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The Good, the Bad and the Ugly Truth about Specialty Drugs
Drug Discovery

Recently, my colleague Linda Gorman wrote about Sovaldi, a new treatment for Hepatitis C that actually cures about 90 percent of patients taking it within three months. A regimen of this drug costs $1,000 per pill — or about $84,000 for a course of treatment. Despite its high cost, drug maker Gilead Sciences argues the lifetime costs of treating patients with Sovaldi are lower than older, less effective drugs that merely suppress Hepatitis C, as though it were a chronic condition. The ability to actually cure the disease is a huge bonus, which definitely bolsters Gilead Sciences’ argument. When deciding how to price Sovaldi, Gilead Sciences undoubtedly took the efficacy and cost of competing drug therapies into account. For example, a liver transplant can cost $600,000.

But what if Sovaldi merely held the disease Hepatitis C at bay, and only as long as it was taken regularly? What if Sovaldi had to be taken 6 days a week — year in and year out — at a cost of more than $300,000 per year? That is the type of question Joe Nocera tackles in a recent New York Times article.

Writing in the Times, Nocera actually discusses another wonder drug, Kalydeco, developed by Vertex Pharmaceuticals. Kalydeco targets a specific subset of people with the genetic lung disease cystic fibrosis. For this small subset of patients, the drug works wonders. According to the New York Times:

…it is the first drug that attacks not just the symptoms but the underlying cause of cystic fibrosis, a genetic lung disease that usually kills victims by the time they reach their 40s. It doesn’t work for every sufferer of the disease, but rather for a small subset — probably around 2,000 people — who have a specific genetic mutation that the drug targets. But for those it helps, it is life changing.

Nocera’s question isn’t about the merits of Kalydeco, or Sovaldi for that matter. His question is more basic: what happens when there are possibly hundreds of really good drugs like Kalydeco and Sovaldi on the market at costs that are a multiple of the average household income? What happens when there are millions upon millions of people who could benefit from a very expensive drug? The question isn’t an academic one. Although specialty drugs are currently only about 1 percent of prescriptions, they account for one-quarter of all prescription spending. By the end of the decade, that figure is expected to grow to nearly half of drug spending.

The premise of orphan drugs and many specialty drugs is they mostly treat only a small number of people. These drugs are expensive, and the cost is spread over a larger population when Medicare, Medicaid and health insurance covers them. Nocera argues that the day of reckoning will come when too many people stand to benefit and the aggregate costs grow too large. Yet, Nocera provides no answers — just food for thought.

By Devon Herrick

Courtesy – NCPA

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