This old drug was free. Now it’s $109,500 a year
For four decades, Don Anderson of Seattle has been taking the same drug to help control the temporary bouts of immobility and muscle weakness caused by a rare genetic illness called periodic paralysis.
“It’s like putting a 50-pound pack on your back and standing up at the dinner table,” Anderson, 73, said. “It’s like wearing lead shoes around all the time.”
The drug Anderson has been taking all these years was originally approved in 1958 and used primarily to treat the eye disease glaucoma under the brand name Daranide, its price so unremarkable that he can’t quite remember how much it cost at the pharmacy counter.
But the price has been on a roller coaster in recent years — zooming from a list price of $50 for a bottle of 100 pills in the early 2000s up to $13,650 in 2015, then plummeting back down to free, before skyrocketing back up to $15,001 after a new company, Strongbridge Biopharma, acquired the drug and relaunched it this spring.
“I’m constantly hearing that public pressure, public shaming will be sufficient to curb these bad actors in these industries. It often feels if you take your attention off of them, even for a second, they’ll revert to these old ways,” said Rachel Sachs, an associate law professor at Washington University in St. Louis. “It’s just another example of how the system has some problems that need to be fixed.”
The zigzagging trajectory of the price of Daranide, now known as Keveyis, shows just how much freedom drug companies have in pricing therapies — and what a big business opportunity it has become to sell drugs that treat extremely rare diseases. It also illustrates how well-intentioned policy to help spur the development of “orphan” drugs for very rare diseases can have unintended consequences.
Daranide was approved half a century ago, often used to treat glaucoma. Some people with the rare neuromuscular condition, periodic paralysis, began taking it off-label to help control their disease. With a list price of $50 for 100 pills in 2001, it wasn’t a drug people remember as hard to obtain. (Pricing data was obtained from Truven Health Analytics, part of the IBM Watson Health business.)
In the early 2000s, Daranide was discontinued by Merck. Other glaucoma treatments were available, but a small group of periodic paralysis patients who had found that it controlled their symptoms better than other drugs were left with few options. They found ways to get the drug, importing it from Europe or South Korea. Anderson recalls the expense as about $250 or $300 a month.
In 2008, a family affected by the disease that also owned Taro Pharmaceutical Industries, a generic pharmaceutical company, decided to acquire Daranide from Merck. The goal was to make the drug reliably available to patients at a reasonable cost, Barrie Levitt, the former chairman of the company, and his son Jacob said in 2016.
Jacob suffers from periodic paralysis, and although he took a different drug to control his disease, he became aware from his work in the patient advocacy community that Daranide had been discontinued, forcing patients to look for alternatives or find sources to import. He said Taro spent less than half a million dollars to acquire the old drug.
But Taro was taken over by another generic-drug company, Sun Pharmaceutical Industries, in 2010. When the drug was approved in 2015 as a rare-disease treatment for periodic paralysis, it got a new name, Keveyis, and a new price: $13,650 for 100 pills. Although Keveyis is a decades-old drug, its federal approval for periodic paralysis came with a seven-year period of exclusive marketing rights.
In 2016, after the Washington Post asked questions about the high price of the drug, Sun Pharmaceutical said it would give the drug away free of charge. Sun said that the timing was coincidental and reflected the fact that the company had made less than $1 million on the drug — not enough to recoup the investment the company had made in marketing and patient support services.
But the story doesn’t end there. Late last year, Sun agreed to sell Keveyis to a biotech company, Strongbridge Biopharma, for $8.5 million. In April, Strongbridge relaunched the drug — and in August, it raised the list price to $15,001 for a bottle of 100 pills.
In a presentation for investors, Strongbridge Biopharma estimated that the annual price of treatment for Keveyis would range from $109,500 to $219,000, depending on the dosage the patient took. One slide shows that the drug is covered broadly by insurers. In November, the company announced $2.5 million in sales last quarter — a 67% increase over the previous quarter’s $1.5 million in sales. It said it would expand its sales force, and executives said in a conference call that the company’s medical affairs team had met with 75 medical leaders and was training speakers to lead “peer-to-peer educational programs.”
Lindsay Rocco, a spokeswoman for Strongbridge Biopharma, declined to answer questions about why the company increased the price of the drug this year. Instead, she issued a company statement saying that periodic paralysis affected only 5,000 people in the United States and the drug could provide benefits for those people.
“Strongbridge is committed to serving the unmet needs of the primary periodic paralysis and other rare-disease communities,” the statement said.
Sun Pharmaceutical did not answer questions about why the company sold the drug after dropping the price to zero.
For patients, this is a double-edged sword. The company is selling the drug in the United States — a big improvement over the years when it wasn’t available at all or had to be imported. And like nearly every drug company with a high-priced treatment, it offers patients support in navigating their insurance or help in paying for the drug.
Anderson, for example, pays nothing. Anderson said Keveyis is not on his insurer’s list of covered drugs, but he gets it free without a co-pay. Providing help to patients in affording drugs by paying co-pays, helping overcome insurance barriers and even giving it away free of charge helps individual patients, and it insulates the drug company from criticism of its price.
“If your insurance doesn’t cover it or if you don’t have insurance, they will provide it free,” said Anderson, who added he is grateful to the company. “I don’t understand how much it’s costing some insurance companies.”
Strongbridge has launched free genetic testing for the disease and is expanding its sales force, moves that will help it identify more people who could become customers.
“It’s either: People get ripped off, but they live, or they don’t get ripped off, and they die. It’s a little bit of a blackmail situation,” said Jacob Levitt, who has watched the price increases with dismay. “The business model is a little bit taking advantage of making a cheap drug very expensive.”
Levitt said that Strongbridge has given $250,000 to the patient organization that he heads, which helps support a conference. That’s a valuable resource for patients, and he says it’s an even more lucrative investment for the company, which can use the event to get in front of people with the disease and identify new patients.
“What they have done is found the mechanism for making a lot of money off of a drug they didn’t have to make a lot of money off of,” Levitt said.
Johnson writes for the Washington Post.