Searching for Solutions

A very interesting article at Wired.com from Portfolio.com about the conundrum created by a policy tool meant to encourage pharmaceutical companies to research and develop “orphan drugs.”

The Orphan Drug Act grants orphan drug status to pharmaceutical companies and “is designed to encourage the development of drugs which are necessary but would be prohibitively expensive/un-profitable to develop under normal circumstances.”  Past developments have included drug treatments for such conditions as cystic fibrosis and multiple myeloma.

The result can be high-priced treatments for rare conditions. From the article:

Politicians say they are not opposed to drug companies earning strong returns on the costs of researching innovative drugs, and understand the high prices of many medications. But they are investigating whether some companies are price-gouging, concerned more about executive stock options than about running innovative companies.

But the sometimes prohibitive costs of orphan drug treatments is, as you may have guessed, too expensive—to the point where insurance companies may deny payment.  The article provides an example of an already-developed drug that jumped from a cost of $1,600 per vial to $23,000 per vial after it was granted orphan drug status.

There’s some perfunctory pharmaceutical company decisions resulting from the orphan drug status that you can read about in the article.

But here’s the interesting part.  The prohibitive cost of the orphan drug spurred a doctor to search for lower cost solutions.  And he found one with comparable efficacy.

Curiously, though, he found that the price hike “was one of the best things that could have happened.” Why? “Because we found something better and cheaper.” Far cheaper, it turns out. “We spent a few days going through all the medical literature, looking for what works, what doesn’t.”

The cost of the alternative treatment? $15.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s