A Drug for Just Nine People Was Approved. That's Worth Celebrating ... and Incentivizing (Plus the Week's Top 10)

Last month, there was a really interesting approval that didn’t get much attention. Regeneron won the FDA’s backing for Veopoz, a treatment for a genetic disease called CD55-deficient protein-losing enteropathy, or “CHAPLE” for short.

The approval was remarkable because of two numbers.?

The first number is $1,799,200, which is the low end of the annualized list price. That’s $34,600 per single-use vial, given weekly. Larger children may need a second vial, effectively doubling the price.?

The second number is 10. Or, more precisely “less than 10.” That’s how many patients in the United States live with CHAPLE, which Regeneron referenced in their release. I’d be tempted to call that number “unimaginably small,” but that wouldn’t be right. We can all imagine what a group of fewer than 10 looks like. ?

Those two numbers suggest that Regeneron had a scientific solution that met a clear medical need for a very, very small number of patients, and they went for it, economics be damned. (Regeneron reported $72 million in direct R&D spending on Veopoz last year.)

Veopoz isn’t the only example. This week, over in Europe, the makers of a pioneering gene therapy for “bubble-boy disease,” Strimvelis, signed over the rights to the medicine to an Italian charity because there was simply no other model for getting the medicine to patients. It’s a reminder that price isn’t a proxy for greed in the way that industry critics so often imply.?

I don’t want to over-simplify the story here. Veopoz may have utility, in combination with another experimental medicine, in other indications. Regeneron may yet see a return on investment into the molecule. But that doesn’t take away from the company’s effort to develop and test a medicine in a patient population that could have easily been overlooked or, worse, ignored.?

(It’s also worth pausing here to note that the approval in CHAPLE would almost certainly not have happened if the Inflation Reduction Act were in effect when Regeneron started development. This STAT op-ed from this week -- by the leaders of BIO and NORD -- lay out the way that orphan drug manufacturers will be discouraged from developing multiple indications for rare disease drugs.)

The Top Ten Stories of the Week

1. A new AP poll includes a number of findings that should make pharma nervous. The obvious, topline result is that 76% of Americans think that “negotiations” are a good thing. But the more subtle, but perhaps more worrying, element is that a narrow majority of those polled think that Joe Biden is doing a lousy job on drug costs … because he hasn’t gone far enough.?
2. Speaking of Regeneron … last friday, the company and HHS entered a partnership to create new antibodies for COVID-19, and that deal included a provision that calls for any drug to come out of the deal to have prices in the United States that are “equal to or less than its retail price in comparable markets globally.” That provision made Bernie Sanders happy, but it’s not clear if this is indicative of a larger trend.?
3. I’m sure there are a lot of pharma skeptics who saw this exchange between a pharma exec and Rep. Ro Khanna and cheered. It’s a clip about a back-and-forth about different kinds of government “negotiations” designed to paint industry as hypocritical for acceding to negotiations with the VA while suing to stop the IRA. But as PhRMA points out, the VA process and the IRA process have some very, very big differences.?
4. The first hearing before a judge in an IRA-related case happened yesterday. I listened in. It was kind of a snooze: the lawyers for each side presented their arguments (which were already well defined) and the judge didn’t ask any questions or otherwise provide any feedback about what might happen next.?
5. I’m on the record that the AstraZeneca case is the most fascinating of the eight lawsuits seeking to block the IRA, so I enjoyed this Bloomberg Law article that explains how AZ is zigging when everyone else is zagging.?
6. This Wall Street Journal piece about the price that insurance companies charge for generic drugs is 24 times higher than what Mark Cuban’s drug company charges got a lot of attention. There seems to be a growing realization that the (probably problematically) low wholesale prices on generic meds leave a lot of room for trickery.?
7. The most-clicked link of the week from my daily newsletter (subscribe here) was this lengthy but wonderful primer by Northwestern economists on how medicines get priced in the United States.?
8. The PBM industry is quite concentrated, according to a new American Medical Association study. It’s not clear that’s a surprise, but it probably doesn’t help the PBM case going into a week where there will be a PBM hearing on the Hill.?
9. We know what the prices for the new COVID-19 vaccines will be on the commercial market. $120 for Pfizer. $129 for Moderna. Insurance companies will foot those bills. The uninsured will be handled through a new government program, but that effort may have its hiccups.??
10. Akili had a great idea -- a clinically proven, FDA-approved video game to help treat ADHD -- and is now struggling mightily. The reason: health insurance companies won’t pay for it, creating a terrible chilling effect around what could be a fantastic, dynamic and cost-effective approach to treating certain conditions.?