The Promise and Cost of Precision Medicine: When Patients Become Gold Mines

One of the most exciting and significant developments in the field of medicine is the emergence of what has been referred to as “precision medicine,” or “personalized medicine,” or “targeted medicine.”  It has long been known that not all people respond to disease in the same way, and that not all people respond to treatment in the same way.  Given those facts, it would clearly by desirable to understand how an individual’s makeup, genetic or otherwise, affected both disease progression and response to treatment.  This approach has shown particular promise in the treatment of cancers where the patient’s genetic makeup can determine the particular course of the disease and the best means to treat it.  The Nature article Precision medicine: the foundation of future cancer therapeutics suggests an optimistic future for this approach.

“The concept and practice of precision medicine is a methodical and systematic movement aimed at defeating diseases such as cancer.  Cancer is a major focus of the precision medicine initiative and developments in precise and effective treatments could benefit many other chronic diseases. Precision oncology or precision medicine of cancer focuses on matching the most accurate and effective treatment to each individual cancer patient based on the genetic profile of the cancer and the individual. Because every single cancer patient exhibits a different genetic profile and the profile can change over time, more patients will benefit if therapeutic options can be tailored to that individual, thus avoiding the idea that ‘one-size-fits-all’ in terms of cancer treatment.”

The National Cancer Institute provides a description of Precision Medicine and a more detailed section on Targeted Therapy as well as a list of Targeted Cancer Therapies—drugs that have already been approved for use on cancer patients.

It is early in the development phase of these classes of drugs and it is not clear how successful they will ultimately be.  However, if this approach is fruitful, it is likely that healthcare will become much more expensive.  Drugs that can be sold to millions of people will tend to be cheaper than those that can be sold to tens of thousands.  This is not because of any efficiencies of scale nor does it have any relationship to the cost of drug development; it is because the market will only tolerate a finite amount of greed.  Drug companies realize that there are limits to what the country will pay.  Precision medicine will generate more and more drugs applicable to fewer and fewer patients.  The net result will be that drug companies will be able to claim high expenses coupled with life-saving benefits for a relatively few patients as justification for enormous prices for their products.

We already have in place a drug industry focused on providing specialized drugs for relatively small numbers of patients: orphan drugs.  An article in Bloomberg Businessweek by Benjamin Elgin, Doni Bloomfield, and Caroline Chen, When the Patient Is a Gold Mine: The Trouble With Rare-Disease Drugs, provides some insight into a business where practices can be rather unsettling.

Drug companies were once hesitant to devote resources to diseases that were rare and would offer few customers for any product they developed.  That changed when Congress passed legislation providing incentives for companies who would address this issue.

“To address neglected research areas, Congress in 1983 passed the Orphan Drug Act, which gave drugmakers federal grants, tax incentives, and seven years of marketing exclusivity for new rare-disease treatments (vs. three to five years of exclusivity for a more common new drug). In the ensuing 34 years, more than 600 orphan drugs have been approved in the U.S., compared with 10 in the decade before the law was passed.”

The incentives helped, but it was lax control of pricing that convinced drug companies that they could turn a low-demand product into a profit no matter how small the market.

“But government-protected monopolies, combined with desperate patients, led to today’s prices.  Genzyme Corp. started the trend in 1991 by charging $150,000 for a year’s supply of a drug for treating Gaucher disease, an ailment that weakens bones and internal organs. In 2016, Biogen Inc. began charging $750,000 for the first year of treatment with a drug called Spinraza, which targets a deadly muscle disease. ‘Many of these manufacturers have perceived it as essentially a blank check to price the drug where they think it’s reasonable,’ says Rena Conti, associate professor of health policy and economics at the University of Chicago.”

Orphan drugs went from being an afterthought to becoming a major component of the pharmaceutical industry.

“In the U.S., an orphan drug is defined as one that treats a disease affecting fewer than 200,000 people in the country. Orphan drugs accounted for a disproportionate share, 41 percent, of all medications brought to market in 2014, according to a study by Johns Hopkins University. Globally, sales of orphan drugs are expected almost to double, to $209 billion, by 2022, based on numbers gathered by Evaluate LTD., a life-sciences consulting company.”

“But orphan drugs have also caused a seismic shift in treatment costs. The average U.S. patient on an orphan drug last year relied on a $136,000 therapy, a figure that’s climbed 38 percent since 2010.”

The authors used the drug company Alexion as the subject of their story to illustrate what life was like for a producer of drugs with a relatively small market. Alexion produces Soliris which is useful in treating conditions that go by the acronyms PNH and aHUS

“….Alexion Pharmaceuticals Inc., the New Haven-based maker of Soliris—one of the world’s most expensive drugs, typically priced from $500,000 to $700,000 a year.”

Soliris is a very effective drug for the conditions it treats, but does that justify its lofty price?

“A fraction of a teaspoon of Soliris, administered in a single 35-minute treatment, costs more than $18,000, and patients might need 26 treatments a year for the rest of their lives. With this single drug accounting for almost all its revenue, Alexion has created enormous wealth out of an estimated 11,000 customers. It generated $3 billion in sales in 2016, and its $24 billion market valuation puts it on par with household names such as HP Inc., and Yum! Brands Inc.”

Alexion could be a profitable company even if it chose to lower its prices—or was forced to lower them.

To maximize its profit, a company in Alexion’s position must seek out potential patients with ailments most people haven’t heard of.  Mass media marketing would not be effective, but some traditional approaches can be.  Of course, doctors have to be encouraged to look for such diseases within their patient pools.  Supporting patient advocacy groups is helpful in getting drugs approved for use, but they are also valuable as a means of attracting potential customers.

There are other practices that seem to cross ethical lines.  The authors open their article by relating the experience of one physician who was struggling with a diagnosis and tried Soliris to see if it had an effect.  A null result was observed and treatment with the drug was stopped.  This doctor then received a call from an Alexion salesperson who proceeded to argue with the doctor about his treatment plan, and, of course, to claim that continuing with Soliris was the appropriate path.  Such a discussion might even have been beneficial, but in this case the doctor was taken aback by the aggressiveness of the salesperson, and was startled to learn that so much was known about the patient when no communication of data had taken place.

How did Alexion learn what this doctor was doing?  Patient data is supposed to be strictly confidential.  How did they gain access?  It was easy.  Laboratories doing the testing have begun to sell testing results to drug companies and others with an interest.  This process is legal as long as the name of the patient is not disclosed.

“Drug companies pressured labs for years for access to the testing data, but the labs pushed back, says Adam Tanner, a writer in residence at Harvard’s Institute for Quantitative Social Science and author of the book Our Bodies, Our Data. Around 2010, he says, the labs’ behavior changed. Seeking a way to fatten thinning profit margins and under the rationale of helping drug companies with research, labs began to sell blinded test results to data aggregators and drug companies.”

“Reps were instructed to urge doctors to send the tests to preferred “partner labs,” according to several former employees and internal documents. Unbeknown to patients and many of the doctors, several of these preferred labs have agreements with Alexion to provide it with a copy of the test results. These are ‘blinded’ to remove the patient’s name, so they don’t run afoul of medical privacy laws. But in some cases the lab provides everything else: a patient’s age, gender, and ZIP code, the hospital and doctor ordering the test, and a summary of the results. For Alexion sales reps, this gave a map to the doorsteps of otherwise hard-to-find patients.”

“When a result for PNH or aHUS came in to Alexion, the diagnostics team—about a half-dozen employees—passed the detailed information along to the sales staff, which descended on the doctor listed in the result. ‘It was like Normandy,’ says a former account rep who requested anonymity because he doesn’t want to harm his career.”

Alexion also maintained a team of nurses who were supposedly needed to assist in applying treatment regimens.  Instead of allowing these people to act as independent care givers whose allegiance was to the patient and her health, they were allied with the sales team and were expected to act in Alexion’s interest.

“A team of nurses sat alongside the sales staff. Pharmaceutical companies often employ trained medical personnel to help them manage complicated treatment regimens. But as licensed practitioners, in-house nurses are supposed to hold their patients’ interests ahead of their employers’ profits. To avoid conflicts, most drug companies keep a firewall between their nurses and their salespeople. At Alexion, the nurses reported directly to sales, and the pressure to lock in and keep customers was often heaped on them because they had the most access.”

“Several former employees described how, during weekly Friday sales meetings, managers gathered the sales staff and nurses to talk about their customers. If somebody had stopped taking Soliris, the managers would turn to the nurse assigned to that patient: What steps did you take to keep the patient on the drug? Have you told the patient he could get a potentially fatal blood clot if he stops? Did you steer the patient to a different doctor who might resume treatment? ‘It was your feet to the fire, sweat pouring down your back,’ says one former longtime company nurse, who requested anonymity because she feared retaliation from the company.”

Eventually Alexion’s practices got it into trouble.  The article goes into detail about the investigation by the police in Brazil over its methods.  The lead executives of the company left and Alexion is said to be revisiting the ethics of its practices.

How many Alexions are out there now?  Will the new focus on precision medicine produce a new batch of Alexions?  Time will tell, but past experience indicates that if there are no referees on the field all the players will do what is necessary to gain an advantage.

The practice of allowing drug companies to set their prices without constraint cannot go on forever.  The direction in which medicine is moving makes it more important than ever for some sort of pricing algorithm to be developed and applied.  We cannot afford to do otherwise.