Is the US setting the bar too low for new CF drug? Canada says it’s not worth it

From The Globe and Mail:

Canadian governments should not pay for a $250,000-a-year cystic fibrosis medication because it is not clear the drug actually improves patients’ health, according to a fresh review that has devastated some with the potentially fatal lung disease….

Screen Shot 2018-10-15 at 9.06.47 AMIn a report released on Thursday, the CADTH’s expert panel said its review of the Orkambi clinical trials and other studies found the drug produced only slight improvements for about one in four patients.

The report also said Orkambi’s Boston-based maker, Vertex Pharmaceuticals, would have to slash the drug’s price by more than 98 per cent to satisfy the agency’s value-for-money analysis.

“[Orkambi] is better than nothing. It’s better than placebo,” said Trevor Richter, director of the CADTH’s Common Drug Review, which oversees the review process for non-cancer medications. “But the benefit is really small. Not only is it small, but there’s a huge amount of uncertainty about what the actual size of that benefit is.”…

Vertex called the agency’s recommendation “deeply disappointing.”

Patients, who say the drug benefited them, are suing.

Mr. Richter of the CADTH said it is difficult but necessary sometimes to disappoint patients.

“We don’t enjoy delivering recommendations that are seen as negative,” he said. “In the end, we are an evidence-based review process. It’s rigorous and it’s transparent.”

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Why won’t the Cystic Fibrosis Foundation comment on the high price of the new Vertex drug?

Robert Weisman of the Globe reports today:

California scientist Paul M. Quinton learned that he has cystic fibrosis at age 19 and has speVertexLogoSOPnt his long career in his lab working on ways to cure it.

He is, in short, not the kind of person you’d expect to be fighting with Vertex Pharmaceuticals Inc., the company developing a new class of breakthrough drugs for the obstructive lung disease.

But he and a group of prominent cystic fibrosis doctors are doing just that. For the past three years, they have engaged in a private and largely fruitless dialogue with Vertex over their complaints that the Boston biotechnology firm is overcharging for its medicines.

At the end of the story he checks in with the group  that represents the interests of patients. They don’t say much:

ssA spokeswoman for the Cystic Fibrosis Foundation wouldn’t comment specifically on the price of Orkambi. But in a statement, the foundation said that the cost of doctors, hospitals, drugs, and diagnostics together places “a tremendous financial burden on people with the disease and their families.”

Worth noting that the CFF’s so venture philanthropy — non-profit investment in drug development — let to the ultimate development of one of Vertex’s CF drugs the new drug. A Nov. NYTimes story notes the foundation expected to receive $3.3 billion from selling the rights to the royalties to those drugs.

Proponents say it speeds drug development while also providing potential monetary rewards that can pay for even more research.

But there is some concern that a profit motive could divert the organizations from their primary mission — helping patients — and create a conflict of interest. For instance, the price of the main drug developed through Cystic Fibrosis Foundation’s investment is $300,000 a year. Kalydeco treats the underlying cause of cystic fibrosis 

Critics say that perhaps because a higher price means higher royalty payments, the foundation did not do enough to bring the cost down.

“I would like to see them do more to get the price of this drug down to something that is going to be sustainable,” said Paul M. Quinton, a cystic fibrosis researcher at the University of California campuses in Riverside and San Diego, who has the disease himself. “And I have some concern about the possible appearance of a conflict.”

Vertex gets clawed after sales of much-touted hepatitis C drug drop

It sounds kind of hostile, but “clawback” is an economic development term. Instead of using flat-out tax breaks to lure companies that promise new jobs, the Massachusetts Life Science Initiative now holds firms to their promises.  If they don’t generate jobs, companies have to pay back the state.

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Boston Redevelopment Authority.

So, Vertex, the Cambridge biotech that just built a $800 million headquarters in the Seaport District, will have to return some of our money.

From the Globe:

With the drug’s sales dropping sharply, Vertex said it is cutting about 17 percent of its total workforce, or 370 jobs — including 175 in Massachusetts — and will return $4.4 million in state tax incentives it received for promising to create jobs.

The company may yet become an anchor of the state biotech sector. But to do so, executives will need to make good on their plans to build a multi-drug pipeline — something few in the high-risk biotech business have done. The first test will be winning approval for a portfolio of cystic fibrosis drugs.

The city of Boston also contributed to the project.

Clawbacks provide taxpayers a way of making sure their investment in development subsidies pays off in the form of real public benefits, and allow governments to recoup their money if it does not. The concept of a clawback may seem like common sense. However, with the way many subsidy deals are currently structured, companies often face no penalties if they fail to deliver on promised jobs or investment. A company’s plan to create public benefits may be regarded by both corporate executives and public officials as more of a goal than an enforceable commitment. Governments often take a “good faith” approach, assuming the company has done and will continue to do its best, and letting it off the hook if it falls short. 

Often, companies will threaten to relocate unless they win tax breaks. Vertex was considering its move at the time the state was setting up its life science subsidy program. From Nature Network Boston:

For Josh Boger, the head of Vertex Pharmaceuticals, the need for incentives from the state is real. “I’m the one who regularly gets detailed reports about how much more favorable things would be if we moved Vertex to another state,” said Boger, who is also the current chair of BIO, the national association of biotechnology companies.

As Vertex looks to expand its headquarters, Boger has been listening to pitches from other states, as well as other countries. “Am I looking at Massachusetts? Yes,” he said. “That doesn’t mean that I’m not looking elsewhere.”

The house that hepatitis built

…with $11.8  million from Boston taxpayers.

The Globe today reports that the biotech firm Vertex plans to build a $2 billion waterfront tower in Boston.

Vertex yesterday signed a letter of intent to relocate its headquarters from Cambridge to the Fan Pier complex in late 2013. The 23-acre development has just one tower now, but is slated to have eight buildings of offices, residences, stores, and hotel rooms, as well as parks and a marina…

Terms of the deal have not been disclosed, and the company has not yet signed the lease. The lease is contingent on an unusual clause: Vertex must receive federal approval of its first major in-house commercial drug, telaprevir, a treatment for hepatitis C. US regulators are expected to act on the company’s application by June.

Maybe Bostonians will get a deal on telaprevir, which might end up being the $2 billion molecule. Or the possible new mega insurance company, also a topic on the Globe’s front page, might be able to negotiate a discount.

The state’s second- and third-largest health plans, Harvard Pilgrim Health Care and Tufts Health Plan, are set to tell their employees today that they are exploring a merger that would reshape the region’s health insurance landscape…

“There has been tremendous value in having three strong locally based health plans in terms of choices for consumers,’’ said Nancy C. Turnbull, associate dean at the Harvard School of Public Health and a former deputy insurance commissioner. “But on the other hand, this could create a consolidated plan that could create a stronger competitor to Blue Cross and it could create a plan that has stronger leverage than either of them individually in negotiating with providers.’’

From the CDC

Hepatitis C
2008
2007
2006
2005
2004
2003
No. of Acute Clinical Cases Reported a
878
849
802
694
758
891
Estimated No. of Acute Clinical Cases b
2,900
2,800
3,200
3,400
4,200
4,500
Estimated No. of New Infections b (current)
18,000
17,000
19,000
21,000
26,000
28,000
Percent Ever Infected c
1.3% – 1.9%
Number of Persons Living with Chronic Infection d
2.7–3.9 million persons
Annual Number of Chronic Liver Disease Deaths associated with Viral Hepatitis e
12,000