The Cost of Life-Saving Drugs

In this essay I want to explore the ethics and responsibilities of drug companies when it comes to pricing of lifesaving drugs. We’ve seen numerous news reports about drug companies increasing the prices of EpiPens, AIDS drugs and other lifesaving pharmaceuticals. In extreme cases the CEO of these companies have been coldly unapologetic and shown signs of unbridled greed as the driving force behind these price increases.

However it is my opinion that we cannot paint the entire pharmaceutical industry in such broad strokes. In the case of so-called “orphan drugs” that treat rare diseases, the cost of developing such drugs is as high or higher than any other pharmaceutical yet the potential market can be quite small. With a small market and a small potential return on investment, the prices on these drugs necessarily can be enormous.

Case in point Spinraza. About 18 months ago, the FDA approved Spinraza for the treatment of Spinal Muscular Atrophy. I have Type 2 of that particular disease. Although I will soon celebrate my 63rd birthday, those with the more severe Type 1 SMA have extremely short life expectancies. In clinical trials on Type 1 patients, the drug greatly reduced the effects of the disease or at minimum halted the progression of the disease in over 50% of patients treated. Because Type 1 has serious mortality, they opened up the double-blind study and took patients off of the placebo and gave them the real drug once they realized he was having a positive effect. It would’ve been unethical to continue to give placebo to other patients in the trial once a significant benefit had been demonstrated. So I have to give them a tip of the hat for that choice. Although clinical trials only targeted infant Type 1 patients, the FDA approved the drug for all Type 1, 2, and 3 patients of any age despite the lack of evidence of its efficacy for other types and ages.

The drug is marketed by a company called Biogen. Biogen, which is licensing Spinraza from Ionis Pharmaceuticals, has set the list price for one does at $125,000. That means the drug cross $625,000 to $750,000 to cover the five or six doses needed in the first year, and about $375,000 annually after that, to cover the necessary three doses a year. Patients will presumably take Spinraza for the rest of their lives. https://www.nytimes.com/2016/12/30/business/spinraza-price.html

Administration of the drug requires an outpatient procedure to inject it directly into the spinal fluid. This procedure can be particularly difficult on older patients because many of them have had spinal fusion surgery which complicates things greatly. Biogen has been working hard to train a variety of hospitals around the world in the administration of the drug. They’ve also been working hard to work with government agencies and insurance companies to see to it that the cost of the drug is covered.

Getting coverage has been an uphill battle. The large expense, the incomplete data on its efficacy for older patients or for Type 2 and 3 patients has made this a tough sell.

Recently on Facebook in a number of groups related to SMA, I’ve seen several messages which are so critical of Biogen that they blame the company for the death of every SMA patient since the drug was approved. Week after week there are postings of obituaries of SMA patients with the accusation that their greed is responsible for the death of another victim. These posts have gone on to suggest in some cases that the drug should be given away for free. Note that these complaints against Biogen don’t ask that the drug be provided at cost. They seem to suggest that it ought to be completely free. If our entire healthcare system were to be held to this unreasonable standard, there would be no healthcare system at all. Doctors, nurses, and support staff could never be expected to work for free. Hospitals would never be built. Equipment could not be purchased to operate such facilities.

It seems to me that such accusations against Biogen are unsupported by any objective facts and display an unreasonable expectation on our healthcare system. We live in a world where healthcare is provided by either private insurance or by government programs. If one wanted to take the radical step of blaming someone for the death of these children, I would think that the blame would more correctly be placed on government agencies and insurance programs which refuse to pay for the treatment.

Let’s look at the cold truth about developing drugs in general especially orphan drugs.

Although there has been much SMA research supported by charitable efforts such as CureSMA.org and MDA, there is no way that these efforts have entirely paid for the development of Spinraza. In addition to the cost of search for such treatment, the clinical trials necessary to get such a drug approved are extremely expensive. As mentioned previously, Biogen has been working to get the drug approved in other countries around the world and to establish treatment centers capable of safely delivering the drug around the world. Naturally their initial focus has been on the US because that’s where the initial regulatory approval has been obtained. Expansion of these efforts to other countries with other regulatory procedures is no doubt a costly and time-consuming effort.

When they say that the cost of the dose is $125,000, that’s not manufacturing costs alone. The pharmaceutical company has to recoup tens or hundreds of millions of dollars it has invested in developing the drug, getting it approved, and getting it to market. The expansion of the market to other countries and other regulatory jurisdictions has to take a big piece of that as well. If we had to raise until the drug pays for itself in order to expand coverage beyond the US, there would be many more deaths then we are seeing now.

Although the effects of the drug have been phenomenal in many cases, it is only showing positive results in about 57% of those receiving the treatment. Many of these patients are only showing positive results after being on the drug a year or more. Once you get approved for the drug, it can be difficult to determine if you’re going to be one of those 43% for whom the drug has no apparent benefit. Only recently has there been any data to show its effectiveness in older patients or in Type 2 or 3 patients. This makes it a very tough sell for either private or government insurance programs. If we can believe statements from the company at various conferences and conventions, they are working hard to convince public and private insurance not only to approve the initial treatments but to continue treatments for a reasonable period of time to show that a particular patient will benefit.

Unfortunately we live in a world of limited medical resources. While we are arguing the ethical issues of paying for treatment for SMA, there are countless other medical conditions which face funding crises. We are faced with the tough choices of providing extremely expensive treatments with limited efficacy versus using those same dollars on other treatments for other diseases and conditions which have more proven track records. That is cold and cruel to say that but unfortunately we live with a healthcare system that has to impose triage to do the most good for the most people.

This is clearly not a case like the EpiPen or AIDS drugs that had been already marketed and priced and were later marked up hundreds of percent in price for no apparent reason. This is a brand-new treatment with an extremely limited market that is difficult to administer and for which there is only limited supporting data to justify its widespread use.

I don’t know what the actual costs of the drug are. I don’t know how rich Biogen and its shareholders are profiting from this new product. I do know that had Biogen and Ionis not invested the time and effort necessary to get the drug where it is today, there would be a lot more dead kids. I would think patients and their families would be grateful for the efforts that these companies have made and be less likely to paint them as greed driven coldhearted murderers.

Until I see hard evidence that there is some sort of price gouging going on with this treatment, I’m going to prefer to give them the benefit of the doubt and to be grateful for all of their efforts.

Now some disclaimers… I do not own stock in any company whatsoever. I have no ties to the pharmaceutical industry in any way. I have chosen not to pursue Spinraza treatment because of age 63 I seriously doubt it would do me any good. I have severe scoliosis which would make spinal injections extremely dangerous if not impossible. Other side effects such as respiratory infections would present a dangerous risk given my overall unstable health. If I were younger or in better shape I would most likely pursue the treatment aggressively. And if I had difficulty in getting approved for it, any anger I would have would be directed at government or private insurance and not the pharmaceutical companies.

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