Monday, May 13, 2013

What are the economics of rare disease research?

Also in this week's C&EN, Lisa Jarvis has a series of very interesting stories on rare diseases: their funding models, the regulatory hurdles and the families that have become advocates in Congress and in industry for their children. The story starts with a very affecting anecdote about some boys getting some medicine:
The boys have Hunter syndrome, a rare and fatal genetic disease caused by a deficiency in an enzyme that breaks down sugar molecules. The missing enzyme is just one of more than 100 housed in the lysosome, the cell’s waste bin. Today, some 50 different inherited diseases—known broadly as lysosomal storage diseases—are caused by genetic mutations that disable one of those enzymes. In Hunter syndrome, which affects only boys, the buildup of sugar molecules over time causes symptoms such as stiff joints, enlarged spleens, and difficulty breathing. For children like Justin and Jason, who have a form of the disease that affects the brain, the accumulation also causes a rapid decline in mental function. And it’s rare—just one in 155,000 boys are born with the disease. 
Elaprase replaces the missing enzyme, iduronate-2-sulfatase, buying the boys valuable time by shrinking their spleens and helping their heart and lungs function. Yet it won’t save their lives. Elaprase can’t get past the blood-brain barrier, the cellular security gate that protects our most complex organ, so it can’t stop the mental deterioration that will cause the boys to lose their ability to walk and talk. Most boys with Hunter syndrome die by age 15. 
Elaprase is also breathtakingly expensive. As his sons run in circles through the kitchen and living room, Jeff Leider holds up a small glass vial filled with clear liquid. “That’s, like, $10,000 right there,” he says, eying the bottle with a mix of awe and disbelief. Having two kids with Hunter syndrome who need several vials per treatment, the Leiders’ annual bill approaches $1 million. Deena’s insurance covers the bulk of the cost, and Shire, the drug’s manufacturer, takes care of the rest through a patient assistance program.
First, I cannot imagine what these parents are going through. Wow -- my heart breaks for them.

Second, I wonder how the pharmaceutical industry and the insurance companies will manage to work out this delicate interplay for these rare diseases. How can insurers bear these very high costs for modern pharmaceuticals, which seem to be astronomically expensive? Jarvis does note that the insurers seem be playing ball for now...:
But the naysayers were proven wrong. The Food & Drug Administration approved the drug in 1994, and Genzyme charged an unprecedented $200,000 per year. Although insurance companies balked at the cost, they eventually agreed to cover it. Companies like Genzyme ensured patient access by introducing assistance programs that helped families with potentially high copays.
Insurance companies are not exactly some of America's most loved corporations. That said, one wonders how long that they'll be able to afford these sorts of treatments -- especially if governments keep broadening mandates for insurance coverage and (perhaps rightly so) limiting their ability to extricate themselves from covering undesirable, unfortunate policyholders who happen to have rare diseases that are expensive to treat. (I suspect that, in reality, it's not a large enough group to put a hole in their margins too badly.)

Also, with this rare disease stuff, I wonder if this means that we're going spend more time and resources curing the rare diseases of the families who have the social capital to advocate for their sick loved ones than those who don't. Something tells me no. I suspect the overlap between "rare diseases of people who can advocate well" and "rare diseases that are tractable to modern pharmaceuticals" is very, very small and no larger than the overlap between "tractable rare diseases" and "rare diseases of people with little social capital." Probably a good thing, that.


  1. Rare disease research and funding are going to become very interesting indeed. I have to confess I have very little understanding of healthcare pricing and insurance companies. The other day I was listening to the tail end of an NPR segment where they were saying that bills for hospital procedures almost always have no relationship to the actual costs of the procedure. In addition what was even more bizarre was that in reality, even if your insurance pays for the procedure, they usually pay only a fraction of the actual bill to the hospital. Basically the number on paper just sounds made up. Is this true for drug costs as well?

  2. The Aqueous LayerMay 13, 2013 at 9:48 AM

    There are departments of really smart actuaries who factor in the potential medical costs versus the cost of a pharmaceutical in these rare diseases. Believe me, they are coming out in the black when you run that cost analysis, otherwise they wouldn't do it.

    And pharma would not work on these rare diseases unless they could charge a lot more due to the incredibly small patient populations.

    Without both of these two entities playing ball, these rare diseases wouldn't even be a consideration, as tragic and sad as that sounds. When joined the industry 20 years ago, no-one would have even considered working on Hunter's disease. At least these patients are getting a chance.

  3. I have a rare disease with nearly no academic literature on it beyond case studies. Last year's medical records, alone, were an inch thick - I had to print them out to take to a new doctor. The doc and I estimate around $1 million has been spent on diagnostics alone, along with all that time off and much frustration. And the worst is when I have a flare up, my doctor is unavailable to guide the hospital staff on treatment, and I'm incapable of telling them anything of use at the time.

    It makes me want to scream. There is no research being done because why would anyone fund it for something that only has 10 case reports in the literature? Why would any academic researcher study something if there is no guaranteed revenue stream of foundations, agencies or corporations, and if there are so few research subjects (and no animal models)? The best hope I have is for a cure of something FAR more common relating to my symptoms so that at least the symptoms can be treated.

    FWIW, I've been on a registry of patients with my illness for the last few years and have received 0 calls on research studies recruiting people. My doc, however, is writing a case study, so I guess that's something.

    So far all of the rare disease research I've seen has been applied to basic science that has other applications. For example, epigenetic studies, cytogenetic studies, etc. The work is not done just for the sake of that one rare disease. Yes, it's important research and we need to be able to answer basic research questions. In the current political/economic climate it's very difficult to get basic research questions answered unless they apply to something that a person not trained in science can view as concrete.