Managed Care Magazine Unleashes Attack on Orphans

  • by: Robert Goldberg |
  • 06/08/2017

If it’s not obvious from the title “Orphan Drugs: Way Too Many, Way Too Expensive” the essence of Joseph Burns article in Managed Care Magazine is: isn’t is terrible that drug companies – who neglected rare and tropical disease for decades to make money – are now making money developing drugs for conditions they were criticized for ignoring and for which the Orphan Drug Act was created. 

Burns article is based on the material and media accounts generated by a syndicate attacking rare disease groups and the Orphan Drug Act funded by Laura and John Arnold Foundation to the tune of $22.4 million. It is a network of left-leaning think tanks with a bias against the profitability of medical innovation, news outlets and patient advocacy organization that spread the anti-orphan message far and wide.   

The Arnold funded think tanks provide the Arnold-funded news outlets with factoids and quotes attacking orphan drug development and patient groups. The Arnold funding patient organization then provides the rest of the syndicate with grass roots outlet for even more quotes and opportunities to spread the message.   The advocacy group, Patients for Affordable Medicines, is run by David Mitchell who recently retired as a founder and principal of PR firm GMMB. 

Mitchell knows a little bit about being a front organization or a pass through for political advocacy: GMMB earned $236.3 million from Hillary for America 2016 and moved over $314 million in Obama ad buys during the 2012 election cycle.  It also runs a group called Waterfront Strategies that handles soft money, consulting and ad buys for a number of PACs. 

Burns fails to tell his readers of Mitchell’s past and present work as a conduit. Instead, he depicts Mitchell as a selfless crusader against “drug companies (that) are manipulating the law that created the orphan drug status.  Mitchell claims orphan drug development is mostly  “salami slicing” strategies—companies dividing diseases into smaller and smaller categories based on genetic and biomarker differences so their products can achieve the coveted orphan drug status.”

“This gaming of the system to cut and recut for different orphan diseases means they get to use the same drug for multiple orphan drug designations,” says Mitchell. “That needs to stop.”

Neither Burns or Mitchell offer any proof that such practices are hurting patients.   Instead, their beef with the fact that companies have the audacity to attempt ot make a profit. 
Burns notes: “some commentators have said the trouble starts with the law’s prevalence-based definition of a rare disease as a condition that affects fewer than 200,000 individuals. Because drug companies can now price orphan drugs at between $100,000 to $200,000 per patient per year, they need only 5,000 to 10,000 patients to hit the blockbuster mark of $1 billion in annual sales.”

Well yeah, that’s what the Orphan Drug Act is supposed to do: Encourage the development of new medicines for groups of patients that do not benefit from existing therapies.

But Burns – like most critics past and present – claims “the law’s intended purpose of encouraging the development of drugs for rare diseases has been undermined in various ways.”

Rather than provide evidence of how the act has been undermined, Burns just asserts: companies “are using the 1983 Orphan Drug Act to secure lucrative incentives and gain monopoly control of rare disease markets where drugs often command astronomical price tags”

Burns assertions of gaming and astronomical prices are without substance:

For instance, he fails to note the retail price of the top selling 10 orphan drugs are a bargain relative to lives lost, health care spending saved and productivity gained.  

Take Revlimid (used at various stages of multiple myeloma) as an example.  The true per patient cost – net of rebates, discounts, and other concessions – is about $78K per patient.  The median charge for a hospital stay is $82000.  

Revlimid sales in 2014 were about $4.4 billion.  But extrapolation of gains in life expectancy based on previous studies of the impact of advances in myeloma care on longevity suggests that each year the use of Revlimid and other novel treatments generate $22 billion in added value. 

Further, many other orphan drugs NOT reviewed by Burns treat extremely small populations and require continuing evaluation and expensive production activities. 

Of the orphan drugs approved since 2012, the average patient population has been under 2000. Nearly 80 percent of the new products or approvals were developed by small biotech companies that are losing money.  If Burns and the critics he channels thinks that punishing companies after they turn a profit will not affect orphan drug development, they should prove it, not force dying patients into a twisted social experiment. 

In addition to being upset about the handful of profitable orphan drugs, Burns claims that slicing and dicing (as he calls it) is an unfair way to make money.  He notes: “Herceptin, originally approved as a breast cancer drug, has gained orphan designation for pancreatic and gastric cancers because those cancers can now also be classified as HER2-positive and HER2-negative.” 

Burns cites an Arnold Foundation funded Kaiser Health News ‘study’ that highlights the number of orphan drug designations generated from existing medicines.  It is not a study, it is simply the same list of orphan drug designations and approvals the FDA generates with KHN’s negative spin added as narrative. 

It is true that there has been an increase in the discovery of markers for previously untreated tumors that are certainly fatal.  And it is true that companies are conducting clinical trials or engaging in data mining to establish benefit in other subpopulations.  KHN implies this is an immoral practice because profit is involved.  

As the FDALawBlog points out, in some cases, a single orphan drug designation can result in multiple periods of orphan drug exclusivity. There appear to be a growing number of cases where FDA has granted multiple periods of orphan drug exclusivity based on the same original orphan drug designation, and where the drug’s indication evolves into something new, shedding and subsuming the previous indication statement.”

The obvious ‘solution’ to this situation is to allow companies faster approval for a broad number of tumors with biomarkers.  FDA’s recent approval of Keytruda for all solid tumors with a specific mutation clears the path for this approach.  Martin Makary (who Burns quotes) suggests this conditional path as an alternative to the multiple exclusivities.  But the anti-orphan Arnold Foundation funded Jerry Avorn and Aaron Kesselheim has attacked the use of biomarkers as a watering down of science pushed by pharma funded patient groups. So my guess is that find a way to characterize THAT as profiteering.  Indeed, Kesselheim is behind the Arnold-funded effort to eliminate biomarker-based disease treatment from Orphan Drug Act designations. 

Burns and the anti-orphan movement suggest instead that orphan drug patent life should be shortened to allow for more generics. But that begs the question: as orphan drugs have gone generic, why haven’t the companies used their first to market exclusivity to engage in similar research?  If it is just slicing and dicing, why wouldn’t a generic company want a line extension?

The answer is supplemental approvals of any type require time and money that innovator companies invest and generics don’t. The FDA does not simply tack on additional patent life.  To obtain a period of orphan drug exclusivity for a drug that is otherwise the “same drug” as a previously approved drug (i.e., a drug containing the same active moiety and that is for the same orphan disease or condition), the sponsor must demonstrate that its product is clinically superior (by showing greater efficacy, greater safety, or by providing a major contribution to patient care) to the previously approved drug.” 

If Burns and the “experts” he quotes wants to repurpose generic Gleevec or Humira for an orphan use and not charge for it, they should set up a company and do so.  

Indeed, Burns and every other critic he cites in his repetition of how the ODA is used to make money ignores a very important point: “Generic competition is generally not thwarted because of the ability of an ANDA applicant to carve-out of its labeling (and thus avoid) a period of unexpired orphan drug exclusivity on the brand-name Reference Listed Drug.” 

The FDA can approve a generic version of the drug product for one or more uses even if, in the future, an innovator company develops another use that garners orphan drug exclusivity. 

Which means the generic version of the drug is on the market and can be used off-label.  

But the anti-orphan critics attack off-label use as a slick, often illegal way, of increasing sales. So that leaves people with rare diseases with a longer wait for medicines that would cost more to make and must rely on generic companies to invest in new indications once innovator drugs go off patent. 

I know people with rare diseases can’t live with that.  I wonder if Joseph Burns and the anti-orphan movement can. 


Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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