The Cost of Getting Personal

Early in my scientific career I was in a meeting to decide what one of our department’s new drug discovery projects was going to be. A team made a presentation on a prospective target, which was scientifically solid but was shot down because the potential market was too small. Not enough people had the disease, so we’d never be able to recoup our costs of finding and developing a treatment. It was certainly an eye-opener to a young, naïve scientist.

Since then, my career has taken place in what you could call the Genome Age. And one of the great promises of the Genome Age has been more or less “When we know peoples’ DNA sequences, we’ll be able to tailor drugs to their specific needs”. These days, it’s known as “personalized medicine”.

Personalized Medicine, Generalized

As a patient, I always thought this sounded awesome, like something out of science fiction. But as a drugmaker (and perhaps one weaned on the bottom line calculations like those above), I thought this sounded like a terrible idea. I’d want to make a drug that worked on everyone, not just a small segment of the population.

An approval by the FDA this week highlights the tricky nature of making drugs for small diseases. The Agency approved Vertex’s drug Kalydeco, which treats a rare form of cystic fibrosis. About 1200 people in the US currently suffer from this version of the disease, which arises from a genetic mutation. The FDA approved the drug ahead of schedule and called it a “breakthrough” – language very very rarely uttered by The Man.


This is great news for this patient population. The drug has been shown to be remarkably effective at diminishing symptoms and limiting disease progression. Well, maybe it’s not great news. The yearly cost for a prescription of Kalydeco is slated to be $294,000.


Why so high? Well, we don’t have all the numbers, but a drug like Kalydeco probably took about $500,000,000 to discover, develop, and produce and the company needs to make that back and then some if they’d hope to see a reasonable profit (and this doesn’t begin to take into account the billions spent on R&D projects that never make it to the marketplace).

Because of the small patient population, Vertex claims that it will be able to assign a case-manager to each prescription to help the consumers navigate the financial aspects of taking the drug and in certain cases, it will pay up to $80,000 for patients who are commercially insured but facing high co-pays and/or co-insurance costs.

I’m going to watch this drug with a lot of interest, because I think it will be a bellwether of how personalized medicines might make it in market. Will people and (more importantly) insurance companies pay for it?

If not, what happens to the dream of personalized medicine and so-called “orphan diseases”? You can imagine a scenario where the government supports research for indications that might be “non-profitable”, but spending money on things that might or might not work and that will only benefit small portions of society seems to be out of fashion these days.

Perhaps I’m still naïve, but I’d like to think that somehow we – drug companies, researchers, government, insurers and society – will be able to figure out a way to make this work, because NOT finding a way to get cures to patients merely because enough people aren’t suffering seems so 20th century.


25 thoughts on “The Cost of Getting Personal

  1. “The yearly cost for a prescription of Kalydeco is slated to be $294,000” My daughter has severe Crohn’s disease and has no insurance. She was on Remicade for a few years, but then it became ineffective. Her doctor lobbied for her and she was getting the infusions free of cost. She has been in the hospital, and near death, a number of times. She now takes Cimzia – two shots a month, again paid for by the company. But, still flares up and we are waiting for the next best thing to come down the pike. Perhaps the Hookworms will be the future treatment – see article

    • That link is pretty interesting — There’s a benefit to being exposed to things, especially when we’re young. I know that there’s a lot of interest in Crohn’s right now in a lot of discovery groups.

  2. It’s a scary-sci-fi thriller, yup. I have a friend with 3 of her 5 kids with CF, although I don’t know what kind. She married into a Mayflower family, so I imagine they could not only *get* the scratch but have connections that mean they never even have to pay. That’s what I know about old money:) I mean, nice “work” if you can get it!

    • mt — it’s interesting that Steve Jobs survived with pancreatic cancer for much much longer than most diagnosed cases. Why? Because money was no object to trying the latest treatments.

  3. Mitt Romney wipes his butt with $294,000. He could sponsor one cystic fybrosis patient and pay for 80% of their costs. How is someone with a devestating disease supposed to get a job that has those kinds of benefits? I think helping individuals instead of large charities should be the “new black”.

    My boyfriend heard that people during Christmas were going to stores like Target and Kmart and paying off the layaway of total strangers, especially if the layaway had gifts for children. Why can’t more people do this……..

    • amelie — the move towards individual charity is an interesting one. In some ways, I think it reflects a lack of trust between people and organizations — even charitable ones. And in an age where the internet makes options available, I think people with means are thinking “I’ll just do it myself”

    • Budd — it’s not always good knowing how the sausage gets made, but there are a lot of misconceptions (and some correct perceptions) about the drug business. It’s a conversation having with people at-large because it effects so many lives.

  4. Steve, I remember you telling me that psychiatric and other neurological drugs are a tricky business just as they are– but we already need personalized medicine, and the current method of trial and error is still simply awful. Both my father and I have horror stories about drugs that were supposedly great by the DSM and other references for the general population, but were harmful… almost fatally so, sometimes, for us.

    I don’t think you’re naïve– I think you’re idealistic, at best. You seem to have a handle on the potential problems and the reasons why this idea might not make it, in the short-term. In any case, I hope there’s progress, too.

    • jaklumen — i think there will be progress. The genome projects have been one of the real Big Science successes of our generation. Right now, one of the real struggles is figuring out how to deal with SO MUCH data. It’s a problem no one could imagine 30 years ago.

    • Thanks Lurker — I can tell you though that almost to a person, everyone that I’ve worked around cares about solving biological problems and finding treatments for disease. It’s a tough business with a LOT of failure, but the chance to get drugs into the clinic that can really help people is a huge motivator.

  5. Steve this was fascinating. I don’t know that I have read (or you have written) many posts about your work, etc. I read a portion of it allow to Rob. Just amazingly interesting.
    Cystic Fibrosis is awful, like many other diseases. The system will work – and the drugs will be given to those that need it. I am glad this opportunity has been created through the years of research.

    • LD — I don’t usually write too much about “the business” except when I find something that I think might interest more people at large than just insiders. Click on the “science” or “drug discovery” tags — there are a few others. I think there are a lot of incorrect assumptions about what goes on in drug companies and sometimes I think it’s worthwhile to give a peek behind the curtain.

  6. A while back, there was talk about making the research for orphan diseases “open source,” similar to free software on the internet. It was hoped that through government grants (which go to a number of academic and private research firms anyway), tax deduction offers, and private charity groups, drug and biotech companies would allow others to use their research to create medications and therapies for very rare but serious illnesses. Apparently that hasn’t happened, judging from what happened to Kalydeco. Yes, companies need to make a profit on a drug after all the research and trials invested in its production. But asking an individual who likely is not working because she or he is seriously ill—and many of these patients are children whose parents are already at the breaking point, financially, physically and emotionally—to pay hundreds of thousand of dollars for just one year’s prescription is insane. I realize the word “taxes” raises hackles in many quarters, but how many people would be willing to chip in one percent of their paycheck to fund drug coverage of this sort, especially if they knew who would benefit?

    • HG — I think that Vertex did get some early research dollars from the CF foundation to get the program started, but there’s not nearly enough to run a whole discovery-through-development program. The government and some universities have tried creating “drug discovery” departments, but academics don’t have much experience developing actual drugs (which is a slow laborious process that goes on long after the flare of discovery). I agree though, if we as a society think it’s worthwhile to treat orphan diseases, we as a society are going to have to pony up.

  7. Steve,
    As usual, a very well-written and informative article! Kudos to Vertex for seeing this project through, despite the small market. How many times have I seen an article in the popular press touting personalized medical breakthroughs and wondered what the chances were that they would ever reach actual patients given the economic realities of research, yet occasionally some companies manage to get it done. Although Vertex is not a giant like Pfizer, I think it helped a great deal for them to be a big enough company that their entire existence doesn’t ride on the success or failure of a single drug. Other smaller companies have found going after small markets very difficult, even if there seems to be a therapeutic benefit (Optimer comes to mind). But I am glad for each success – not just for those people reaping the immediate benefits, but also for the hope that each success will make it that much easier for a drug company to keep a program going, despite the limited market.

    • jaimie — thanks! it’s interesting that one of the things that I read pointed out that Vertex could take on the development and marketing of the drug BECAUSE the market was so small — they don’t need a salesforce or marketing. It’s a fascinating turnaround to the “standard” blockbuster proposition that we’re used to seeing from big pharma.

  8. I’m sorry I was so late reading this! I saved it in my email box cuz I wanted to be able to concentrate on it.
    Very very interesting. And I sure HOPE that society gets further away from the “profit margin” way of thinking we seem to be sunk into lately. I love the idea of individuals taking the reins and solving some problems.

    I just about fell out of my chair, your elephant seal banner is so cute!

    • There’s a line between reasonable profit and greed. I’m not sure anyone knows what it is. Drug companies deserve to make profit just like Apple does. But the feeling about the former is so negative and no one seems to care that Apple posted the most profit per employee ever. Ever.

      I have the elephant there as something to aspire to. :)

      • I care. Apple has certainly made computing very accessible to the masses, but I don’t agree with all of their “walled garden” policies and some of their recent lawsuits.

        An apt comparison– maybe one you might be thinking of– was the observation that many OWS protesters were using Apple products. Would the sentiment be different if the computers were all running Linux? (Or better yet, the hardware was all secondhand?)

        • jaklumen — it’s a great comparison to the OWS protesters and Apple. Somehow Apple gets a free pass because it’s “hip” and many among the OWS self-identify with their products. It’s perhaps the greatest marketing win for a company in the last 20 years.

  9. Steve – as someone perpetually enrolled in clinical trials (just got off an AKT-inhibitor trial, am now on a Pan-HER inhibitor + monoclonal anti-body trial in Denver), whose life is spent hopping from one drug to another, I just had to post a link to your post on my blog.

    It’s a tragedy to have an orphan disease or to have end-stage disease and not have the time to wait for new therapies to emerge, or not have the resources to access them. I’m feeling pretty lucky, having a target mutation for which drugs are actively being developed (and have health insurance), but I’ve lost quite a few friends who ran out of treatment options. The fact that you work in such a mind-boggling field completely justifies the number and intensity of your cocktails.

    I raise my snooze of single malt to you and others whose hearts are in the science.


    • Jazz — I think sometimes it’s easy to lose track of the patients when you get involved in drug research. We never see the clinical side and only see mostly sterilized data. In one of the last projects I worked on, we were able to get some anecdotes from patients and clinicians and it was amazing to hear what a difference the treatment made in peoples’ actual lives. As a researcher, it really lights a fire and makes every hurdle and set-back feel that much worse.

      Thanks for the link and coming by. All good thoughts to you during your trials.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s