May 25th, 2017

Orphan Drugs

Have you heard that term? Orphan drugs are defined as a treatment that will help fewer than 200,000 people in the U.S.

Sounds great. Let’s help those afflicted with rare diseases by developing novel medications and drug therapies. Society can only benefit from this innovative practice.

What if I told you that one specific company that developed a treatment called Soliris for a rare blood disorder called “atypical hemolytic-uremic syndrome” (aHUS), Alexion Pharmaceuticals, had a market capitalization of $24 billion that put them at a valuation equivalent to companies such as HP and Yum Brands?

Let me say that again. This pharmaceutical company that develops one drug to treat aHUS and only has 11,000 customers generated $3 billion in revenue.

I guess my opinion is going to come out here, but what the hell.

How is this legal? It doesn’t take an actuary to figure out that those afflicted by aHUS are paying out the wazoo for treatments they will likely need for the rest of their lives. According to Bloomberg business, one drug therapy session of Soliris lasting 35 minutes costs $18,000 and patients typically require 26 treatments per year. Each patient is worth potentially millions to Alexion.

It’s no surprise that ethical boundaries have been violated and that sales practices at this particular pharmaceutical company have been investigated.

Would you be surprised to know that the Founder, CEO, CFO, and Chief Compliance Officer have all since left the company for encouraging overly aggressive sales tactics?

Unfortunately this story of increasing prices for life-saving drugs is nothing new in the U.S. pharmaceutical industry, I.E. EpiPen technology.

I was very disturbed reading about Alexion Pharmaceuticals this morning.

Tweet me your thoughts @Ryan__OToole.