illustration of pills shaped into a dollar sign ($)

Drug companies have fallen in love with rare diseases. That’s because they are huge money makers for the pharmaceutical industry. It wasn’t always this way. Before the Orphan Drug Act, rare or unusual conditions didn’t get much attention. That’s because they were perceived as money losers. If only a few hundred or a few thousand people took your medicine, it was deemed unprofitable. That has changed radically. As orphan drug costs have skyrocketed, such medications have become gold mines for Big Pharma.

Profiting from Orphans:

Most people have a great deal of sympathy for orphans. They have lost their parents and often have to depend upon the kindness of strangers to overcome the significant challenges life throws at them.

When it comes to orphan drugs, however, the pharmaceutical industry has discovered that this classification can represent huge profits. It wasn’t supposed to be that way.

The Orphan Drug Act:

In 1983 Congress passed and President Reagan signed the Orphan Drug Act. This legislation was intended to encourage the pharmaceutical industry to research and develop medicines for rare conditions. It was assumed that such drugs would not be profitable because so few patients would take them.

The Food and Drug Administration was very cooperative in advancing this program. It referred to these medications as “significant drugs of limited commercial value.”

To incentivize drug companies to invest in this kind of research, Congress offered tax breaks. Market exclusivity and patent extension were added benefits. In those days neither the FDA nor Congress imagined that pharmaceutical companies would charge tens of thousands of dollars for orphan drugs.

We met with a high-level executive within the pharmaceutical industry. He told us about a meeting of several other drug company executives. A hypothetical question was posed: What would we do if one of our companies discovered a cure for cancer? After much discussion, these leaders of key pharmaceutical companies concluded that they would have to give the drug away. Otherwise they would be despised by the American public. How far we have come since that meeting decades ago.

Are Orphan Drug Costs Out of Control?

Fast forward to today’s marketplace. The humanitarian Orphan Drug Act that was supposed to create affordable medicines for rare conditions has become a windfall for the pharmaceutical industry. It has challenged many patients and their families who may not be able to afford the medicines they so desperately need. Check out these mind-bending orphan drug costs:

Actimmune:

Some of the most expensive drugs in the pharmacy were developed under the orphan drug umbrella. One example is interferon gamma-1B (Actimmune). Injections of this drug treat a rare immunodeficiency disease called chronic granulomatous disease.

A genetic defect causes people with this condition to develop frequent fungal and bacterial infections. The drug is also used to treat severe malignant osteopetrosis. A month’s supply of Actimmune could cost as much as $55,000. Over a year that could add up to $600,000 or more.

Cinryze:

Another orphan drug is a C1 inhibitor called Cinryze. It is prescribed for a rare condition called hereditary angioedema. Without warning the face may swell. The lips and tongue can also balloon and block breathing. The life-saving drug that prevents the attack can cost over $46,000 a month.

Revlimid:

Cancer drugs are also notoriously expensive. The multiple myeloma drug lenalidomide (Revlimid) is a life-saving medication. A month’s supply can run over $14,000. Even people with insurance may find their copay and deductible payments are out of reach.

Opdivo, Keytruda, Yervoy and CAR-T:

Other very expensive cancer treatments include drugs like pembrolizumab (Keytruda), nivolumab (Opdivo) and ipilimumab (Yervoy). A new generation of cancer treatment called CAR-T (chimeric antigen receptor T-cell therapy) is projected to cost anywhere from $373,000 to $475,000. That doesn’t include the cost of hospitalization. An article in the Wall Street Journal (April 26, 2018) points out that the entire treatment could add up to $1 million. The Headline:

“The Million-Dollar Cancer Treatment: Who Will Pay?”

It’s hard to imagine how any individual could afford such orphan drug costs. Even insurance companies are likely to find the payments busting their budgets. Premiums will rise. That will impact everyone.

We have no fondness for the insurance industry, but with orphan drug costs out of control, insurance companies will have to raise prices across the board just to survive. Even so, co-pays and deductibles will make it hard for people with “rare” conditions to pay for life-saving medicines. Some people sell their homes and go into debt to keep a child alive. Others will doubtless die because they cannot afford a new breakthrough.

People’s Pharmacy Perspective:

Perhaps it is time for Congress to revisit the Orphan Drug Act. What was intended as an act of kindness has become a pathway for the pharmaceutical industry to charge exorbitant prices. Orphan drug costs should not be unconscionable. To profit to such a degree from the misery of others seems to us an affront to decency.

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  1. Lori
    NC
    Reply

    Drug companies and insurance companies are the biggest racket since the mafia. Everyone wants cheaper prices, but when putting controls on these companies is mentioned, everyone screams bloody murder about too much government intervention.

    Well, you can’t have it both ways. Either we put some more regulations on them or we get screwed-they obviously won’t control themselves. We saw that with the banks in ’08. Self-regulation does not work!

  2. Cam
    Texas
    Reply

    Very sad. I cannot think of one area in the US that has not been corrupted by greed. They are in order: Pharmaceutical industry, Medical care ( it is not health care any more), Legal industry and PC and other types of ridiculous law suits. Criminals even suing the victim and winning huge some of money. Education – universities and school system (bloated w. highly paid administrators-Katy, TX superintendent was paid $900,000.00 to buy out his contract – also High schools building $70,000,000 stadiums.

    Churches taking in millions tax-free and the leaders living like kings, City, State & Federal officials making huge salaries and have enormous perks., Sports industry & entertainment Industries with customer fees so high the average family cannot afford to see a game or go to a concert. The aid & assistance to the needy is rampant with abuse Red Cross CEO makes millions , as do others. I wish I knew what the answer is , but if this continues we will all go down the drain.

  3. Kirk
    St. Paul, MN
    Reply

    Insurance was the worst thing that could have happened to a free market place. They insulated the consumer from what the true cost of a drug is and allowed the pharmaceutical companies to inflate prices to what once would have been inconceivable. In the 1980’s the minimum price for a prescription at an independent pharmacy I worked at was $1.95. Try to find anything for that price now, OTC or prescription. The system is broken because of greed. It doesn’t help that we now have lawyer conglomerates suing for every conceivable adverse reaction. Turn on daytime TV, free or cable/satellite. Every commercial break has drug advertisements (another bad idea) AND/OR some lawyer group advertising a lawsuit against a drug company for damages. Insanity.

  4. Mary
    Chicago
    Reply

    It comes down to if you are rich you live, and if poor you die. Time to stop this greed.

  5. mary
    USA
    Reply

    i have many friends who take massive amounts of drugs. When I tell them they can do without this drug or that drug and offer what natural things they can do, they always, always, always choose the drugs. Such a single thing as sciatica, which I had and got over it without drugs, they absolutely will not try anything else. I cannot believe it. These people are my age, middle 70’s, and everyone is on drugs and are happy to continue.

    I told my friend yesterday how good he looked. He said he takes 9 drugs in the am, 9 in mid afternoon, and 9 pm for pain control

  6. Joe
    Florida
    Reply

    I truly believe that a lot of money from exorbitant drug prices goes from the pharmaceutical
    lobbyists to the pockets of our “lawmakers”. In my 80th year of life, I still am amazed by people becoming politicians leave as millionaires. I am sure this transfer of money by lobbyists will never be made illegal by those who receive it.

  7. Eddy
    NC
    Reply

    I was diagnosed with CIDP 13 years ago and have been on IVIG several times a month. At the Infusion Clinic the woman next to me receiving the same IV drug thru Medicare paid $1,700 and my North Carolina Blue Cross paid $10,000. This was an unbelievable difference. A few years ago Time Magazine said IVIG was one of the least expensive drugs to be made but the drug companies charged outrageous prices. Because CIDP is considered an orphan disease there hasn’t been much research into a less expensive drug alternative.

  8. Paula
    Nc
    Reply

    Why is such a drug monopoly allowed in the US?

  9. Paul
    New Mexico
    Reply

    Re: orphan drug costs
    The response I hear to complaints about drug costs is “but the company needs to recover its R&D costs…”. So I wonder how true that really is. How much of that cost is underwritten by NIH and other government entities? If we looked at the top 10 new drugs over the past decade what would we see about government subsidies? What can you tell us here? It may be surprising. And then there are antics with Epi pens, or Pharma Bro’s price gouging [so glad he’s in jail for that].

    • Laura
      Reply

      Funding for the NIH and other scientific research has been reduced dramatically over the past several decades. Not saying that’s an excuse for the “R&D” line, but the U.S. does not invest in science any more.

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