulate her on the passage of this landmark legislation. She was a hero of mine because she led the FDA’s “Committee on Drugs of Limited Commercial Value.” Later, she was designated Director of Orphan Product Development at the agency. I fear she is turning over in her grave because the medications she imagined would be affordable have become cash cows for the pharmaceutical industry.
Dr. Finkel and her FDA colleagues assumed that most drug companies would lose money researching and developing compounds for rare diseases. That is why they described these products as “significant drugs of limited commercial value.” The framers of the Orphan Drug Act would not recognize it. Orphan drugs are now some of the most profitable pharmaceuticals in the world.
Some analysts predict that in three years the top selling orphan drugs will bring in more than $40 billion to the pharmaceutical industry. Many of the high priced orphan drugs are designed to treat cancer.
For example, Revlimid (lenalidomide) is a medication that was originally approved to treat the blood cancer multiple myeloma. It is now also used for other cancers including lymphoma. Before it had generic competition, it was earning nearly $10 billion annually.
Can You Believe These Prices for Orphan Drugs?
Imbruvica (ibrutinib) is a drug for treating other blood cancers including chronic lymphocytic leukemia and small lymphocytic lymphoma. According to Drugs.com, each tablet costs nearly $600.
Even more astonishing is an orphan drug approved for treating Duchenne muscular dystrophy. The brand name is Exondys 51. It is one of the most expensive medications in the US with a price tag between $750,000 and $1.5 million annually for a single patient.
It is estimated that this rare muscle wasting disease affects about 14 in every 100,000 young men. Without insurance, hardly anyone could afford this treatment.
According to an article in Fortune (Feb. 7, 2020), a gene therapy for spinal muscular atrophy (SMA) costs more than $2 million per patient.
It is estimated that one person out of 10,000 experiences this rare genetic condition. A competitive drug, Spinraza, costs as much as $750,000 the first year and $375,000 each subsequent year.
Don’t Worry, Be Happy Because Insurance Will Pay:
We have read articles that conclude patients should not worry about the high costs of orphan drugs because Medicare, Medicaid and/or insurance companies will cover the bill. Excuse me? Insurance companies keep raising their premiums in part because of the ever-increasing costs of billion-dollar orphan drugs.
Who pays for Medicare and Medicaid? Us! These government-sponsored systems must also raise premiums if they are to cover the latest and greatest cancer treatments. Many pharmaceuticals for hard-to-treat malignancies are considered orphan drugs.
Cancer Drugs that Bring In Big Bucks:
Cancer medications frequently earn orphan status. Drugs like Keytruda, Opdivo and Yervoy have been heralded as breakthroughs for melanoma and other hard-to-treat malignancies. The list price can range from $100,000 to $150,000 annually. Even with insurance, co-pays can become unaffordable for many patients.
Orphan drugs are often life savers. Remember, the original intent of the legislation was to make such medications available for people who would otherwise die. Please recall that the FDA called these medications “significant drugs of limited commercial value.”
The National Organization for Rare Disorders (NORD), Congress and FDA officials who worked tirelessly to make the Orphan Drug Act a reality did not anticipate that it would provide a huge bonanza for the pharmaceutical industry. In 1983, no one could have imagined billion-dollar revenues on such medications.
Best Selling Orphan Drugs:
Drug company executives learned that no one would hold them accountable for sky-high prices. It has figured into their planning for years. According to a joint investigation by Kaiser Health News (KHN) and NPR:“Seven of the 10 best-selling drugs in the country in 2015 were orphan drugs.” In that year, none earned less than $3 billion in sales.
Other orphan drugs that were on the Top 10 Best-Selling Drugs list from KHN & NPR include:
- Enbrel
- Remicade
- Rituxan
- Neulasta
- Revlimid
- Copaxone
KHN & NPR Team Up:
The two-part series published and broadcast by KHN & NPR revealed some shocking stories and statistics:
“At the request of Kaiser Health News, Express Scripts, which manages pharmacy benefits, analyzed the orphan drugs on its approved list, or formulary. Four orphans cost more than $70,000 for a 30-day supply, or $840,000 annually. An additional 29 orphan drugs cost at least $28,000 for a 30-day supply, or more than $336,000 a year. At those prices, the revenue for a an orphan-drug maker can build up quickly: A $50,000 orphan taken by 50,000 patients could reach $2.5 billion in annual sales; a $300,000 orphan for just 5,000 people could hit $1.5 billion a year.”
What Would the Bible Say?
We wonder how drug company executives view orphans. Do they see them as a pot of gold to be exploited or an opportunity to do the right thing for people who are suffering?
We fear that drug makers have learned how to bend the rules to their own benefit, leaving American families to pay the bills. Lest you think this is an esoteric issue that has no impact on your life, let me remind you that orphan drugs are having a huge impact on insurance companies and also Medicare and Medicaid. The incredible cost of new cancer drugs and other orphans is pushing up premiums for everyone. The next time you see the cost of your health insurance rise, consider that drug costs are a big reason for those substantial increases.
Perhaps it is time to rename orphan drugs. The pharmaceutical industry views them as golden eggs. The only trouble with this perspective is that the astronomical prices drug companies charge for them may end up killing the goose that lays them.
What Can You Do?
Perhaps it is time for Congress to take another look at the Orphan Drug Act to see whether there is a way to make life-saving medicines more affordable. If a drug company takes advantage of market exclusivity for its orphan drug, should it be allowed to charge hundreds of thousands of dollars for a life-saving medicine?
Let us know your thoughts in the comment section below and do let your Congressman know what you think about this controversial subject.
If you would like to learn more about orphan drugs and other prescription price issues, you may find our Guide to Saving Money on Medicine of great interest. You will discover that many brand name drugs, including a number of orphans, are far less expensive in Canada where the government negotiates directly with pharmaceutical manufacturers.
