The Meriam-Webster Dictionary defines orphan drug as:
“a drug that is not developed or marketed because its extremely limited use makes it unprofitable”
Insurance companies keep raising their premiums in part because of the ever-increasing costs of billion-dollar orphan drugs.
Many pharmaceuticals for hard-to-treat malignancies are considered orphan drugs.
Orphan drugs are often life savers. Remember, the original intent of the legislation was to make such medications available for people who would otherwise die. Please recall that the FDA called these medications “significant drugs of limited commercial value.”
The National Organization for Rare Disorders (NORD), Congress and FDA officials who worked tirelessly to make the Orphan Drug Act a reality did not anticipate that it would provide a huge bonanza for the pharmaceutical industry. In 1983, no one could have imagined billion-dollar revenues on such medications.
Back in 1983 when Congress passed the Orphan Drug Act, the legislation was intended to create substantial incentives for drug companies to develop products to treat rare diseases. In those days, the pharmaceutical industry was reluctant to spend money creating products that would treat only a relative handful of individuals.
Pharma executives assumed that they would lose money on such medicines. They could not imagine charging hundreds of thousands of dollars for a course of treatment. They feared the American public would object to price gouging.
The Orphan Drug Act provided companies big tax incentives. In addition, they got years of market exclusivity. Other companies would not be allowed to compete, even if they came up with a better product. At the time, this seemed like a great deal for everyone. Drug companies wouldn’t lose a lot of money doing the noble thing by developing new treatments. People with unusual diseases would benefit from orphan drugs. It should have been a win-win!
“At the request of Kaiser Health News, Express Scripts, which manages pharmacy benefits, analyzed the orphan drugs on its approved list, or formulary. Four orphans cost more than $70,000 for a 30-day supply, or $840,000 annually. An additional 29 orphan drugs cost at least $28,000 for a 30-day supply, or more than $336,000 a year. At those prices, the revenue for a an orphan-drug maker can build up quickly: A $50,000 orphan taken by 50,000 patients could reach $2.5 billion in annual sales; a $300,000 orphan for just 5,000 people could hit $1.5 billion a year.”
Imbruvica (ibrutinib) is a drug for treating other blood cancers including chronic lymphocytic leukemia and small lymphocytic lymphoma. According to Drugs.com, each tablet costs nearly $600.
Even more astonishing is an orphan drug approved for treating Duchenne muscular dystrophy. The brand name is Exondys 51. It is one of the most expensive medications in the US with a price tag between $750,000 and $1.5 million annually for a single patient.
It is estimated that this rare muscle wasting disease affects about 14 in every 100,000 young men. Without insurance, hardly anyone could afford this treatment.
According to an article in Fortune (Feb. 7, 2020), a gene therapy for spinal muscular atrophy (SMA) costs more than $2 million per patient.
It is estimated that one person out of 10,000 experiences this rare genetic condition. A competitive drug, Spinraza, costs as much as $750,000 the first year and $375,000 each subsequent year.
Drug company executives learned that no one would hold them accountable for sky-high prices. It has figured into their planning for years. According to a joint investigation by Kaiser Health News (KHN) and NPR:“Seven of the 10 best-selling drugs in the country in 2015 were orphan drugs.” In that year, none earned less than $3 billion in sales.
Other orphan drugs that were on the Top 10 Best-Selling Drugs list from KHN & NPR include: