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When the Patient Is a Gold Mine

For most of the 20th century, drug companies ignored rare diseases, because it wasn't prudent to sink millions of dollars into research to develop drugs for rare patients. If less than 200,000 people in America had the disease, no one wanted to take the financial risk when drug companies could make much more money developing a new arthritis drug. But there were many rare diseases, and many lives lost due to the expense of research -or lack of profit, if you look at it another way. However, fixing the problem led to unintended consequences, as the latest cover article at Bloomberg Businessweek explains.  

To address neglected research areas, Congress in 1983 passed the Orphan Drug Act, which gave drugmakers federal grants, tax incentives, and seven years of marketing exclusivity for new rare-disease treatments (vs. three to five years of exclusivity for a more common new drug). In the ensuing 34 years, more than 600 orphan drugs have been approved in the U.S., compared with 10 in the decade before the law was passed.

But government-protected monopolies, combined with desperate patients, led to today’s prices. Genzyme Corp. started the trend in 1991 by charging $150,000 for a year’s supply of a drug for treating Gaucher disease, an ailment that weakens bones and internal organs. In 2016, Biogen Inc. began charging $750,000 for the first year of treatment with a drug called Spinraza, which targets a deadly muscle disease. “Many of these manufacturers have perceived it as essentially a blank check to price the drug where they think it’s reasonable,” says Rena Conti, associate professor of health policy and economics at the University of Chicago.

The pharmaceutical company Alexion developed a drug called Soliris for two rare conditions and initially priced the therapy at $389,000 per year. Now, each of the 11,000 sufferers of a condition called aHUS can mean more than a half million dollars a year for the company. So was it any wonder that the sales force, using nurses as well as sales representatives, pressured doctors and patients to stay on the drug? Or funded lawsuits to get the drug paid for? Or sponsored support groups for patients? Read about the unnerving way that orphan drugs are sold at Bloomberg. -via Digg

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