Two weeks ago,
in this blog, I noted that new drug development was largely focused on the development of treatments for diseases that afflict fewer than 100,000 people. This includes specific cancer genotypes and circumscribed phenotypes as well as disorders that are classified as “rare diseases.”
This focus represents a major sea change for the industry. For most of the last 40 years, pharmaceutical companies aimed to introduce new drugs for diseases that were prevalent in the general population. But in recent years, payers put up roadblocks — simply because the diseases were so common. If the annual cost per patient was less than $5,000, but millions of people needed treatment, expenditures would be enormous, and thus, payers rebelled. They rebuffed the new drugs by requiring that patients first receive old inexpensive drugs, even if they were less effective or had more side effects. Additionally, physicians who wanted to prescribe new drugs faced serious preauthorization hurdles.
But payers do not put up obstacles when diseases are rare, even when a new treatment is priced at more than $400,000-$800,000 per year (or per dose!). If the number of afflicted patients is small, the total expenditures for each newly introduced drug are relatively small. So payers agree to cover the cost, especially since old generic drugs for rare diseases do not exist.
The end result is that pharmaceutical companies — large and small — are focusing their efforts on tiny numbers of patients — a focus that I will label as emergence of “therapeutic microdomains.”
Let me state emphatically that the scientific thinking process underlying the development of new drugs for many of these microdomains has been jaw-droppingly brilliant. And, of course, offering patients with a rare incurable disease an opportunity for a life-changing treatment is priceless. Many would argue that such astute innovation and patient benefits warrant premium pricing.
But some strategies targeting therapeutic microdomains are likely to raise your eyebrows.
Take, for example, the development program for Tremeau Pharmaceuticals. According to their website, Tremeau has only two drugs under development, both for an orphan indication — rofecoxib and etoricoxib.
If the names of these drugs sound familiar, they should. Both drugs are selective COX-2 inhibitors. They are in exactly the same drug class as celecoxib (Celebrex). These drugs have been prescribed for the relief of arthritic pain for 20 years.
Both rofecoxib and etoricoxib were developed and have been marketed by Merck & Co. Before 2004, rofecoxib was one of the most widely prescribed drugs in the US and marketed under the trade name of Vioxx. Vioxx was withdrawn when it was found to increase the risk of serious cardiovascular events.
Etoricoxib is currently marketed by Merck in over 80 countries worldwide under the trade name of Arcoxia. In 2007, the FDA declined to approve it for use in the U.S. due to concerns about its potential for cardiovascular toxicity.
Now it is 2018, and
Tremeau Pharmaceuticals is developing both drugs, with the intent of gaining FDA approval for use in the US.
Rofecoxib is now called
TRM-201, and is being developed as a treatment of arthritic pain, specifically in patients with hemophilia, who commonly need opiates.
Etoricoxib is now called
TRM-359, and is being developed for “a serious pediatric orphan disease for which high-potency opioid therapies are the only available therapies.” The pediatric disorder is not identified.
Do these examples truly fulfill the spirit of an orphan indication?
Let’s face it; these drugs are not novel. Tremeau did not synthesize them or carry out their large-scale development programs. Both drugs have been extensively studied and have been prescribed for years to millions of people at a cost of about $3 per dose or less. This is about what Celebrex currently costs in the US, and it is still on the market.
If TRM-201 and TRM-359 are eventually approved for use for their respective orphan indications, do you think that they will be priced at $3 per dose?
Here is my uninformed guess — these not-so-new drugs will be priced at about $600-800 per day. If I am right, one wonders: Is the cost an appropriate reward for scientific innovation? Or is it simply a way for the company to capitalize on a shrewd decision to repackage these drugs for an orphan indication?
I expect Tremeau will have its own point of view, and I am looking forward to hearing it. I am confident that they will say that the price of the drug has not been determined, that new clinical trials will carry a significant cost, and that there is an unmet medical need for special populations. All these statements are certainly true.
But if my prediction about pricing is also true, it will be interesting to see how two old drugs can be re-envisioned to focus on a tiny sliver of its original target population, and as a result, be made available at more than 100 times their original price. (Don’t forget that Celebrex is available as a generic, and last week, an FDA Advisory Committee concluded its cardiovascular risks are no greater than those of naproxen or ibuprofen.)
I want to hear from you. We know that our incentive system is a total mess.
But do you think what Tremeau’s drugs represent innovation or opportunism? Or something else?
Milton Packer MD recently consulted for Actavis, Akcea, Amgen, AstraZeneca, Boehringer Ingelheim, Cardiorentis, Daiichi Sankyo, Gilead, Novo Nordisk, Pfizer, Sanofi, Synthetic Biologics and Takeda. He chairs the EMPEROR Executive Committee for trials of empagliflozin for the treatment of heart failure. He was previously the co-PI of the PARADIGM-HF trial and serves on the Steering Committee of the PARAGON-HF trial, but has no financial relationship with Novartis.
