Predictable and unexpected effects of orphan drug legislation
While the orphan drug legislation was designed to provide strong incentives for pharmaceutical development in neglected and rare diseases, the commercial rewards realized in a very rare (ultraorphan) condition, Gaucher disease, were unforeseen and unprecedented. The incentives have been keenly felt by several companies seeking similar trophies; they have sought also to position themselves in the field by acquisition.
Access and cost
There can be no doubt that the general outlook for patients with Gaucher disease and related lysosomal diseases for which enzymatic augmentation has been introduced (as well as initiatives involving small molecule inhibitors and chaperones) has improved immeasurably; these benefits extend only to those patients for whom insurance and national health care provision is available. Only a minority (≈10%) of patients with Gaucher disease worldwide are fortunate enough to have access to enzyme replacement therapy, principally because of the extreme cost of this ultraorphan treatment for each patient. To capitalize on its leading position and sustain a program of therapeutic development, Genzyme charges highly for products provided to only a few thousand patients internationally: the average cost to treat an adult Gaucher patient with enzyme therapy is of the order of £100,000 and in the early debulking phases of the illness, about £200,000 per annum.
Development costs
Although it is claimed that the introduction of a new biological drug may cost $500,000–$1,000,000,000, in the case of alglucerase (Ceredase) for Gaucher disease, the manufacturer reported spending less than $58M for development. However, we should remember that this was 20 years ago and the burden of costs was shared with academia. Given the prolonged marketing exclusivity awarded for the first introduction of an orphan agent of 7 and 10 years in the United States and Europe, respectively, the potential rewards for each corporate winner are high. While those developing biosimilar drugs must bide their time or demonstrate that their products have unequivocal therapeutic advantages, companies with an active discovery portfolio can steal an advantage if their drug has an innovative mode of action, as illustrated by the substrate inhibitors. Since it was first proposed, progress on gene therapy has been slow, even for monogenic diseases in which it clearly offers the potential for a definitive and specific cure. It is salutary to recall that more than two decades ago, the original scientific board of the corporation advised the management of Genzyme not to proceed with the development of enzyme therapy because gene therapy for the condition was so far advanced at the time. Perceptions of advantage and the real nature of competition in orphan diseases remain – as with all aspects of biotechnology – fraught with the foibles of human judgment and error.
Clearly, after a time, strong incentives also re-emerge for oncoming competitors with biosimilar protein agents, since by following the data of the innovator, development costs may be reduced to a scale of tens rather than hundreds of millions of dollars.
The value and safety implications of competition
We now also know that there is a previously unrecognized clinical advantage provided by alternative biological agents, for example velaglucerase-alfa and taliglucerase-alfa in Gaucher disease – a guaranteed safety of supply. The necessity of competing alternatives has emerged as a result of a catastrophic year-long shortage of Cerezyme, resulting from a vesivirus infection occurring in the dedicated bioreactor plant at the principal production facility of the Genzyme Corporation in Allston, Massachusetts, in June 2009.
80 At the time, although velaglucerase and taliglucerase were at an emerging stage of clinical development, their ready availability for several hundred patients in Europe and the United States has partially mitigated the crisis both for the patients and their treating physicians, as well as the prowess of the Genzyme Corporation. In the face of this crisis, many physicians and regulatory agencies worked with all the commercial partners to promote release of the new enzyme preparations through compassionate access programs before licensing to expedite the regulatory processes for licensing approval and to accelerate approval for distribution in the United States, Europe, and other regions, wherever possible.
The competitive niche
Biological treatments, such as enzymatic augmentation in lysosomal disorders, can be challenged by competitive small molecules, as has been convincingly demonstrated in Gaucher disease. The innovation of substrate depletion therapy with biosynthetic inhibitors of the principal glycolipids, which accumulate in macrophages, provides an attractive scientific and pharmaceutical alternative. Not only are such compounds more readily distributed and administered, but their mode of action is distinct and a compelling advantage in competition.
Other powerful advantages include the generally cheaper manufacturing costs of small molecular compounds, as compared with human enzyme preparations, which in the case of Gaucher disease require elaborate modification to ensure appropriate targeting to the affected tissues (macrophages) in vivo. While the Actelion drug, miglustat (Zavesca), is currently seen as a second-line agent for Gaucher disease,
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63 its inception clearly directed Genzyme to innovative departures, based on a distinct chemistry. Genzyme has made a large investment through numerous patents on the synthesis of its novel ceramide-like selective inhibitor of a novel biochemical target; and one wonders if it would have done so had a competing orally available agent with a novel mechanism of action not come to light.
In relation to pharmacological chaperone therapy, as yet in an undeveloped phase for clinical practice, it can be seen that the innovative drive and incentive for developing new therapies in Gaucher disease is pervasive and strong. Without it, much pharmaceutical development for needy patients with disorders otherwise lacking specific measures would not have occurred. While enzyme replacement therapy undoubtedly provides large measurable health gains for adults and may prevent disease if given sufficiently early in children, we must recognize that some accommodation is needed in our appreciation of pharmaceutical ‘miracles’. After all, if all rare diseases mandated such enthusiastic pharmaceutical interest, the costs of diverting health care resources to swell the revenues of pharmaceutical companies could not be sustained.
Pricing issues
The prices set by pharmaceutical companies for their drugs are arrived at by complex and obscure means, but are justified by the need to cover the costs of production and accompanying investment in the light of competing agents. The perception of health benefits is also an important factor in price setting. The need to generate profit is an unqualified but critical factor. In the case of orphan agents, the unmet need is construed as very high and unchallenged, for there is by definition no competition which would otherwise mitigate pricing. Although biological agents notionally would be expected to be very costly, the economy of scale and long-standing marketing exclusivity with, for example, the production of a genetically engineered protein from cell cultures quickly allows an astonishing profit margin to be achieved.
Issues of marketing exclusivity
Gaucher disease provides here another vivid example, not only of the triumph of Western capitalist principles of utility and progress linked to profit, but of a market exclusivity of another kind. For such are the prices of the drugs developed in Western democratic countries that the public health care systems of other populations do not even aspire to meet them. It will be recalled that Stalin commuted the salaries of doctors and other health care personnel greatly: even after the fall of Stalin and two decades after the collapse of the Communist system in Russia and post-Soviet states, exiguous salaries and investment have given rise to appalling state provision for health. At the same time, private medical services for party members and emerging plutocrats in Russia and many former Communist countries aspire to the best international standards of delivery and comfort. Under these circumstances, for many patients, access to expensive treatments such as Cerezyme for Gaucher disease is either denied or highly restricted.
Compassionate supply
The problem of access has been commendably addressed in the divisional locations of Genzyme in capitalist countries by the introduction of free compassionate use programs for severely ill Gaucher patients resident in communities where health care systems do not reimburse the costs of lifesaving therapy. However, this does not address the total need of Gaucher patients worldwide, for it is estimated that of the 5000 or so patients who have been treated with Cerezyme (until the recent shortage caused by vesivirus infection and shutdown of Genzyme’s Allston plant
80), this would represent a maximum of 10% of all symptomatic Gaucher patients.
Orphan drug pricing
While the high cost of manufacturing biological agents has the appearance of veracity, one should also expect the competing small molecules to be made available at costs that are substantially less than those for enzyme therapies. There is only one example for a direct comparison, namely Zavesca, at a cost of ~$100,000 per year for an average adult. It is thus clear that incentive and shareholder revenue overshadow the costs of manufacture for nonbiological agents even in the orphan drug field.
The concept of ‘pile them high and sell them cheap’ has yet to emerge among the competitors of first-to-market orphan drugs, but where access remains difficult for many patients in less developed countries, this heretical idea arguably merits consideration.