Why Is The FDA Giving A Potential COVID-19 Treatment 'Orphan' Status?

from the we-don't-need-no-more-exclusives dept

Coming up with a treatment for COVID-19 is obviously incredibly important, and I'd be perfectly content if whoever did so got filthy stinking rich for basically saving the world. But we should be pretty damn careful about what kinds of incentives we set in place, and how that might lead to a ridiculous monopolistic, exploitative situation. Unfortunately, it looks like one pharma giant -- with a hopefully promising approach -- is already abusing the regulatory process to make sure it can extract monopolistic rents for a potential treatment.

It's good and exciting that various companies are pulling out all the stops to try to come up with some sort of treatment for COVID-19 (though it's incredibly dangerous and frustrating that the President of the United States seems to be regularly suggesting drug treatments based on basically no evidence of their effectiveness, and without regard to the safety -- or lack thereof -- to desperate people willing to listen to his unscientific snake oil nonsense).

One of the most promising offerings, though, has been remdesivir, from pharma giant Gilead Sciences. It's an anti-viral drug that has been in testing for other viruses, such as ebola, and there were some early suggestions that it might work against COVID-19. It's promising enough that NIH clinical trials for using remdesivir to treat COVID-19 started back in February (funded by NIH, not Gilead). And, over the last few weeks, Gilead has been facing rapidly increasing demand for the drug and has been offering it under "compassionate use" rules -- though it just put a halt to that program (though it claims it is creating a better process).

At this point, it's worth pausing a second to give some of the background on remdesivir. While everyone refers to it as coming from pharma giant Gilead, as with most drug breakthroughs, the reality is that most of the work in discovering remdesivir actually came from academic institutions, using US taxpayer money from NIH, including a recent influx of $37.5 million in taxpayer funds to the University of Alabama at Birmingham, which developed remdesivir with some help from scientists at Vanderbilt University and UNC. Gilead's role, was as a partner of UAB to handle the clinical trials -- which are certainly expensive. But, the fact is that this drug was not "developed" by Gilead, but by a public university using public money. Still, Gilead, as is often the case, is the one running around getting all the patents for remdesivir. In the US, it has applied for four patents, three of which have already been approved. It appears that those three patents will grant Gilead exclusivity over remdesivir until October 29th, 2035.

You might think that would be enough for Gilead. You'd be wrong. On Monday, Gilead was able to get the FDA to designate remdesivir as an orphan drug for the treatment of COVID-19. This is the part that's bullshit. The Orphan Drug Act was designed to give extra incentives to drugmakers to develop drugs for which there is a very small market, such that it's unlikely that (even at inflated monopolistic prices) the market can compensate them adequately for the development to treat those rare diseases.

So, uh, can someone at Gilead or the FDA explain how the fuck COVID-19 should qualify?

Basically, it looks like Gilead is pulling quite the scam. To get orphan designation according to the law in the US, you need to be targeting a "rare disease," with that being on the basis of it affecting 200,000 people or less in the US:

The disease or condition for which the drug is intended affects fewer than 200,000 people in the United States or, if the drug is a vaccine, diagnostic drug, or preventive drug, the persons to whom the drug will be administered in the United States are fewer than 200,000 per year

Now, technically, this remains accurate at this moment in the US where "official" cases in the US are still at 33,404 (Monday evening as I write this... I expect it will be higher by the time this is published). But that does not mean that the disease is "rare." First, we've barely got any testing infrastructure in place, so the actual number of patients is obviously much, much higher in the US. Second, the whole reason we've shut down much of the country is because many, many, many millions of people are at risk of getting the disease.

Calling COVID-19 a "rare" disease in order to get special benefits is bullshit.

But the fact that Gilead was able to do it here, and the FDA (ridiculously) approved it, means that we're likely to see this "loophole" exploited much more frequently. Any pharma company with a potential treatment for any new disease, just needs to get their orphan status request in before too many people are infected, even if everyone recognizes that something is highly contagious and will likely spread to millions of people before this is over.

So, what kind of "benefits" does this new status give Gilead? It gives the company extra exclusivity regardless of the validity of Gilead's patents. The FDA will not allow others to use the same chemical for seven years -- again, no matter the status of Gilead's patents. On top of that, Gilead can potentially get a 25% tax credit.

So, to sum up: it's a very good thing that remdesivir might be a useful treatment for COVID-19. And, frankly, I'd be totally fine if the US government just handed over a giant check if it proves to be effective. But, the fact is that this drug was developed with taxpayer funds at public universities, and the COVID-19 clinical trials are being done again with taxpayer funds by the NIH. Gilead already has three patents on it and will likely get its 4th. So why the fuck are we giving it extra exclusive rights and extra ability to block competition, by using a provision of the law that is explicitly designated for diseases that will impact a small percentage of the population?

The whole thing appears to be blatant abuse of the system by Gilead to get an extra boost at the expense of the public on what may be the most promising treatment for COVID-19. The FDA should answer why it approved this designation, despite it obviously being an abuse of the process -- and, at the very least, Congress should close this loophole, or we're going to see drug makers getting this designation on basically every new disease, no matter how widely it will target the population.

Filed Under: covid-19, exclusivity, fda, orphan drugs, remdesivir
Companies: gilead sciences


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  1. identicon
    Anonymous Coward, 25 Mar 2020 @ 6:42pm

    Re: Actual slavery as a business model?

    If only. For now demonizing the illegals they employ is an imperfect stopgap.


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