When a patient is a source of income

The problem with medicines for rare diseases

How does Alexion make so much money if her main medicine helps less than 11,000 people?

Translated by Vyacheslav Golovanov, GeekTimes

Kerry Owens, a doctor from Oklahoma City who specializes in kidney problems, was stunned by a call received on her mobile phone in September 2015. He and a team of specialists treated a woman who had recently become a mother from the nearby town of Enid, whose health began to deteriorate after giving birth. Doctors performed countless tests, but could not determine the cause of the problems. For some time they were worried about the fact that it could be an extremely rare and fatal blood disease, atypical hemolytic-uremic syndrome (aGUS), from which 1 out of 500,000 people suffer every year. They prescribed the patient the drug "Soliris" [with the active ingredient eculizumab], which was recently approved for use. But her health continued to deteriorate, and they stopped using the medication.

Owens received a call from a sales representative of Alexion Pharmaceuticals Inc., which manufactures Soliris in New Haven. Soliris is one of the most expensive medicines in the world, its annual course costs from $500,000 to $700,000 [in the USA – approx. transl.].

The seller argued with the methods of treatment. He insisted that Owens continue to use Soliris, quickly speaking into the phone information about the condition of the mother's internal organs, which the doctor did not pass on to the manufacturer of the medicine. How do you know that? thought Owens. She monitored the patient's condition together with several hematologists and was not impressed by the seller's presentation. "I was completely taken aback by how persistent and cheeky he was," says Owens. "Never, before or after this incident, have I experienced anything like this."

Alexion is a rapidly developing company in the market of "orphan drugs" [drugs for the treatment of rare diseases, the production of which is unprofitable; US law provides for the provision of certain benefits to pharmaceutical companies producing these drugs – approx. perev.]. It is a fast-growing niche in the pharmaceutical industry. In the USA, the drug is given the status of an "orphan" when it is needed by no more than 200,000 people across the country. Orphan drugs took a disproportionately large share of the drug market in 2014, 41%, according to a Johns Hopkins University study. By 2022, worldwide sales of orphan medicines should double and reach the figure of $209 billion, according to the forecasts of the consulting company Evaluate Ltd.

These medicines have helped millions of people. Patients with aGUS, for example, had to undergo kidney dialysis for years and sometimes die from fatal blood clots before Soliris appeared on the market. "This is the best outcome–altering medicine I've seen since I graduated in 1985," says Gianluigi Ardissino, a Milanese doctor who has treated more than 70 patients with Soliris.

But the advent of orphan drugs has led to a geological shift in the cost of treatment. The average patient in the US last year using an orphan drug spent $136,000 on it, and this cost has increased by 38% since 2010. The volume of Soliris less than a teaspoon, which is administered to a patient at a time during a 35-minute session, costs more than $ 18,000, and a patient may need 26 such sessions per year for the rest of his life. [Interestingly, in Europe you can buy a German equivalent for €5,600 or a Swiss one for €2,400 per ampoule – approx. transl.].

Alexion company, almost all of whose income is based on sales of this single drug, has earned unrealistic amounts. In 2016, its revenue was $3 billion, and its market value of $24 billion puts it on a par with companies such as HP Inc. [computer and printer manufacturer] and Yum! Brands Inc. [specializes in fast food; brands: Taco Bell, KFC, Pizza Hut, WingStreet].

The need to rely on a small number of customers for their sales, each of which is potentially worth millions of dollars, leads to side effects. For years, Alexion's sales technique has been so assertive that aggressive calls to doctors can be considered their most innocent misdemeanors. The boundaries of ethics crossed on a routine basis, which worried many people working there – this is evident from interviews conducted with 20 current and former employees, as well as 2,000 pages of internal documentation.

Last November, Alexion announced an internal investigation into sales practices. As a result, it became known from the press release that the company's management could not "find the right tone" for sales. Within a few months, the chairman of the board of directors and co-founder Leonard Bell, its executive director, financial director and head of the control service left the company. In March, the company hired Ludwig Hentson, an industry veteran who shook up the control service and appointed a head of culture "to redefine the culture of the organization with an emphasis on integrity, trust and following the rules," as it was written in a letter sent to Bloomberg. On May 23, the company announced the departure of its commercial director, head of research, head of HR and a new CFO.

Hantson refused to be interviewed for this article and did not answer specific questions, so it is not entirely clear what caused such a strong reorganization. But the company's past seems to be catching up with it, especially abroad, where the company receives up to 60% of its revenues – and where, according to former employees, it behaved in a blatant way. On May 8, Brazilian police broke into the company's offices in Sao Paulo as part of an investigation into its commercial activities.

Public outrage at the skyrocketing prices of vital medicines has been shaking the entire planet for years. But much less attention is paid to the insane events of the level of "Glengarry Glen Ross" [an American play and its film adaptation about the difficulties of desperate realtors – approx. perev.], occurring in companies like Alexion, whose medicine costs more than most new homes, and in some parts of the world is delivered under armed guard.

Until the early 1980s, pharmaceutical companies largely ignored the niche of 7,000 orphan diseases. There was no commercial point in dealing with deadly but rare diseases like Huntington's disease or muscular dystrophy, when such widespread and chronic diseases as arthritis, heart disease and diabetes provided a good flow of patients and insurance companies willing to pay bills.

To draw attention to the ignored areas, Congress in 1983 passed the "Orphan Drugs Act", which promised drug manufacturers federal grants, tax deductions and seven years of exclusive sales of new drugs for rare diseases (for simple drugs, this period is limited to three years). In the following 34 years, about 600 orphan medicines were approved in the United States, compared with 10 medicines in the ten years preceding the adoption of the law.

But government-protected monopolies, together with desperate patients, have led to the appearance of today's drug prices. Genzyme Corp started this trend in 1991, demanding $150,000 for a year's supply for the treatment of Gaucher disease, which weakens bones and internal organs. In 2016, Biogen Inc began charging $750,000 for the first year of using the drug Spinraza for the treatment of spinal muscular atrophy. "Many drug manufacturers perceive the situation as an empty signed bank check, and demand as much for the medicine as they consider possible," says Rina Conti, associate professor of health and economics at the University of Chicago.

Leonard Bell, former director of Alexion, in 2016

Despite the contradictory price situation, it is considered politically unprofitable to flirt with the "Orphan Medicines Law". The law makes it very effective to find and focus the best scientific minds on the treatment of long-ignored diseases. It is believed that such drugs should cost more than drugs for common diseases, because companies need to discourage research and development and earn from a small customer base. Government health programs groaning from the high cost of medicines, it remains to figure out how to bargain with companies or make medicines available only to the patients who need them the most.

In many ways, Bell is a perfect example of how drug subsidies should work. When he founded Alexion in 1992, he didn't have the opportunity to take a lot of risks. Then he was 33 years old, he worked as a cardiologist, he had three children aged from 1 to 7 years and a position at Yale University under a limited-term contract. Bell was very interested in such an immune response as a complementary cascade, which helps the blood get rid of damaged cells and bacteria. Sometimes this protective reaction can harm a person, for example, when a transplanted organ is rejected. If he could figure out how to limit the cascade in certain cases, Bell believed, he could solve many medical problems.

It was difficult to find funding for the study, and Bell barely stayed afloat. "As with most things in biotechnology, six months after leaving Yale, everything started to fall apart," he told Bloomberg in 2015. 

Alexion began collaborating with another company in an attempt to change the internal organs of pigs so that they could be transplanted to humans. Although the attempt was unsuccessful, it helped Alexion obtain funding from private investors and the government to continue research into the relationship between the immune system and blood cells.

Bell brought the company to the stock exchange in 1996. Before the launch of new products, years of research were needed, but investors were willing to take risks in the light of possible profits if Alexion could reveal the secrets of the complement system – Barry Luke, former vice president of finance and administration, recalls this.

In 2002, Alexion had a breakthrough. A British researcher has shown that one of the therapies really helped patients suffering from a rare blood disease, paroxysmal nocturnal hemoglobinuria (APG), in which the patient's complement system attacks red blood cells. About 35% of patients die within 5 years after diagnosis. When Soliris was approved by US regulators for the treatment of APG in 2007, bringing the drug to the market took 15 years and $850 million. In 2011, Soliris was also approved for the treatment of aGUS.

In 2007, Wall Street analysts were eagerly awaiting the announcement of Soliris' market value. Most thought it would cost more than $100,000. But Alexion calculated all the factors, for example, saving patients on trips to the hospital and hemotransfusion. When the company announced the price of treatment at $389,000 per year during a teleconference, one analyst from Credit Suisse Group AG was so stunned that when it was his turn to ask a question, he said: "Sorry, I have no words. Could you repeat that number?"

Soliris saved the lives of patients like Michelle King from Canada. When she turned 21 in 1988, she was knocked down by weakness while hiking in New Zealand. After two years of tests and medical appointments, she was diagnosed with APG. She started doing blood transfusions to restore red blood cells and taking steroids to slow down the immune system's attacks on her body. It helped a little, but she had very little strength left, and the steroids made her irritable, at the same time leading to swelling of her facial features. She tried to work in administrative positions to pay the bills. "In the afternoon, I sometimes went home to sleep because I felt very tired," she says.

In 2005, she was tested for the drug Soliris, which does not cure APG, but is able to restrain symptoms. "From the first dose, my health changed," says King, who has been using the drug ever since. The energy returned, the swelling of her face disappeared, she took up horse riding. "It's a magic medicine for me."

The company immediately stepped up sales attempts. "In 2007, the main question of the company was – how can you build a business on this? Aren't only a few hundred people in the world suffering from APG?" – said the former CEO of Alexion, David Hallal in an interview with Bloomberg in 2015. "We haven't slept for 4-5 years."

For the new employees of the company, the sales culture seemed too stressful. Managers forced them to challenge the opinion of doctors, many of whom had never seen patients with such rare diseases, and "turn no into yes," as one of the sellers who quit in 2016 recalls. If the doctors did not think that the patient was sick enough to prescribe such an expensive medicine, the sellers had to warn the doctors that their patient could die.

The company carefully monitored key details – for example, the number of tests performed by doctors on the market. Sellers distributed confusing spreadsheets with thousands of rows containing information about potential patients, including dates of birth, data on symptoms, doctors and hospitals. Sometimes patients were identified by their initials.

A team of nurses worked together with the sellers. Pharmaceutical companies often hire professional medical staff to help in cases with complex treatment. But licensed nurse practitioners are generally required to put the interests of patients above the profits of their employers. To avoid conflicts, most drug manufacturers separate nurses from sellers. And in Alexion, the medical staff reported directly to the sales department, and the task of capturing and retaining patients was often assigned to them, because they had access to patients.

Several former employees of the company told how during Friday sales meetings, managers brought together salesmen and nurses to discuss clients. If someone finished taking Soliris, managers attacked the nurse who worked with this patient: What have you done to ensure that the patient does not get off the medication? Have you told the patient that if the treatment is stopped, he can earn a fatal blood clot? Have you tried to redirect the patient to another doctor who could resume treatment? "A flame was burning under you, and sweat was running down your back," says one of the nurses, who had previously worked with the company for a long time, who asked to remain anonymous for fear of retaliation.

Stacey is a 43-year-old housewife from Vancouver. In 2004, she was diagnosed with APG and began blood transfusions. When Soliris appeared, she really wanted to try it. But the results of blood tests showed only minor improvements. When she told the nurse from Alexion that she and the doctor decided to stop treatment, the nurse started calling her and dissuading her from it.

"I felt like they were trying to intimidate me, saying, 'Oh my God, you don't have to stop, you can get a blood clot and die,'" recalls Stacey. – I say: But the medicine does not help. I know it's all about dollars."

Having a cure for only two very rare diseases, Alexion has long been facing a question that annoys most orphan drug manufacturers: how to find these rare patients and refer their doctors to our medicine? (One of the early PR techniques of these companies was advertising their rare diseases in the TV series "Dr. House"). To find these "needles in a haystack," as Bell called such patients, sellers spent most of their time talking to doctors, persuading them to look for symptoms and persuading them to be tested for rare diseases. Alexion intended to convince doctors to conduct APG and aGUS tests more often – and to find ways to get into the results of tests that are usually available only to the patient, the doctor and the laboratory.

Sellers had to force doctors to send tests to preferred "partner labs," as evidenced by several former employees of the company and internal documents. Unbeknownst to the patients and many doctors, several of these "preferred" laboratories have agreed with Alexion to provide them with copies of the tests. The patient's name was removed from the copies to avoid violating the laws. But sometimes they contained everything else–age, gender, zip code, hospital name, doctor's name and test results. And this gave sellers the opportunity to find patients who would otherwise be difficult to find.

When the results of APG and aGUS were received by Alexion, the diagnostic team, about five people, passed the information to the sales department, and then it reached the doctor listed. "It was like the Normandy landings," says a former customer relations officer. Pharmaceutical companies have been seeking access to data from laboratories for years, but they have resisted, says Adam Tanner, a staff author at the Harvard Institute of Numerical Sociology and author of the book "Our Bodies, Our Data" [Our Bodies, Our Data]. In 2010, the behavior of laboratories changed. They tried to find ways to increase losing profits, and under the guise of helping drug manufacturers in their research, they began selling unnamed test results to data aggregators and directly to pharmaceutical companies.

In the case of Alexion, this collaboration began with the Dahl-Chase Laboratory from Bangor, Maine, helping to develop a test for the detection of APG. Further cooperation extended to other regional laboratories, including Swallowtail Diagnostics from Oakland, as well as to national ones, for example Laboratory Corp. of America Holdings, known as LabCorp, and Quest Diagnostics Inc. Even Mayo Medical Laboratories, a division of the non-profit Mayo Clinic.

In April, in response to requests from Bloomberg, Kim Diamond, a representative of Alexion, sent a written response in which, in particular, it was stated: "Such a partnership with laboratories is critical, since APG and aGUS are life-threatening, extremely rare diseases that few people know about in the medical environment." But on May 16, after Bloomberg sent additional questions, Diamond announced that the company was temporarily stopping data collection due to a review of the relationship with laboratories. She declined to discuss the reasons for this decision.

Managers at Dal Chase and Machaon did not respond to calls and emails from Bloomberg. Quest Diagnostics and Mayo reported that their data exchange contracts are confidential, but they are subject to laws. LabCorp could not confirm or deny the existence of a data exchange with Alexion.

All over the world there is a network of organizations fighting for the rights of patients, offering their support and helping to accelerate the approval of medicines. They also offer companies another method of finding potential customers. In 2015, Alexion helped about 75 such organizations with money, according to information from its website.

In the USA, the National Association of Rare Diseases (NORD), which appeared in 1983 to lobby for the Orphan Drug Law, remains one of the most influential organizations helping patients with rare diseases. With grants from Alexion, NORD holds meetings in different parts of the country about APG and aGUS several times a year, at which patients and their families meet, offer support to each other and listen to reports from medical experts. "People felt very isolated," says Maria Hardin, former vice president of patient services at NORD, who conducted several APG patient meetings with Alexion money. "The meeting of such people turned out to be very beneficial."

Alexion grants pay for transportation, housing and meals. Usually, patients and their families come to the hotel in the evening, and gather for lunch with the meeting organizer from NORD. The next day, they gather for an informational meeting, which is usually attended by a doctor, also paid by Alexion, who speaks to the audience and answers questions. Alexion and NORD discussed the candidacy of a doctor, as Hardin and a former Alexion employee say. Alexion wanted representatives of the sales department to be at the meeting, but NORD resisted this. But instead, NORD agreed to have nurses present at the meeting. "I don't like this decision, but I couldn't influence it," says Hardin.

According to two former nurses who attended these meetings, they were instructed to collect lists of participants with names and contact information. A few days after the meeting, the company contacted those who did not take Soliris to start negotiations in order to get them hooked on the drug. A representative of NORD, Jennifer Huron, says that her organization protects the privacy of patients and is not aware of the fact that nurses collect contact data.

Overseas, Alexion has developed even closer ties with patient rights organizations. A particularly gloomy picture of her actions is painted in Brazil, where the sale of orphan medicines is stimulated by perverted methods.

To sell medicines in Brazil, pharmaceutical companies must negotiate a retail price with the government. To avoid this, Alexion has been delaying the registration of Soliris for years, according to five of its former managers and directors. According to the Brazilian Constitution, which postulates that "health is the right of all people and the duty of the state," citizens can sue the government to get medicines that have not yet received regulatory approval. If a citizen wins the court, the government pays for the medicine without discussing prices [medicine and medicines prescribed by doctors in Brazil are free for citizens – approx. transl.].

Most citizens do not have the funds for such lawsuits, so Alexion organized and sponsored a group of patients called the Association of Patients with APG. The firm's main lawyers, who handled cases on behalf of patients, initially worked at a law firm owned by the sister of a local Alexion company manager, according to a 2014 analysis conducted by a third-party law firm that Alexion hired to evaluate its business in Brazil.

In 2012, the company redirected funding to the larger AFAG group. And although AFAG works with other pharmaceutical companies, Alexion spent 1.672 million Brazilian reais ($500,000) on charity in 2014-2015. This amount amounted to about 30% of the AFAG budget, according to the group's president, Maria Cecilia Oliveira. In 2016, donations increased to 2,675 million reais. These donations have opened up special access to data. According to internal documents, a manager from Alexion appeared at AFAG every week and studied the personal files of patients. The manager informed AFAG which cases needed to be promoted and took all the new patient information with him to Alexion. Few doctors, patients or government officials have realized how much Alexion affects AFAG – that's what former managers of the company say.

An outside law firm concluded in 2014 that Alexion's operations in Brazil were "unethical." But they were very profitable. By the end of 2016, the company planned to plant more than 600 Brazilians on Soliris, which would give them a profit of $200 million, according to internal documents. The Brazilian health care system is unable to easily digest such costs. Soliris, a drug for the treatment of 0.0003% of the country's population, took 30% of the budget for the purchase of medicines in 2013 and 2014.

Now the Brazilian police allege that some of the lawsuits funded through Alexion's donations to AFAG were fraudulent, and used incorrect diagnoses to create fictitious patients – as stated in the request for a search warrant that got to Bloomberg. In one case, armed guards regularly delivered much more Soliris than was needed to a woman who was diagnosed with aGUS – and, as it turned out later, incorrectly. Over many years of deliveries, she has accumulated 2.2 million reais worth of medicines in her refrigerator. It seemed strange to her, and in the end she turned to the authorities. Brazilian police also searched AFAG offices on May 8. Oliveira confirmed the fact of the searches in a telephone interview and said that AFAG was cooperating with the authorities and had done nothing wrong. Diamond says the company was operating "in compliance with local laws" and that "no criminal or administrative violations have yet been charged." In a conversation with investors on May 16, the company's CEO Hentson said that Alexion was trying to improve its work with patient groups in Brazil and elsewhere.

Alexion grants in favor of foreign groups have also attracted the attention of US regulators. Over the past two years, the Securities and Exchange Commission has investigated cases of grant payments by the company in Brazil, Colombia, Japan, Russia and Turkey, examining possible violations of the Law on Corruption Abroad.

Despite the problems, Alexion enjoys the hot attention of his fans. Stacey, a Washington State housewife who was pressured by a company nurse after she stopped taking the drug, tried it again a few years later. For some inexplicable reason, it worked much better the second time. Medicine "is life for me," she says. "You can't evaluate it in money."

But, in fact, it is possible and necessary to evaluate it with money. Every country is trying to work out a reasonable strategy – from the Canadian committee on drug prices (which has been at war with Alexion over prices for years) and the New Zealand pharmaceutical agency (in 2013, the company was denied funding due to the price of the drug) to President Trump on Twitter:

"I am working on a new system that provides for competition
among drug manufacturers.
Prices will drop a lot!"

Trump has not yet talked about the details of the new system, but so far the main threat to orphan drug companies in the United States is the Republicans' plan to repeal Obamacare [Healthcare reform and patient protection in the United States]. The bill passed in May may bring back some lifetime restrictions on paying for the treatment of patients - which means people will have to pay for treatment out of their own pocket after exceeding the limit on medicines. This may force companies to lower prices.

Investors have not yet decided what to do with the investigations of Alexion's business practices and potential changes initiated by the new director of the company. Barclays Plc wrote in its report in April: "The investigation into Soliris' sales practices and the recent replacement of directors has led to chaos in investors' feelings." The stock has fallen 18% since the company announced internal audits in 2016, while on average biotech companies have risen 2%.

Hentson studies the company's most aggressive practices. After receiving a lot of questions from Bloomberg, he announced upcoming changes – for example, full-time nurses will now transmit information to the medical department, not the sales department. Analysts following the company, for example, Joffrey Porges from Leerink Partners LLC, are interested in whether the orphan drug manufacturer worth half a million dollars and 11,000 patients will be able to get out of this mess and not upset investors. "Everyone is afraid that if the company says goodbye to the old culture," Porges says, "it will lose in generating profits."

Portal "Eternal youth" http://vechnayamolodost.ru  31.05.2017