09 December 2009

Little Orphan Druggy

Herewith the tale of Little Orphan Druggy. Last Saturday, the NYT ran an article about a new cancer drug, Folotyn, and once again committed the sin of omission. I sent along the following, but they demurred, once again, so I'm sharing it with you Dear Reader.

Once again, your reporter and his editors have committed the lie of omission. In this case, it is the status of Orphan Drug, which applies to Fotolyn and was approved by FDA. The Orphan Drug Act was passed by Congress (1983), with the intention of encouraging drug companies to support small population diseases. The Big Pharma largely have ignored these diseases, thus small bioPharma/bioTechs have taken up the risk. As the story says, Allos had not had an approved drug before Folotyn. There is a reason for that: finding new compounds which are therapeutic is expensive, and without the revenue from existing compounds means funding comes from debt and sequential public offerings. Recouping that investment from a small population inevitably leads to high unit cost. If this angers you, have Congress repeal the Orphan Drug Law. Simple as that.

This does raise a serious issue, which the Times chose to ignore, as it often does. The Orphan Drug Act was created for the express purpose to encourage research and development into compounds for diseases not in the mainstream. There have been a number of side effects. Most significantly, small drug development companies have been created, with the apparent motivation of doing orphan drugs. Whether this is a Good Thing, I don't know. I've not the time nor a paid researcher to know for certain that X% of orphan drugs are made by one trick pony companies. Some are, some aren't. It does seem to me that there are lots of small drug companies doing narrow scope cancer drugs. There are also a few looking to develop widely applicable platforms, but starting with orphan diseases as a way to get some compound into commercial status using the base technology.

It also appears that Big Pharma is both buying up these companies, and slurping at the Orphan Drug trough.

But is it a Good Thing to offer companies, essentially, monopoly power over a compound for an extended period of time? Reading the article (disclosure: I had Allos stock for a time months ago), $30,000/treatment is astounding. Allos hasn't had an approved drug until now. They've been around for years, with management getting nice salaries and bonuses. It could be that the scientists are better than average paid, but who knows? As one of the panel, who voted for approval, said, Folotyn is just a single in the War on Cancer. What has not been analyzed, and should be in any serious discussion, is the proportion of funds used for drug development versus salary and perks to managers in orphan drugs versus non-orphans. This overlaps, to some degree, with the proportions between Big Pharma and small pharma. I know of certain small pharma companies that are zombies; continuing to slurp of funds (generally from "new investors", not so much government) while producing nothing approved for decades. There exists the public policy question of whether the Orphan Drug Act, used by either Big or small Pharma, has proven worth the costs, both public and private. A decent master's thesis or even doctoral dissertation is for the doing.

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