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In the letter, released Monday, Sanders asked Catalyst CEO Patrick McEnany how many patients “will suffer or die” due to the company’s decision, calling it “not only a blatant fleecing of American taxpayers, but…also an immoral exploitation of patients who need this medication.”
The drug, Firdapse, treats a condition known as Lambert-Eaton myasthenic syndrome (LEMS). It’s an autoimmune disease that affects the body’s ability to transmit nerve signals to muscles. An estimated 3,000 individuals in North America have been diagnosed with the disease.
“By setting such a high price and forcing production and distribution of the older, inexpensive version to cease, you are threatening access that patients had to a cheap version of this product, and handing a completely unwarranted bill to American taxpayers,” Sanders wrote.
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In a statement, Catalyst said it is working on a response to Senator Sanders’ letter; it did not address the issues raised in it. In 2015, the New York Times reported Catalyst had given an investor presentation predicting it could make $300 million to $900 million a year from the drug, assuming it could gain a monopoly on treatment. McEnany said the company would offer financial assistance to any patients who couldn’t afford the medicine, the paper reported.
Catalyst announced its price for Firdapse in December, shortly after the Food and Drug Administration announced the company could begin exclusively marketing the drug. Previously, some American patients suffering from LEMS were able to gain access to an effective but unlicensed treatment for a few hundred dollars from drug compounding companies, or for free from a New Jersey-based pharmaceutical company, Jacobus.
Donald Sanders, a professor of neurology at Duke University who has treated LEMS patients, has said it’s cheap to manufacture the drug. He said he could not understand how Catalyst can justify its pricing.
“I view it as a tragedy for our patients whose lives have now been disrupted by the uncertainty that they will be able to continue getting the drug,” he said.
Catalyst is able to charge such a high amount through the Orphan Drug Act, passed in 1983 to spur development for rare drugs by offering monopolies on treatment. A 2015 Miami Herald story noted that such high prices are common for orphan drugs to recoup the high costs of development and approval.
Nicholson Price, an assistant professor at the University of Michigan who specializes in law surrounding innovation in the life sciences, said Catalyst would likely counter by saying it was responsible for spending the money to get the treatment formally approved.
“In an ideal state, we’re not giving patients drugs for which we don’t have rigorous evidence that it works,” he said.
But he said he has noticed a change in approach from some drug industry executives who formerly shied away from this kind of sticker shock, even if they could. In 2017, pharma investor Martin Shkreli came under fire for raising the price of Daraprim, which is used to treat rare cases of toxoplasmosis, 5,000 percent from about $13 to $750. Shkreli was later indicted on unrelated securities fraud charges.
“The idea of, ‘I have a moral duty to make the most money for my shareholders as the CEO of a publicly traded company—I think that is a strand of thinking of business ethics that is hugely problematic.”
Still, he said, taxpayers end up bearing the cost of these types of increases, whether through government or higher premiums.
In an email, Ted Burns, a neurology professor at the University of Virginia, said these kinds of pricing decisions set dangerous precedents.
“Remember almost in one in 10 Americans has a rare disease,” he said. “You don’t need to be good at math to know that we can’t afford to pay a few hundred thousand dollars per year in drug costs for one in ten Americans.”
Duke’s Sanders said he expects the issue of skyrocketing drug prices to gain momentum heading into the 2020 election.
“I think it’s great that Bernie has taken this on, he said. “I’ve been hoping a prominent politician would see the benefit, and I’m not surprised Bernie has done it. I expect that other potential presidential candidates will be finding other healthcare issues to campaign on.
Catalyst was formed in 2002, and began trading on the NASDAQ exchange in 2006. Shares have never surpassed their opening day, Nov. 10, 2006 price of $6.14. McEnany is the largest individual shareholder, according to filing statements.
Shares closed down nearly 6 percent Monday.