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.
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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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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.