An estimated 2.8 million people worldwide have been diagnosed with a disease known as Charcot-Marie-Tooth disorder, an inherited muscular atrophy condition. The disease causes debilitating muscle weakness that can sometimes require leg braces.
There is no existing drug to treat it.
Pharnext, a French drug maker developing a treatment, hopes to change that. But what may set the firm apart is less its work on an experimental drug than its stated determination to do something else: keep the drug affordably priced.
If Pharnext succeeds in its plans, it will charge $20,000 to $60,000 for annual treatments — a hefty sum, but considerably less than the kinds of drug prices that have triggered allegations of price-gouging among patients and consumer advocates. It could also show other drug makers that it’s possible to drastically reduce research-and-development costs to produce breakthrough treatments, which in turn would allow them to charge less.
Pharnext has “been a game-changer,” said Allison Moore, who has Charcot-Marie-Tooth, or CMT, and is the founder of the Hereditary Neurotherapy Foundation.
“I do think that they will deliver on the pricing,” she said. “If the pricing can be low, that can also be a trend for these other rare diseases.”
The question is if the company can make the economics work. The drug industry and its defenders have repeatedly said that high prices are justified by the high cost of developing new drugs. Research is expensive, and much of it fails. Even former Turing Pharmaceuticals CEO Martin Shkreli, who has received so much public scorn, rationalized a 5,000 percent price increase in part by saying that his company planned to invest in research for treating rare diseases.
That might be argument that much of the public does not accept — about 53 percent of Americans say the drive for company profits is driving the cost of prescription drugs. But there’s no disputing that research and development requires significant investment.
Some drug companies will spend upwards of $1 billion to develop drugs for rare diseases, and then price the treatment at $100,000 or more per year.
Dr. Daniel Cohen, the chief executive of Pharnext, who launched his career by helping map the human genome, said it doesn’t have to be that way.
“Do we want to charge less to save the system, or do we want to make short-term money?” Cohen said in an interview with STAT. He and his colleagues came down somewhere in the middle.
“We are a little bit romantic, but not that much,” he said.
Pharnext has developed a process known as pleotherapy, which it said could hold promise for the future of drug-making. It involves combining existing drugs and repurposing them to treat new conditions and lowering the doses involved to ward off side effects. The firm’s treatment for the main strain of CMT will probably cost $40 to $50 million to develop if all goes well, Cohen said. By keeping research costs in check, Pharnext says it will be able to charge consumers less.
“We are a little bit romantic, but not that much.”
Dr. Daniel Cohen, chief executive of Pharnext
It remains to be seen whether that’s the case. But experts who track drug pricing said that the company’s reported strategy seems unusual.
“First, they revealed what their pricing would be for a drug that hasn’t been approved. … Companies tend not to reveal anything about pricing before approval,” said Joshua Cohen, an associate professor at the Tufts Center for the Study of Drug Development. “Second, they are not going with a price that would maximize their profits. This is not unheard of, but not common. As with any commodity-selling company, drug firms usually price their products in such a way as to maximize profits.”
Dr. Brian O’Sullivan of the Children’s Hospital at Dartmouth, who has written about drug prices, called Pharnext’s stated approach “refreshing.”
“I think that there’s been a lot of concern in the general public about people looking to make the biggest possible profit,” he said. “You don’t have to make billions when you could make hundreds of billions.”
Pharnext hasn’t yet gotten its first product to market yet, however — and likely won’t until 2019, assuming the CMT treatment is approved.
Still, Cohen is seen by some as a mirror image of Shkreli, who was unapologetic about hiking prices, saying his decision was justified by his desire to pursue cures for rare diseases and his responsibility to shareholders.
Cohen said he didn’t want to be critical of Shkreli. But he also said that the current research-and-development model is too expensive because it fails too often and that financial interests tend to exacerbate the problem.
“If there is exaggeration from companies — to over, over, overprice despite a small cost — I would say this might exist,” Cohen said. “But frankly, the guilty is not the company. The guilty is Wall Street because they put pressure on people.”
Pharnext’s medical philosophy is a bit unorthodox in the age of personalized medicine, especially given Cohen’s role at its origins in documenting the human genome. The bottom line, he said, is that highly individualized treatment is often too expensive to produce and that leads to higher prices. Combining older drugs, on the other hand, could be cheaper and a cocktail that treats Alzheimer’s disease might also help treat Parkinson’s, broadening the patient pool and in turn helping lower prices.
Not everyone is sold on his approach. Several experts pointed out that the actual ingredients being used by Pharnext — the older drugs that make up his cocktail — are available at a very cheap price.
“It’s wonderful to develop a therapy for rare conditions, which, if truly effective in improving quality of life for patients, should be rewarded,” said Dr. Walid Gellad, a professor who studies drug prescribing at the University of Pittsburgh, adding that he had not examined Pharnext’s plans extensively. “But I’m not sure I see altruism here as opposed to limits on what people will pay for these older drugs in combination.”
Even those who praised Cohen’s pricing philosophy acknowledged that he isn’t investing the same kind of money into basic research that other companies are.
“It’s a little easier for them to say they’re going to price it lower because they’re not putting as much in on the front end,” O’Sullivan said, though he added that “some other companies have used that as an excuse to overcharge.”
Regardless of altruism or lack thereof, Cohen will have an important ally: patient advocates. After Turing Pharmaceuticals hiked the price of an older anti-parasitic drug by more than 5,000 percent last year, AIDS groups whose constituencies relied on the drug were outraged.
Pharnext, on the other hand, has the enthusiastic backing of Moore’s group, the Hereditary Neurotherapy Foundation. Moore met personally with Cohen and his colleagues in Paris in 2013 and helped set up the US trials for their drug.
“I really feel it’s not just about making money,” Moore said of Pharnext and Cohen. “He really wants to make a difference.”
Correction: An earlier version of this story misstated the hospital where Dr. Brian O’Sullivan works.