(Page 2 of 2)
show a benefit, the agency could pull eteplirsen from the market.
In the meantime, Sarepta is likely to start cashing in. Joseph Schwartz, an analyst at the research firm Leerink, recently estimated in a note to investors that worldwide sales of eteplirsen could eclipse $900 million annually.
That figure is due more to eteplirsen’s high price tag than the number of patients Sarepta is likely to treat with the drug. Pricing is already a hot topic, partly because of two companies—Mylan (NASDAQ: MYL) and Turing Pharmaceuticals—that have come under fire for exorbitant price hikes on old treatments. Marathon’s Cunniff says others are unfairly being lumped in.
“Some of those actions are giving rare disease drug developers a black eye,” Cunniff says.
Dan Brennan, who advises pharmaceutical and medical device companies, agreed. It will be important for patients to distinguish between companies that are “just jacking up the price,” Brennan says, versus those that charge high prices for the truly innovative work they’ve done. As an example of the latter, he cited sofosbuvir (Sovaldi), a hepatitis C drug sold by Gilead Sciences (NASDAQ: GILD). Sofosbuvir was the first of a new wave of therapies that cured the liver disease faster, and with fewer side effects, than previous treatments. Yet Gilead was admonished for pricing a standard course of treatment at a sticker shock-inducing cost of $84,000.
Drug companies can charge even higher prices for rare disease treatments because of the small number of patients and the lack of available therapies, and as Xconomy wrote last week, they’re rarely challenged by insurers as a result. Eteplirsen, for example, will cost an average of $300,000 a year, per patient, despite the fact that it hasn’t yet proven, in clinical trials, that it benefits patients—and many expect that payers won’t stand in the way. The issue was perfectly crystallized by Kathryn Wagner, who directs the Center for Genetic Muscle Disorders at the Kennedy Krieger Institute in Baltimore. Last week, Wagner called Sarepta’s drug “horrendously expensive,” but said she still plans to prescribe it to Duchenne patients because of the lack of available options, the devastating nature of the disease, and the seemingly minimal safety risks of the drug.
Though not referring to eteplirsen or Sarepta, one panelist Tuesday argued that the ability to charge high prices is necessary for drug companies to continue to make important advances.
“Greed spurs innovation,” says Erik Eglite, chief compliance officer and corporate counsel at Marathon. “It’s my philosophy that wonderful things can come from [pharmaceutical] companies and somebody’s greed. People go and out do things. They create…fantastic companies, and all of society benefits.”