Vertex Pharmaceutical’s $300,000 per year Cystic Fibrosis Drug Has Caused a Legal Battle
The drug Kalydeco treats a small subest of Cystic Fibrosis (CF) patients who have the rare mutation in the cystic fibrosis transmembrane conductance regulator (CFTR) gene called G551D. The price of the drug id so high because it treats such a small number of potential users. Indeed, those patients with the G551D mutation account for only 3% of CF patients in all of North America.
The drug is designed to aid the CFTR protein to function more normally once is has reached the cell surface, which helps clear mucus from clogging airways, thereby facilitating increased chloride transport by potentiating the channel-open probability of the CFTR protein. The drug was granted FDA approval in 2012 and will be under patent protection until 2025 with exclusive marketing rights.
Vertex has pledged to provide the drug free of charge to patients in the US who don’t have insurance and a combined household income of under $150,000. In Arkansas, the drug has sparked a legal battle, where the state’d medicaid program is restricting access to the expensive therapy.
A lawsuit was filed in Arkansas federal court in June 2014, where three CF patients have claimed that Medicaid officials have denied them access to the drug for the past two years because of its cost. The plaintiffs of the trial claim that the officials they have been dealing with have violated their rights under law governing medcaid, which is the US government run health insurance plan for the poor.
The patients all meet the eligibility criteria established by the FDA when it approved Kalydeco in 2012, including the presence of a rare genetic mutation it is designed to correct. But Arkansas officials have said the patients must prove their disease has failed to benefit from older, less-expensive therapies, a policy their doctors say contradicts treatment guidelines.
Emails obtained by the patients’ attorneys show officials discussing Kalydeco’s cost, and their worries about the expense of future cystic fibrosis drugs.
More of these types of expensive, niche drugs are on the way. A recent report by insurer UnitedHealth Group Inc estimated specialty-drug spending in the U.S. could more than quadruple to about $400 billion in 2020, up from $87 billion in 2012.
Doctors, patient advocates and Vertex said Arkansas is the only state they know of that has denied Kalydeco to patients who meet the FDA criteria, and that the state’s policy appears to be unique.
Providing the three people with Kalydeco, which has an annual wholesale cost of $311,000, would have a small impact on Arkansas Medicaid’s prescription drug spending, which totaled $351.28 million in 2013 and represented 7.5% of the state’s total Medicaid spending.
In exchange for having their drugs covered by Medicaid programs, pharmaceutical companies are required to provide rebates that are split between states and Washington. Last year, Arkansas received rebates totaling $142.97 million, or about 41% of its total drug spending, of which it kept 22%, with the rest going to federal government.
Read more about it here: Costly Vertex Drug Is Denied, and Medicaid Patients Sue