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Putting a Price on Your Life

A trend of ultraexpensive drugs for rare diseases is spurring concern that patients may be priced out lifesaving treatments and causing concern among those who pay for such drugs, according to an article published this past weekend in The New York Times.

Amid scientific advances and government incentives and tax breaks, there has been an uptick in the development of drugs that treat, and in some cases cure, diseases that were previously fatal. And, as generic drugs take a bite out of market share for biopharma firms, some of the world's biggest drug companies have turned to gene therapies and rare-disease treatments as a way to drive profits. With no generic competition for such life-saving treatments, drug firms can set whatever price they like, and there is little transparency in how they do that. As the Times article points out, many of these drugs are priced based on a patient's weight, which means the cost for an adult is much higher than for a pediatric patient.

 The paper specifically looks into the case of an Ohio woman taking Alexion Pharmaceuticals' Strensiq, which treats a rare bone disorder. The cost of the drug for the patient and two of her family members with the same genetic disease would have been roughly $6 million in 2018, putting a significant financial strain on her husband's union, which covers the cost of the drug. Because the drug would have to be taken indefinitely, it could have potentially cost the union $60 million.

For its part, Alexion defended the pricing of the drug, citing the risk of failure and cost of developing such unique, complex drugs. In addition, the drug firm said it is negotiating price caps with payors, and following pressure from the union and its pharmacy benefit manager, Express Scripts, it agreed to cap the annual cost of Strensiq at $1.5 million for each adult in commercial plans covered by Express Scripts.

Alexion has recognized around $1.3 billion in revenue from Strensiq since it acquired the drug along with its developer Enobia Pharma for roughly $1.1 billion in 2012. But, as the Times points out, its not even Alexion's top-selling drug. That distinction belongs to Soliris, a drug for rare immune and blood disorders, which generated more than $3.5 billion last year.