Number of Orphan Drugs Increases, but Costs High for Consumers

The Hartford Courant on Sunday examined orphan drugs -- those that treat disorders affecting fewer than 200,000 people -- which are "one of the fastest-growing areas in pharmaceuticals" and can be "extraordinarily costly" for consumers. The drugs often are extremely expensive because they are developed for a small pool of patients and "because developing any new medication is a long, risky and costly undertaking," the Courant reports. The pharmaceutical industry estimates that the cost of developing a drug costs $800 million from inception to human clinical trials, and only 30% of experimental drugs ever receive FDA approval. As a result, "when it comes time to affix a price to an orphan drug, companies are eager to recoup their investment quickly," the Courant reports. The increase in orphan drug development activity can be attributed to a 1983 federal law that offers tax breaks and market exclusivity for such products, as well as the "realization by smaller pharmaceutical companies that the drugs represent a lucrative entrepreneurial niche," according to the Courant.

Orphan Drug Profiled
The Courant profiled the orphan drug Soliris, made by Alexion Pharmaceuticals. Soliris is designed to treat paroxysmal nocturnal hemoglobinuria, a life-threatening blood disorder that affects 10,000 people worldwide. The wholesale price for a year's treatment of Soliris is $389,000. Many people with the disorder are expected to receive their first dose of the medication this month, and health insurers are "in the early stages of evaluating their policy" on the drug, leading many patients to worry whether they will be able to afford it, the Courant reports. Bill Sidford, a participant in clinical trials for Soliris, said, "There's a lot of concern. Do you have to become indigent to afford it? Is it being priced so we can't receive it? Who has accessibility? Do you have to give up everything else to afford it? At this point, it's all conjecture." David Araten, an assistant professor of hematology at the New York University School of Medicine who has treated patients with PHN, said, "For patients who do well on this drug, it's like night and day. For them, it's going to be worth every penny, ... and I am certainly hoping the insurance company will fully cover the cost of this drug." Lindsay Shearer, a spokesperson for CIGNA HealthCare, in an e-mail wrote, "Whether or not a medication is categorized as an orphan drug does not determine our coverage policy. CIGNA covers FDA-approved medications consistent with their FDA labeling, according to the terms of the member's employer-sponsored health plan." Many health insurers have a $1 million lifetime expenditure cap, meaning a patient receiving Soliris at a cost of more than $300,000 a year likely would lose coverage after two years, according to Abbey Meyers, president of the National Organization for Rare Disorders (Podsada, Hartford Courant, 4/22).