More Abuse Of The Orphan Drug System: Taking Treatment From Free To $80,000 A Year

from the regulatory-loophole dept

Last year, we wrote about a disturbing abuse of the orphan drug system in the US, which is designed to encourage the development of treatments for rare diseases, but which in practice can allow companies to increase prices hugely. Here's another example, reported by Adam Feuerstein in The Street, that is in some ways even worse. It concerns a company called Catalyst Pharmaceutical Partners, which has just reported what seems like good news for those suffering from Lambert-Eaton Myasthenic Syndrome (LEMS), a progressive, muscle-weakening disease. Catalyst has announced positive results from a final phase trial of a drug called "Firdapse." As The Street article reports, analysts believe that once approved by the US Food and Drug Administration, Firdapse could cost between $60,000 and $80,000 per year if it is designated an orphan drug, which brings with it seven years of marketing exclusivity. That might seem the going rate for new drugs, but there's a nasty twist in this tale, as Feuerstein notes:
Firdapse is not a new treatment for LEMS. The active ingredient in Firdapse is a compound known as 3,4-Dap, which has been available in the U.S. for more than 20 years. Doctors treating the small numbers of LEMS patients in the U.S. can obtain inexpensive 3,4-Dap from compounding pharmacies. It's even given away for free to doctors and patients by a tiny New Jersey drug maker, Jacobus Pharmaceuticals.
That means that Catalyst took no risks with Firdapse. Indeed, it didn't really do anything at all, as Feuerstein explains:
The company did no development work, made no effort to improve the drug's efficacy, safety or convenience for patients.
And yet despite that fact, it stands to profit handsomely:
For the zero work done by Catalyst, LEMS patients and their insurance companies will be paying as much as $80,000 for the exact same drug they use now for a fraction of the cost, if not gratis.
Derek Lowe, writing on Corante, puts it well:
I can think of no possible reason, no public good that comes from taking a drug that was easily available and working exactly as it should and have someone suddenly be able to charge $80,000 a year for it. This is not a reward for innovation or risk-taking -- this is exploitation of a regulatory loophole, a blatant shakedown, or so it seems to me.
What makes things worse, is that just a few weeks before, Lowe had described exactly this behavior from another company, Retrophin, which bought the marketing rights to a drug called Thiola. Here's what happened next:
Retrophin hasn't done any new trials, and they haven't had to. They've just bought someone else's old drug that they believed could be sold for twenty times its price, and have put that plan right into action. No development costs, no risks whatsoever -- just slap a new sticker on it and put your hands over your ears. This is exactly the sort of thing that makes people go into fist-clenching rages about the drug industry, and with damn good reason. This one enrages me, and I do drug research for a living.
He's probably not alone in being enraged, but this kind of abuse is so lucrative for the companies prepared to take this route that we're probably going to see more of it until this particular loophole is closed.

Follow me @glynmoody on Twitter or, and +glynmoody on Google+

Filed Under: drugs, firdapse, monopoly rents, orphan drugs, pharmaceuticals
Companies: catalyst phamaceutical partners

Reader Comments

Subscribe: RSS

View by: Time | Thread

  1. icon
    Maurice Michael Ross (profile), 10 Oct 2014 @ 12:34pm

    Research indicates that the situation is more nuanced. A small family company, Jacobus Pharmaceuticals, had been giving the drug away for this purpose for more than 20 years to about 200 patients per year, but had not conducted clinical trials, sought FDA approval, or done any of the other work required to get a drug on the market. It was apparently content to make and give away the drug to a small number of patients without compensation. However, the demand for the drug was much higher than 200 patients to whom Jacobus supplied it. Further, Jacobus' facilities failed repeated FDA inspections and it was unclear if it would ever be adequate to produce the drug in a manner approved by the FDA in sufficient quantities to meet demand. Catalyst sought to meet his consumer demand and to take advantage of the failures of Jacobus. Catalyst invested in the clinical trials and in developing manufacturing facilities that conform with FDA requirements. After Catalyst started its clinical trials, the small family business suddenly launched a small phase II clinical trial of its own---but many see that as an act of retaliation against Catalyst. Catalyst surely is seizing on a business opportunity, but opportunity arose because the smaller company, Jacobus, did not invest the funds necessary to bring this drug to market, get it approved by the FDA and meet consumer demand. Catalyst can be seen as doing a public service insofar as it has financed necessary clinical trials and sought FDA approval. Thus, it is not accurate to say that Catalyst did nothing to develop the drug or is engaging in free-riding. Here is a link to an article the explains this situation in a credible manner. an-Drug

Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here

Subscribe to the Techdirt Daily newsletter

Comment Options:

  • Use markdown. Use plain text.
  • Remember name/email/url (set a cookie)

Follow Techdirt
Insider Shop - Show Your Support!

Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Report this ad  |  Hide Techdirt ads
Recent Stories
Report this ad  |  Hide Techdirt ads

This site, like most other sites on the web, uses cookies. For more information, see our privacy policy. Got it

Email This

This feature is only available to registered users. Register or sign in to use it.