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


Reader Comments

Subscribe: RSS

View by: Time | Thread


  • icon
    Anonymous Anonymous Coward (profile), 24 Mar 2020 @ 7:39am

    Why?

    Even though Gilead had little or no cost in the development of the drug, the cost of applying for patents for things they did not create is...extraordinary. Besides, the CEO at Gilead read about the AT&T CEO getting a record compensation here on Techdirt and became exceedingly jealous. But, in order to justify the breaking of compensation records anew he needs something spectacular to show the board. Things are status quo in the world of Wall Street influenced, quarterly results oriented public companies. Opportunities must not be missed.

    /s unnecessary but for the few, the proud and the agenda motivated

    reply to this | link to this | view in chronology ]

  • identicon
    SirWired, 24 Mar 2020 @ 9:48am

    Most of the money/risk is not in the initial compound

    It makes sense that the patent will be held by the company that brought a drug to market, not the agency/organization that developed the initial compound.

    Compounds are usually patented even before it hits clinical trials Most compounds fail to reach even that stage, and of those that enter trials via an IND, an astounding 90% never make it to being an approved drug. (Your average large drug company will have thousands of unused compounds in their library, most of which are, and will remain forevermore, useless.)

    It costs relatively little to develop a compound; it's a common low-$$$ project for NIH grants. Most of the money (and therefore risk) that goes into the development is in the clinical trial process; the initial compound development is a worthy task (and one well-suited for government funding), but unless those trials (with all the cost and risk) are also government funded, it makes sense that most of the reward will go to whomever brought the drug to market.

    I'm not saying the Gilead isn't trying to pull a fast one here, just that some of the outrage is misplaced. The fact that the compound was originally developed through a govt. grant doesn't detract much from what we'd expect Gilead to collect on selling the drug.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 24 Mar 2020 @ 10:09am

      Re: Most of the money/risk is not in the initial compound

      It costs relatively little to develop a compound;

      For an individual compound maybe, but drug development requires the development and examination of thousands of compounds to find the few that are worth looking at for clinical effectiveness.Most compounds never make it out of the lab where they were developed.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 24 Mar 2020 @ 10:11am

      Re: Most of the money/risk is not in the initial compound

      Not to mention the fact that Gilead is just following the legal processes set forth by the officials that we elected. It's not like they are doing anything illegal. The real beef is with the American voting public for continually electing officials who don't accurately represent the wishes of the people that elected them.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 24 Mar 2020 @ 10:49am

        Re: Re: Most of the money/risk is not in the initial compound

        "Not to mention the fact that Gilead is just following the legal processes set forth by the officials that we elected."

        They are following the legal process they and other pharma companies bribed our elected officials to set forth, you can call it lobbying all you want it's just bribery.

        reply to this | link to this | view in chronology ]

        • identicon
          David, 24 Mar 2020 @ 12:34pm

          Re: Re: Re: Most of the money/risk is not in the initial compoun

          They are following the legal process they and other pharma companies bribed our elected officials to set forth, you can call it lobbying all you want it's just bribery.

          U.S. citizens are allergic against anything that would impact capitalism, the view that all the power in the world belongs to the rich since they have shown themselves deserving of it.

          You can call it bribery all you want, it's just the squeaky wheel getting the grease until it stops squeaking. As long as few people make decisions affecting a whole lot more people, it will always be more effective giving money to those few people who feel that the depth of their pockets is representative for the community's needs.

          reply to this | link to this | view in chronology ]

    • icon
      Scary Devil Monastery (profile), 26 Mar 2020 @ 3:40am

      Re: Most of the money/risk is not in the initial compound

      "It makes sense that the patent will be held by the company that brought a drug to market, not the agency/organization that developed the initial compound."

      Nope.

      Bear in mind that patents and copyright are given legal status exclusively to further progress of science and the arts. When the marketer rather than the developer is given the protection all you do is incentivize the actual developers NOT to actually develop anything.

      Any and all arguments in favor of medical patents tend to boil down to an attempt to deny the fact that vested interests want to use patents as a legal hammer to restrict invention rather than further it because a lot of money is riding on it.

      So Gilead is indeed trying to pull a fast one, and the outrage is not at all misplaced. If anything it's a wonder that the outrage is this late in coming, only hitting when the business-as-usual practice was applied in a way which would affect the ability to combat an actual pandemic.

      It's a bit as if you have a practice of picking people's pockets and stealing their wallets. That the outrage only happens once you get caught doesn't justify the times you managed to get away with it.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 24 Mar 2020 @ 9:48am

    I recently heard someone say that the entire medical system in this country is severely broken and that the FDA and PTO bear a significant portion of the responsibility for the sorry state of affairs. I wonder where they got that crazy idea.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 24 Mar 2020 @ 10:20am

    Regulatory Capture

    Gilead and other drug companies control the FDA, not the other way around.

    reply to this | link to this | view in chronology ]

  • icon
    rangda (profile), 24 Mar 2020 @ 10:20am

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

    Because not doing so would make them guilty of the capital crime of denying a corporation all the monies.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 24 Mar 2020 @ 10:24am

    Is there any company involved in the drug industry, the telecomes industry or broadband that doesn't take the piss out of everyone and seems to get the blessings of the government and various bodies, always taking money that comes from the publics tax purse, money that could be used to do so much good in other areas? Greed and bribes work wonders, i guess!

    reply to this | link to this | view in chronology ]

  • identicon
    rajasimha, 24 Mar 2020 @ 11:30am

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

    Because not doing so would make them guilty of the capital crime of denying a corporation all the monies.

    reply to this | link to this | view in chronology ]

  • icon
    Upstream (profile), 24 Mar 2020 @ 12:02pm

    Isn't there some corollary or variation of Poe's Law about government agencies or regulations going so far off the rails that they cannot be parodied?

    If not, there should be.

    And I think the above "Global Pandemic (and US pandemic) / Orphan Drug Status" situation would be a good example of the corollary. Particularly when you consider:

    1) This hockey-stick bar chart of US cases. Projecting from the chart it will just be a few more days until the magic 200K number is reached.

    2) And that the bar chart only shows diagnosed cases. There are certainly many more (possibly several times more) cases that have yet to be clinically diagnosed.

    3) And the fact that there is also a large, but unknown, number of cases that will never be clinically diagnosed because they present as asymptomatic or only mildly symptomatic. However it is currently believed that these cases still contribute to the spread of the virus.

    reply to this | link to this | view in chronology ]

    • identicon
      David, 24 Mar 2020 @ 12:38pm

      Re:

      3) And the fact that there is also a large, but unknown, number of cases that will never be clinically diagnosed because they present as asymptomatic or only mildly symptomatic. However it is currently believed that these cases still contribute to the spread of the virus.

      So? If we don't get to test them (because the U.S. has fabricated an utter lack of test availability) and they are mostly asymptomatic, they aren't part of the market for a cure.

      Ergo: orphan drug status.

      Particularly as Trump is pondering lifting all restrictions. The pandemic will be over so fast that nobody will be interested in purchasing a cure while they are burying their relatives and friends.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 24 Mar 2020 @ 12:42pm

    China already made statements that the aids drug Remdesivir was not effective in their trials, but found Japanese drug Avigan was effective in reducing the most severe symptoms of fever and respiatory distress in a few days as opposed to no treatment letting the virus be defeated by immune response alone. Not any mention of this possibility of treatment from the Federal government is extremely excriciating.

    https://www3.nhk.or.jp/nhkworld/en/news/20200318_36/

    reply to this | link to this | view in chronology ]

    • identicon
      David, 24 Mar 2020 @ 2:32pm

      Re:

      A number of drugs will get peddled as the universal savior in succession. That's not unusual: same thing happens with penny stocks all the time. Buy in, spread rumor of humongous value, cash out, rinse, repeat.

      If there were something to it, there would be more pickup.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 24 Mar 2020 @ 5:12pm

    Death to everyone involved in the scam. Its the only effective way to curb abusive profiteering like this in time of crisis. That orphan clasification scam is enough bad faith to kill all Gilead's patents.

    The rich need to be regulated hard or disposed of, they clearly have earned both.

    reply to this | link to this | view in chronology ]

    • This comment has been flagged by the community. Click here to show it
      identicon
      Anonymous Coward, 24 Mar 2020 @ 6:38pm

      Re:

      Socialist philosophy on full display here. The laziest and stupidest of the population threatening the most intelligent and creative. Classic. Have at it idiots, it’s entertaining while I sit at home in my hot tub with a whisky and cigar.

      reply to this | link to this | view in chronology ]

      • icon
        Scary Devil Monastery (profile), 25 Mar 2020 @ 3:56am

        Re: Re:

        "The laziest and stupidest of the population threatening the most intelligent and creative. "

        Your adoration of what appears to be a fraud scheme meant to profit from actual deaths is duly noted. If not applauding Gilead's actions is considered "socialist" then any sane society needs more of that.

        Let me guess, anyone who thought Martin Shkreli acted like an asshole is similarly a commie pinko according to you as well? Where do you alt-right asshats draw the line, i wonder. Actual slavery as a business model?

        reply to this | link to this | view in chronology ]

        • 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.

          reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 26 Mar 2020 @ 8:41am

        Re: Re:

        sitting home in a hottub with a whiskey and cigar..

        Good thinking, prepping your immune system for the virus!

        reply to this | link to this | view in chronology ]

        • icon
          Scary Devil Monastery (profile), 27 Mar 2020 @ 7:48am

          Re: Re: Re:

          Haven't you heard?

          According to the alt-right covid-19 is just a democratic hoax planted by the deep state to make Trump look bad and the eggheads look smart.

          reply to this | link to this | view in chronology ]

    • icon
      That One Guy (profile), 24 Mar 2020 @ 8:04pm

      Re:

      Bad enough that there's scum out there that are showing utter indifference to the suffering and death brought about by the pandemic, calls to add to the pile of bodies are simply not acceptable or helpful.

      reply to this | link to this | view in chronology ]

      • This comment has been flagged by the community. Click here to show it
        identicon
        Anonymous Coward, 24 Mar 2020 @ 9:09pm

        Re: Re:

        Are you outraged? How outraged are you? Tell us more about your outrage, please. OUTRAGED OUTRAGED OUTRAGED!! More OUTRAGED! On and on! Forever! Yay socialistic outrage!

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 24 Mar 2020 @ 7:04pm

    ArsTechnica has a much better write-up and explanation of this process. In particular their article notes that the "Designated" phrasing simply means that NIH has received Gilead's application to label remdesivir as an "orphan drug" for COVID-19. Once a drug has been given the "Designated" label that means the company can conduct trials and keep track of their expenses...

    Also of note is that NIH tries to respond to applications of this sort within 90 days of receipt and at this point in the process that application has had no review. So the "Designated" label pretty much means nothing.

    The actual thing to watch for is the "Approved" designation. Once the drug is an "Approved" orphan drug for the disease all the money spent on trials now becomes tax deductible and the company gets exclusivity on marketing this particular drug for this particular disease for 7 years. Running concurrently with any sort of patent exclusivity if there still is any. Approval of drugs for the orphan label is time-intensive and not particularly common. Of the 5300 applications for orphan drug labels less than 900 have been approved and it usually takes years before the approval comes through.

    Basically this designation is Gilead telling NIH that they think remdesivir might have some promise as a COVID-19 treatment and they would like to conduct trials and if it works have the money they spent on trials become tax deductible.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 25 Mar 2020 @ 1:04am

      Re:

      China reported that Remdesivir was NOT helpful in reducing the symptoms of Coronavirus.

      reply to this | link to this | view in chronology ]

      • icon
        Scary Devil Monastery (profile), 25 Mar 2020 @ 3:59am

        Re: Re:

        "China reported that Remdesivir was NOT helpful in reducing the symptoms of Coronavirus."

        Which may, or may not be true. China has effectively ensured that where COVID-19 is concerned it has about the same credibility as the US white house press releases.

        reply to this | link to this | view in chronology ]

        • identicon
          Anonymous Coward, 25 Mar 2020 @ 9:57am

          Re: Re: Re:

          Its a rule of thumb during a glibal pandemic that has the potential for millions of death to check out all the facts. Doing so may save millions of lives.

          reply to this | link to this | view in chronology ]

          • identicon
            Anonymous Coward, 25 Mar 2020 @ 10:08am

            Re: Re: Re: Re:

            Unless chisling down the population is what is going on here. Anyone NOT CHECKING ALL THE FACTS looks mighty suspicious to me.

            reply to this | link to this | view in chronology ]

            • icon
              Scary Devil Monastery (profile), 27 Mar 2020 @ 7:52am

              Re: Re: Re: Re: Re:

              "Unless chisling down the population is what is going on here."

              You DO realize that there is no actual magic which will ensure the potential triggermen of this hypothetical plot of yours won't get hit by this plague as well?

              Especially so since the old white farts usually credited with being at the point of such conspiracies are at the highest risk of death.

              "Anyone NOT CHECKING ALL THE FACTS looks mighty suspicious to me."

              Those FACTS being that it would take an insane person to use a bioweapon which can't be targeted and is likely to mutate as a tool and a very very dumb person to use something as inefficient for the purpose as SARS-CoV-2?

              Pretty sure when people think "Conspiracy mastermind" they aren't thinking about The Rain Man.

              reply to this | link to this | view in chronology ]

          • icon
            Scary Devil Monastery (profile), 26 Mar 2020 @ 3:42am

            Re: Re: Re: Re:

            "Its a rule of thumb during a glibal pandemic that has the potential for millions of death to check out all the facts."

            Which is why I'm waiting for a research source of actual credibility to verify the Chinese allegations.

            reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 25 Mar 2020 @ 1:07am

      Re:

      The world is going to see a lot of pharms jockeying for position around this new immerging market.

      reply to this | link to this | view in chronology ]

      • identicon
        JWL, 25 Mar 2020 @ 7:19am

        Re: Re:

        "Los Angeles, CA, March 25, 2020 (GLOBE NEWSWIRE) -- Endonovo Therapeutics, Inc. (ENDV) ("Endonovo" or the "Company") today announces the intent to distribute of SofPulse® investigational units to Hospital Intensive Care Units across the United States to help mitigate severe respiratory inflammation observed in some COVID-19 patients."

        This is another company that seems to be trying to do the right thing. Admittedly, this comes from a press release and will only have glowing information, but, it appears that there is factual evidence for it's effectiveness.

        reply to this | link to this | view in chronology ]

  • icon
    Mike Masnick (profile), 25 Mar 2020 @ 10:39am

    Surprise: Gilead giving up the designation...

    Story to come soon...

    reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 25 Mar 2020 @ 4:58pm

        Re: Re: Surprise: Gilead giving up the designation...

        Maybe we should apply public pressure against the deadly statin drug scam killing people very subtley. Those pharmas should be hanging by their necks.

        reply to this | link to this | view in chronology ]

        • icon
          Scary Devil Monastery (profile), 26 Mar 2020 @ 3:46am

          Re: Re: Re: Surprise: Gilead giving up the designation...

          "Those pharmas should be hanging by their necks."

          Yes and No.

          The pharmas are, at the end of the day, not beholden to anyone other than their shareholders. It's neither surprising nor exceptional that they'll go to any length which the law allows to make profit.

          So. How do we make it so the congressmen and senators making this sort of scummy shit lawful get hung out to dry? THAT is the real question.

          reply to this | link to this | view in chronology ]

          • identicon
            Anonymous Coward, 26 Mar 2020 @ 9:40am

            Re: Re: Re: Re: Surprise: Gilead giving up the designation...

            Statin drugs kill people over a period of several years. The most powerful of the statin drugs are manufactured from the actual toxins from certain fungii instead of a synthetic fabrication. Not everyone can even tell they have been poisoned by the statins they were prescribed years ago, but slowly their tissues are reduced and cell replication is stopped. Over a thousand scientific studies have shown direct corellation to many illnesses from Neuropathy, Diabetes and massive muscle loss to eventual slow debilitation of vital organs to death.

            reply to this | link to this | view in chronology ]

            • icon
              Scary Devil Monastery (profile), 27 Mar 2020 @ 8:04am

              Re: Re: Re: Re: Re: Surprise: Gilead giving up the designation..

              "The most powerful of the statin drugs are manufactured from the actual toxins from certain fungii instead of a synthetic fabrication."

              You mean, exactly like penicillin?

              "Over a thousand scientific studies have shown direct corellation to many illnesses from Neuropathy, Diabetes and massive muscle loss to eventual slow debilitation of vital organs to death."

              The side effects are quite well documented. Which is why drugs interfering with fundamental biochemical processes are never to be considered a first resort.

              Two smoking guns here, without any further need to look for a guilty party:

              1) The US AMA - American Medical Association - which has been observed, censured, and convicted in a great many cases of advocating the use of high-cost treatments and drugs in order to empty the average medical insurance plan as quickly and efficiently as possible.

              2) The general american diet. Honestly, that statin medication - to be used only in patients considered at extreme risk of cardiac arrest - has become a common default procedure in the US only tells us that having the highest obesity index on the planet isn't very healthy.

              So, who to blame? The pharmas for doing exactly what they were expected to?
              Or the high proportion of the US public who thinks a daily individual intake of enough sugar and fat to feed a small village in the developing world for a week is normal and as a result end up having emergency medication prescribed to them as if it was aspirin?

              reply to this | link to this | view in chronology ]


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)

Close

Add A Reply

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
Special Affiliate Offer

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

Email This

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