Life, Death and Enormous Amounts of Money BBC Scotland Investigates

This nurse has three small vials of medicine worth �9,000. Each

patient's bill for this one drug is �250,000 a year. There are scenes

like this across Scotland. Behind the smiles is a ci

circumstances drugs like these cost huge amounts and treat only a few.

They make drug companies a fortune, but are they bankrupting the vfs?

- NHS? The drug market is $50 billion and growing.

With Scottish health boards looking to make cuts, can we expect it?

expect we will be looking back and thinking, "Did we really pay that

for that small amount of benefit?". Are drug companies holding the NHS

to rand dom? Firdapse is an example of unbridled greed.

Tonight BBC Scotland Scotland investigates, life, drugs and

For thousands of of years plants like these formed the basis of our

medicines. But times have changed. This is an investigation into some

remarkable drugs and the amazing prices some companies are prepared

to charge for them. 30 years ago, if you developed a rare disease,

the chances are none of the big drug companies would have been

looking for a cure. It wasn't their worthwhile for a mere handful of

patients. But the US and the EU brought forward incentives to

encourage drug companies to fin treatments for the rare and brutal

diseases. They call them orphan drugs. Drug companies were given

fast-tracks through the clinical testing process, extra long patents

and a monopoly on supply. They were given tax breaks and subsidies,

extra help and encouragement to make the much-needed medicines. And

it worked perhaps too well. Today, drug companies are making billions

of pounds out of these orphan drugs. Many, but not all of them, are

remarkable medicines, but can the NHS in Scotland afford to keep

shelling out millions of pounds on them every year?

Lesley Loeliger is an electronics engineer. She used to travel the

world, now she looks after her family because seven years ago, she

was struck by a mysterious illness. I was having to be carried up and

downstairs. I was having to be dressed and undressed. I couldn't

even do that for myself. Sometimes when I was so bad and I was so

exhausted I couldn't turn over in bed. It was that bad.

What Lesley didn't know she developed an orphan disease. A

condition so rare it baffled her doctors for over 18 months. When

the diagnosis came, it was devastating.

He said you have paraxize monocturnal haemoglobin. PMH for

sport. It is a bone marrow disease with a survival rate of ten years.

To stop a deadly blot clot forming, less by was given transfusions

every six weeks. They kept her alive, but her quality of life

remained low. I ached the hole time. My muscles

were aching. I had difficulty swallowing and pains in my stomach

and headaches. At about that time I was also made aware of a drug that

was available for PMH. We were told it is not a cure for PMH but it can

give a person their quality of life back and that drug is Soliris.

Soliris is the world's most expensive drug. It costs about

�250,000 a year for each patient. It is made by the American drugs

firm. It spent 15 years and $800 million developing. It is the first

and only drug approved to treat Lesley's condition.

When I heard about the drug, I was told, you are not funded. You are

not likely to get it. It is one of the most expensive drugs. That was

the end of the conversation really, but the consultants were trying to

get me the drug. The Scottish Medicines Consortium

says Soliris isn't cost effective and does not recommend its use. The

drugs company says its its price is fair because it bore costs and

risks in the drug's development. They say the value reflects several

factors including that a third of patients died within five years

before Soliris was available and governments and private insurers in

over 35 countries recognise the life transforming value of Soliris.

The company says it continues to spend a great deal on the

manufacturer of the drug and on support for people with PMH.

Lesley's doctors were able to persuade the Health Secretary her

case was exceptional exception andal and -- exceptional and

Soliris should be prescribed. To me this drug is a miracle. My

family had to face the possibility of me going in ten years. My

husband had to face the chance of bringing up the children on his own.

My mum and dad faced the pont of lose -- possibility of losing their

daughter and I appear to be getting better. I am just so grateful.

Because it is so expensive, the Health Secretary only allows eight

other people with PMH in Scotland to get Soliris. Three other people

aren't so lucky. Their case isn't considered exceptional enough. One

thing is certain, it is an exceptional price tag. For people

who have been helped by a medicine like Soliris, it is worth its

weight in gold. The trouble is that for the National Health Service, it

costs more than 300 times its weight in gold.

But with so few patients, why is it worth making Soliris at all?

I asked Dr Kiran Meekings, a business analyst. She co-authored

this report on the future of orphan drugs. Soliris up until this year

is the world's most expensive drug and in 2012 it is estimated to make

make �1 billion in sales. Analysts think expectations is that it will

make up to �2 billion because of increased re-positioning into other

diseases. It can do this because it has a small number of patients, it

charges the high price. And that's just Soliris. There are

dozens of orphan drugs treat ago range of rare diseases. They are

special drugs and because they treat rare diseases they get

special treatment from lawmakers on both sides of the Atlantic.

Research subsidies, tax breaks, relaxed testing protocols.

The open drug market the moment is $50 billion US dollars and growing.

It is growing at 6% per year. Soon that's going to become a large sum

of money. With regards to the future projections, it would be

interesting to see what the market can bear because at some point

payers and reimbursers, there will be a ceiling on the prices the

drugs can procure. It is just when we reach them.

In the UK, the payers are us, through the NHS and that means the

drug companies are making millions. Here in Glasgow, they are holding a

national conference for the growing number of people who have been kept

alive by another orphan drug. It is called Imatinib. 15 years ago these

people's diagnoses, chronic myeloid leukaemia was a death sentence.

was diagnosed about three years ago and it came as a shock. I never

heard of CML. Life doesn't get any better. It is

a second chance of life. All of a sudden, you have got cancer, it is

not that bad. You got a little Tablet that can --

tablet that can control it. It made such a difference for myself and my

family and my friends. But is it worth it? To the patients,

yes. I think that cost whilst it is a

big factor, it has to be looked at the life it is giving to us. This

hit me out of the blue as it may well hit anyone who is out there.

When you have that phone call and you are sat down opposite somebody

who says, "I can give you a normal life and it is going to cost you

�25,000 ." You will take that and anyone watching this will take that.

But turning a a fatal condition into one that people can expect to

life life as long as us. Gleevec is a success story because it had six

independent orphan approvals which many it can realise over �4 billion

in one year. Gleevec now treats 200,000 people

worldwide. People who don't just have CML, but other cancers too. It

is forecast that people with CML will cost the NHS across the UK �2

to �3 billion over ten years. Is it right that orphan drugs should be

priced on this kind of scale? That would would pay for 25,000 heart

transplants. Daphne Austin knows the effect

these high drug prices are having on the NHS. She used to have to

make decision about which life- saving drug should be funded or not

funded during her time working there.

We now have drugs that are so highly priced, you are looking at

maybe spending, you know, �10 million for one person's treatment

for one drug over the course of their lifetime. And personally, I

think that's too high. I think we have lost some sense of proportion.

I think we have lost some sense of value about what things really are

worth. If we are paying very high prices and paying for a lot of very

high cost treatments, it means that other people people aren't getting

the care that they need. These drugs are costing the NHS

huge amounts. How do the pharmaceutical companies justify

the prices? Frances Macdonald is from the body

that speaks for the farl suitical industry -- pharmaceutical industry.

The figure for bringing any medicine to market is �1 billion.

The one medicine that brings it to market has to recover the cost of

those that didn't make it to market. Of those that start in phase one

clinical trials only one in ten will come through.

So where does that research Monday kwhri go? -- money. This is the

sort of science campus that any self-respecting university would

kill for. It covers almost 100 acres, it employs 2,500 people -

with the sole purpose of developing new medicines. Glaxo Smith Kline is

one of the biggest pharmaceutical companies in the world. Here in

Stevenage they carry out the earliest stages of drug

development.But I want to know if the cost of research justifies the

high price of orphan medicines. GSK we invest something like �4

billion a year in research and development throughout the company,

and of course we have a huge discovery capability and some of

the benefits of that discovery, those discovery activities, will

come through into our development of new treatments for rare diseases.

What is GSK's pricing policy for these drugs? We have developed what

we believe is a fair approach to pricing, to allow us to make these

treatments available to patients around the world. If GSK has a fair

price policy, does that imply that perhaps there are some companies

out there that are pricing drugs unfairly? I certainly can't comment

on other companies' pricing strategies. I can only comment on

our own. We believe that what we do is fair. It has a sound basis to it.

There's a clear framework in which we use information to inform us on

how we should price the medicine, and that pricing information, that

pricing proposal will go to payers and they ultimately will make the

judgment on whether they consider that to be a fair price as well.

The pharmaceutical industry says it spends �4.6 billion a year on

research and development. But are some companies using that as an

excuse to charge too much? The drug Diaminopyridine - 3,4 DAP for short

- is used for people with a rare muscle disease called congenital

myasthenia. Doctors in Britain have prescribed it for decades at a cost

of about �1,000 per patient per year. This woman - now a PhD

student at Lancaster University - was born with congenital myasthenia.

She's been on 3,4 DAP since she was a teenager. When I was 13, they

said they had a new drug they wanted to test with me, to see if

it would make a difference. I said, oh yeah, fantastic, anything that

will make me better. So I went in for a week with my mum, and yeah,

from there, I'm just like a new person ever since I've had it. I

have much better muscle strength, I have much better muscle control.

I've only been in hospital once since I've had it, in 10 years.

Siobhan's version of 3,4 DAP was made by small suppliers and the

drug was not subject to the same regulations as licensed drugs. But

US drugs company Bio Marin quite legitimately did get a license for

another slightly different version called Firdapse. Because Firdapse

has been licensed as an orphan drug, the drugs company can charge much

higher prices and has a monopoly of supply.They're charging up to

25,000 pounds a year for Firdapse. It's unclear if Siobhan's local NHS

trust will pay that. I remember when she told me, it was like the

longest hospital appointment I've ever had, and I don't think I said

a word after she'd told me, because I was just in shock and I just felt

sick. Siobhan says if she can't get her treatment, her life will be

seriously affected. I want a family, I want all the things any normal

young person would want for their future. For me personally, if they

say no that's not the end of the road. My family has gone as far as

to say if they need to they will sell the family home to make sure

that I can continue having it. going to have to say I think

Firdapse is, is an example of just unbridled greed. We didn't need

that drug. I mean I absolutely fail to understand why we pay so much

money for things. I mean most of the public health community try and

resist some of these high spends. But I have to say we haven't had

much success in doing so. And of course it means that then if we're

paying very, very high prices and paying for a lot of high cost

treatments it means that other people aren't getting the care.

Marin say Firdapse is a better drug than 3,4 DAP - which is not subject

to the same national regulatory or safety mechanism. They point to a

study which showed 3,4 DAP was found to deliver inconsistent

levels of the active drug. They also say the cost is capped at

�25,000 each for the two Scottish patients taking the drug, and

they've added value by setting up an eigh-year-patient registry. We

put a European-approved list of 66 orphan drugs to a leader in the

field of evidence-based medicine. Does he think they're all worth it?

The major thing that stuck out in my mind immediately was the cost,

the excessive costs. As he looked through the list he came across a

drug even I recognised. There's a particular drug called Ibuprofen

that many people will recognise over the counter, and that costs

about 8p per gram. Now you can use intravenous ibuprofen, same drug

just in slightly different form. It has to be injected, in children,

for a small operation and for patent ductusarteriosis - big word

but it's a little hole in the heart. Now, when that goes from the

generic form at 8p per gram to the actual intravenous form, the

licensed orphan drug, it costs �6,500. Why does it cost so much?

Because it, you can charge that, because you can charge that because

one of the things about the incentives is you actually have

exclusivity of the market once you get the orphan licence. A gram is a

large dose in the pharmaceutical world - a baby would be given less

than that. It's made by Orphan Europe. They say Pedea has been

specifically developed as a ready to use intraveneous formulation for

a very fragile patient population that is different to those who

normally use ibroprofen, that it has a very good safety profile and

that it is priced in a socially responsible way, reflecting the

drug's value and the cost of research. It seems that the special

incentives offered to drug companies to research and

manufacture unpopular medicines, have turned orphan drugs into a

lucrative part of the market. And the drug companies want us to

concentrate less on how much these drugs really cost. It's very easy

to talk about $200, $250k per patient per year in the US. It's

easy to say we make 90% gross margin. As an industry we need to

move the discussion from price to value. So the simple reality is we

need to. Just how much is this costing the NHS? Although each

disease may affect a relative handful of people, put together

more than 300,000 people in Scotland are living with an orphan

disease of some kind. We asked every trust and health board in

Scotland how much they spent on a list of orphan drugs. 11 out of 14

replied. They said they spent �17.6 million on these drugs last year.

Drug companies are businesses - they have a legal responsibility to

their shareholders to deliver dividends by making profits. These

little pills were born in the homeland of modern capitalism - the

United States of America. This is where the whole idea of orphan

drugs began and where much of the research and development happens.

Oregon's Health and Science University hospital is located -

James Bond-style - high on a hill above the city of Portland .It was

here a doctor found himself in the middle of the orphan drugs debate.

Dr Brian Druker helped develop Gleevec for his leukaemia patients

and fought to get it from the lab to the dispensary. He's something

of a hero to people with chronic myeloid leukaemia. Iit was our

tradition to write a letter to family members of somebody we lost

and every time I'd write a letter which was really difficult, I would

say I'm going to dedicate my career to making a difference, to doing

something that will be fundamentally different than what

we're doing today. 13 years ago Dr Druker helped develop Gleeve cand

carried out clinical trials here at OHSU, but then found an unexpected

problem in bringing the medicine to market. The biggest concern was

with the market size of about 5,000 new patients in the United States,

5,000 new patients in western Europe, how is a drug company ever

going to make back their investment for this small market of a disease?

But Gleevec did make it to market. And it's been highly lucrative,

turning into one of the top five best selling orphan drugs in the

world. Last year it earned Novartis $4.6 billion. So why do you think

Novartis feels able to pitch the price of Glivec as high as it is?

It's very simple, it's what the market will bear. It's very simple

and their, their responsibility is to their shareholders and to

maximising profits and to getting a return on investment to put back

into developing new medications. Novartis says Glivec has

fundamentally changed the outlook for thousands and that the current

price "reflects the value that it brings to patients and society. In

addition Novartis has supported more than 200 clinical studies

since Gleevec entered trials in 1998. In some ways it can seem

remarkable that orphan drugs get made at all. There is little

incentive for a pharmaceutical company to develop an orphan drug

at all. After all they can be tricky and costly to bring to

market. And then that market is just a handful of patients. Is that

why they cost so much? The US government has given huge subsidies

to its pharmaceutical industry for research and development - or R&D -

to help it develop and test orphan drugs. Money well spent. Or is it?

The high cost of the R&D is one of the reasons cited why the cost of

those drugs is so high. But I've come to Harvard Law School to meet

one professor who has his doubts. This man is investigating the drugs

industry as part of a Harvard centre looking at institutional

corruption. Research and development costs, known as R&D,

for new drugs, ranges between about �1 billion and �5 billion. The most

widely used figure is �1 billion and nobody really knows what their

R&D costs are and they make sure that nobody can know. Calculating

the exact cost of developing drugs is difficult. Professor Light

thinks �1 billion - the figure commonly quoted by the drugs

industry - is an overestimation, and only represents average

spending for the most expensive drugs on the market. So if you

correct for that distortion you're already down to about a third, a

third of a billion. Then there are the subsidies from the orphan drugs

law. $$WHTE That brings this figure down even further.r Then half of

their so-called R&D costs are actually an estimate of the profits

they would have made if they hadn't started the project in the first

place, or profits foregone. Those are what the drugs firms say they

could have made if they'd invested their money in the stock market

instead. So if you take that out, on the grounds that it's not a

legitimate part of R&D which I think there's a good argument that

it isn't, you're down to �100 million and that's one-tenth of

where we started. The goal of companies is to have scores of

blockbuster drugs, that is scores of drugs that sell over a billion

dollars each and orphan drugs can do that if you price them high

enough. The price of orphan drugs in many cases is very high. Why,

why do you think drug companies are charging so much? Because they can

get away with it. So what are we to take away from what the professor

told us? That despite the claims by some big drug companies that it can

cost as much as a billion pounds to take the drug to market, that might

not be the case and yet the price of some new drugs - particularly

orphan drugs - can be eye- wateringly high. The problem is

some of these drugs are blocking the market for innovation in new

treatments to come on-line because they're taking all the cost. We

can't afford any new treatment coming through that may have impact.

So what does the future hold? worst case scenario here is people

realise there are about 35 million patients that this applies to.

There are lots of orphan drugs and lots of orphan diseases still to be

tackled and actually we start swamping health care payers with

costs across the board with these very expensive drugs, and they get

overwhelmed and just say actually we can't look at any of these.

There's too many coming our way. Could medicines which save lives be

so expensive that they're bad for the health of the health service?

What does the industry say to that? Can ABPI put its hand on its heart

and say that all pharmaceutical companies that, are actually

pricing drugs fairly, and that maybe some of them are actually at

it? I don't think the pharmaceutical industry per se can

answer that question as you put it, but I would say that most drugs are

very reasonably priced, I think society should value the fact that

the medicines are being developed, and that there's benefit to the

patients. But society then has to say, do I want to pay more or do I

not? And that is a broad discussion. They have to say, do I value the

fact that parents might get back to work? Do I value the fact that this

child may have a better quality of life? They need to discuss what do

we want to pay for, and they need to assess, what do we consider

value nowadays for these drugs and not keep it too narrow.

Scotland's drugs bill has been rising - it's set to top �1.5

billion this year. And health boards have been told to cut this