Orphan Drug Bounty Comes At Steep Price : Shots - Health News Three decades ago, Congress set up a system to encourage drug companies to develop treatments for rare diseases. The law has worked, but at a high cost.
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High Prices For Orphan Drugs Strain Families And Insurers

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High Prices For Orphan Drugs Strain Families And Insurers

High Prices For Orphan Drugs Strain Families And Insurers

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ROBERT SIEGEL, HOST:

People with rare diseases had few options for treatment before the Orphan Drug Act of 1983. That law gave drug companies financial incentives to develop drugs for small groups of people. It has been wildly popular with the industry. In 2015, nearly half of the new drugs approved by the U.S. Food and Drug Administration were for rare diseases. The price tags are high, often in the six figures for a year's worth of treatment.

KELLY MCEVERS, HOST:

Kaiser Health News has investigated the booming business of orphan drugs, their cost and their effect on the U.S. health care system. Sarah Jane Tribble has the story of one Connecticut family. They have health insurance, but they still struggle to pay for the medicine.

(SOUNDBITE OF HEART MONITOR)

SARAH JANE TRIBBLE, BYLINE: Luke Whitbeck is 2 years old, and today is button day.

MEG WHITBECK: Bum bada bum (ph). Can you say bum bada bum?

LUKE WHITBECK: Bum, bum, bum.

TRIBBLE: Luke has a rare genetic disorder called Gaucher disease. Each week, he goes with mom, Meg Whitbeck, to the hospital to get an infusion. The medicine goes through a surgically implanted port at the center of his tiny chest, what Luke calls his button.

LUKE: Ow.

M. WHITBECK: Are you OK? Is something hurting you?

LUKE: My button's hurting me.

M. WHITBECK: Your button's hurting you. Tell me where.

LUKE: Right there.

TRIBBLE: The hospital machines beep around him as a liquid medicine called Cerezyme flows through the plastic tube in his chest to his bloodstream. The drug replaces an enzyme Luke's body lacks. Gaucher disease is fatal, and without treatment, children die as young as 2 years old. Luke was already suffering at 5 months old. Meg says that's when his doctor noticed that Luke's liver and spleen were swollen.

M. WHITBECK: From that point on, Luke got sick all the time. One month, out of 30 days, he had 15 days with a fever.

TRIBBLE: He was agitated, cranky and tired. When solid food was introduced, it was difficult.

M. WHITBECK: Luke would, like, choke or gag and vomit - like, empty the contents of his stomach violently.

TRIBBLE: Luke became so thin that his rib cage was visible, yet his liver and spleen continued to swell. At 18 months old, Luke spent a string of days in the hospital for tests.

M. WHITBECK: He would just, like, lay around and just, like, look around the room. He didn't even need to hold the toy. But he was so lethargic and exhausted that he just kind of laid there.

TRIBBLE: Genetic tests confirmed Gaucher, a disease so rare that it only affects about 6,000 people in the U.S. The doctors immediately prescribed Cerezyme, and the therapy has worked so well that the family calls it Luke's superhero medicine. There's only one problem. It costs about $300,000 a year. Abbey Meyers is one of the architects of the 1983 Orphan Drug Act and the founder of the National Organization for Rare Disorders.

ABBEY MEYERS: People will set a price of $300,000 a year for their drug for a fatal disease, and they'll go to church every Sunday. And they'll pray, and they'll ask for God's grace, you know? And I'm wondering, what does God really think about this (laughter), you know - wow.

TRIBBLE: Abbey Meyers' son suffered from severe Tourette's syndrome. An experimental drug helped him, but then the drug maker stopped developing it when it didn't work on a more common condition.

MEYERS: They didn't really care whether it worked on Tourette's syndrome or not because there weren't enough people with Tourette's syndrome to make the drug profitable.

TRIBBLE: The Orphan Drug Act gave drug makers a goody basket of financial incentives to ensure medicines would be made even if they didn't make a profit. The law gives companies a fee waiver, tax credits and access to special grants. Plus it guarantees the drug no direct competition for seven years in treating that disease. That meant that when Cerezyme was approved in 1994, the drug maker could charge whatever it wanted. And while the seven years has passed, there's still not much competition.

The other drugs approved to treat Gaucher all cost about the same, $300,000. The FDA has no authority over prices. Luke's father, Drew Whitbeck, says he doesn't understand why the drug still costs the same as it did two decades ago.

DREW WHITBECK: It doesn't seem to make sense to me that the amount of money that they used to create this drug hasn't been recouped and now just socking profits. (Laughter) Like, I just don't - I don't buy it.

TRIBBLE: Sanofi Genzyme, the maker of Cerezyme, maintains that it has increased the price only slightly. Company spokeswoman Lisa Clemence wrote in an email that, quote, "the price relative to inflation is 33 percent lower today than it was 22 years ago." She also said the prices of their drugs were determined by several factors, including the clinical value they provide to patients and the rarity of the diseases.

Drug makers also have to pay for the research and development on drugs that fail, says Jim Greenwood, president of the industry group BIO. Higher prices for orphans should be expected, he says.

JIM GREENWOOD: You're having to recover your costs over a much smaller population than you would for a big blockbuster drug. And so the per-unit price has to be higher.

TRIBBLE: Express Scripts own the specialty pharmacy that the Whitbecks use through their insurance company. Express Scripts is one of the biggest pharmacy benefit managers in the U.S. As part of our investigation, it ran an analysis of the price it pays for orphan drugs. Four of the orphan drugs it covers cost more than $70,000 a month. Another 29 cost at least $28,000 a month. Dr. Steve Miller is medical director of Express Scripts.

STEVE MILLER: Orphan drugs are for those rare conditions, and often there's only one drug to treat those patients. When there's only one product, we have very little negotiating power.

TRIBBLE: United Healthcare, the Whitbeck's insurer, has a drug it prefers more than Cerezyme for patients with Luke's disease, but Luke was too young to take it. Months passed before the Whitbecks were certain the insurer would cover the drug their boy was receiving. Meg Whitbeck was at a loss.

M. WHITBECK: And so we're like, how could something that's going to keep my baby alive not be covered by insurance?

TRIBBLE: The insurance company did agree to pay for the drug. United Healthcare spokeswoman Tracey Lempner stated in an email that specialty medications like Cerezyme are among the greatest drivers of pharmacy cost. The Whitbecks are still unclear how much they will end up owing on Luke's medicine and then the related care. Last year, they spent about $17,000 out of pocket, but this year could be higher.

M. WHITBECK: I feel like it comes down to putting a price or a value on a human life.

TRIBBLE: The growing number of orphan drugs combined with their average six-figure price tags is taking a toll on families and the U.S. health care system, says Craig Burns with AHIP, the National Health Insurance Association.

CRAIG BURNS: There's a tidal wave of expensive orphan drugs coming, and so it's becoming harder and harder and harder for payers to try and keep up.

TRIBBLE: Back in the Whitbeck's Connecticut living room, it's been two days since Luke's infusion, and his energy level is high. Like any toddler boy, Luke loves his toy cars and racing them.

LUKE: Watch this (unintelligible) down here. Oh, wow - see that?

TRIBBLE: Meg and Drew Whitbeck say they will do anything to make sure Luke gets his medicine.

LUKE: Whoa.

TRIBBLE: I'm Sarah Jane Tribble in Ridgefield, Conn.

MCEVERS: Sarah Jane Tribble is with Kaiser Health News. More about the investigation is at npr.org.

(SOUNDBITE OF THE FLAMING LIPS SONG, "ARE YOU A HYPNOTIST??")

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