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News from Medical News Today Apr. 25,
2007
Number Of Orphan Drugs Increases, But
Costs High For Consumers
Main Category: Pharma Industry News
Article Date: 25 Apr 2007 - 2:00 PDT
The
Hartford Courant on Sunday examined orphan drugs -- those that
treat disorders affecting fewer than 200,000 people -- which are
"one of the fastest-growing areas in pharmaceuticals" and can be "extraordinarily
costly" for consumers. The drugs often are extremely expensive
because they are developed for a small pool of patients and "because
developing any new medication is a long, risky and costly
undertaking," the Courant reports. The pharmaceutical industry
estimates that the cost of developing a drug costs $800 million from
inception to human clinical trials, and only 30% of experimental
drugs ever receive FDA
approval. As a result, "when it comes time to affix a price to
an orphan drug, companies are eager to recoup their investment
quickly," the Courant reports. The increase in orphan drug
development activity can be attributed to a 1983 federal law that
offers tax breaks and market exclusivity for such products, as well
as the "realization by smaller pharmaceutical companies that the
drugs represent a lucrative entrepreneurial niche," according to the
Courant.
Orphan Drug Profiled
The Courant profiled the orphan drug Soliris, made by
Alexion
Pharmaceuticals. Soliris is designed to treat paroxysmal
nocturnal hemoglobinuria, a life-threatening blood disorder that
affects 10,000 people worldwide. The wholesale price for a year's
treatment of Soliris is $389,000. Many people with the disorder are
expected to receive their first dose of the medication this month,
and health insurers are "in the early stages of evaluating their
policy" on the drug, leading many patients to worry whether they
will be able to afford it, the Courant reports. Bill Sidford, a
participant in clinical trials for Soliris, said, "There's a lot of
concern. Do you have to become indigent to afford it? Is it being
priced so we can't receive it? Who has accessibility? Do you have to
give up everything else to afford it? At this point, it's all
conjecture." David Araten, an assistant professor of hematology at
the New
York University School of Medicine who has treated patients with
PHN, said, "For patients who do well on this drug, it's like night
and day. For them, it's going to be worth every penny, ... and I am
certainly hoping the insurance company will fully cover the cost of
this drug." Lindsay Shearer, a spokesperson for
CIGNA HealthCare,
in an e-mail wrote, "Whether or not a medication is categorized as
an orphan drug does not determine our coverage policy. CIGNA covers
FDA-approved medications consistent with their FDA labeling,
according to the terms of the member's employer-sponsored health
plan." Many health insurers have a $1 million lifetime expenditure
cap, meaning a patient receiving Soliris at a cost of more than
$300,000 a year likely would lose coverage after two years,
according to Abbey Meyers, president of the
National
Organization for Rare Disorders (Podsada, Hartford Courant,
4/22).
"Reprinted with permission from
http://www.kaisernetwork.org . You can view the entire Kaiser
Daily Health Policy Report, search the archives, or sign up for
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http://www.kaisernetwork.org/dailyreports/healthpolicy . The
Kaiser Daily Health Policy Report is published for kaisernetwork.org,
a free service of The Henry J. Kaiser Family Foundation . © 2005
Advisory Board Company and Kaiser Family Foundation. All rights
reserved.
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