How pharmaceutical company Alexion set the price of the world's most expensive drug
Key Excerpts from Article on Website of CBC (Canada's PBS)
Posted: July 3rd, 2015
What if your life depended on a drug that cost half a million dollars a year, every year, for the foreseeable future? That's the price of Soliris, one of the world's most expensive drugs. It is the only medicine available for people suffering from two ultra-rare diseases. And for both diseases, Soliris is not a cure, but ... patients can go back to living normal lives. But only if they can get the drug, and many can't, because it is priced beyond the reach of almost everyone. So how can one drug cost more than the annual income of all but a tiny percentage of households? The reason is ... orphan drug pricing, where actual research and development costs are carefully guarded secrets known only to drug company executives. "Orphan" in this context refers to rare diseases [for which] the patient population was too small to attract the interest of drug companies. But now medications to treat these ultra-rare diseases are becoming more profitable than traditional drugs, because of ... a business model based on extreme pricing. The extreme prices of these new orphan drugs are largely arbitrary, and have very little to do with the development and manufacturing costs. Most drugs are based on scientific discoveries made in publicly funded research labs, by academic scientists. In case of Soliris, most of the research and development was done by university researchers working in academic laboratories supported by public funds. Soliris is Alexion's only drug, but it's a blockbuster, earning revenues of more than $6 billion in just eight years, and making Alexion one of the fastest growing companies in the world.
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