Expensive New Medications vs Expensive Old Medications

Cornelis de Bie (1621/1622–1664); After David Teniers the Younger (1610–1690): A medical practitioner examining a urine flask // Public domain

Recently publicized case of a child who was not reimbursed by his health insurance company for a requested medicine illustrates the broken world of medicine. Lots of regulations  and little market is supposed to protect patients, but it often works exactly the opposite.

A three-year-old boy from Slovakia suffers from Dravet syndrome, a severe form of congenital epilepsy characterized by dozens of seizures each day. The parents applied for an exception to the health insurance company’s reimbursement policy for the drug Fintepla. This medication was approved in both the US and EU in 2020 and shows solid results in reducing the frequency of seizures. While it is covered by public health insurance systems in many countries, it remains uncovered in Slovakia (and also in Canada, for instance). In fact, the annual cost of treatment with this drug ranges from EUR 30,000 to EUR 90,000. Per year.

Therefore, Slovak citizens are left to try their luck through an exemption. However, since there are quite a few other (albeit less effective) antiepileptic drugs, the insurance companies have a fairly simple “defense”. Moreover, given that all three Slovak health insurance companies are facing substantial losses, their position is arguably understandable.

Different Than What We Are Used to

Up until now, the story would seem like a repetition of narratives we’ve encountered numerous times. Keytruda, Zolgensma, and other groundbreaking therapies based on innovative gene therapy methods and the like.

Yet, this is a bit different. Fintepla is the trade name for fenfluramine, a drug developed in the early 1960s and marketed for thirty years as an appetite suppressant for obesity treatment. When it was withdrawn from the market in 1997 after a series of suspicious heart problems in patients, no one cried much for it.

However, as far back as the 1980s, doctors noticed a possible link between the drug and improvements in epilepsy in children. Research was particularly intensive in Belgium, where off-label usage of fenfluramine for epilepsy treatment was permitted for clinical trials.

The drug is 60 years old and has been successfully used experimentally for 40 years to treat epilepsy in children. So, why does an annual dose costs tens of thousands of euros in 2023?

Fintepla may contain an old drug substance, but using it for a new indication makes it a completely new drug according to regulatory criteria. The journey from experimental administration to the box in the pharmacy is a marathon. Whoever wins that marathon also wins the exclusive rights, even if it has nothing to do with the invention of the drug substance itself. It is a bit of a disease of today’s intellectual property protection system, not only for medicines.

But, let’s not cast a dubious eye solely on the manufacturer of the ‘new’ drug. Getting permission to launch an old drug for a new indication is not just about some paperwork. Such a medicine has to go through a full round of clinical trials in which it proves its efficacy and safety in the new indication. Complying with all the regulations costs something, and not a little. Dravet syndrome is a rare disease, so a relatively small group of patients are indirectly responsible for paying this expense.

The third problem is the fact that medicines are not sold to patients, but to states and insurance companies. Their price is determined solely by their willingness to pay. As Stephen Farr, the director of Zolgenix, who came to market with Fintepla, states:

“…the price is based on the fact that [the drug] shows great efficacy in the treatment of Dravet syndrome. … we have put in place a system and support services to ensure that the cost to the patient is very small, if not zero…the price is for payers, not patients.”

Zorgenix is said to have been working with payers (understood to be insurance companies in the US) to find a price that they will be able to “support”.

Zorgenix, meanwhile, has already been bought by pharma firm UCB for $1.9 billion in 2022 to add to its portfolio. Since Fintepla was their only major drug, that’s roughly its market value.

Expensive and Slow

The treatment of Dravet syndrome illustrates some of the absurdities of pharmaceutical economics through two illustrative examples. As of 2018, a drug named Epidiolex displayed some seizure mitigation. But it also carries an annual cost of $32,500. It is only reimbursed by certain states, so public fundraisers for sick children are being done in this case as well. What’s the point? Epidiolex is the commercial name for … cannabidiol.

Do not stop reading! Yes, I know. In our country, the wonders of CBD are mainly presented by playmates and Instagram rappers, who also use CBD to summon resurrection. But the treatment of epileptic seizures is the first and (if my research is correct) one of the only sanctioned applications for CBD in both the US and the EU. Treatment is allowed from 2 years of age.

So, if one seeks a medically endorsed extract from the cannabis plant, complete with official approval, it entails a cost of €30,000 annually. The reasons are exactly the same as I have described above. Weed is weed and medicine is medicine. The difference between the two is 15 years in prison and EUR 30,000 in the wallet.

The problem can therefore be summarised as follows. We have a very expensive and lengthy regulatory need to demonstrate the efficacy and safety of a medicine in various situations. This results in exclusive rights that make competition impossible. There is no competition even on the demand side, the ‘purchase’ of a medicine is not decided by the preferences and options of patients, but mostly by a pharmacoeconomic analysis of the medicine combined with price negotiations between the regulator and the rights holder. As a result, even old and simple medicines are sold at gigantic prices.

How to get out of this? I will not reveal that in this text. Not due to reluctance, but due to my own lack of knowledge. If I were a world regulator with divine power, I would put a reset and let the system grow up on different rules. But that cannot be done. We live in a world where only piecemeal changes can be made, which will always hurt someone, somewhere.

Yet, I am sure that, even in this world, there must be more efficient ways of getting at least the medicines that were not here yesterday to patients in difficult conditions quickly and cheaply. Even at the cost of accepting some degree of uncertainty and risk.

Originally published in Slovak in .tyzden on 25/08/2023

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