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Brainstorm Health Daily: March 22, 2017

Greetings, readers. This is Sy at your service.

In late 1982, Congress overwhelmingly passed the Orphan Drug Act, which was then signed into law by President Ronald Reagan on January 4, 1983 – a long overdue New Year’s present for the collective of Americans with devastating rare diseases and their families, who had, until then, gotten the short end of the stick when it came to biopharmaceutical innovation and investment.

The landmark law signaled a paradigm shift in treatments for rare disorders which afflict 200,000 or fewer people. Since its inception, hundreds of drugs to treat genetic diseases, scourges stemming from rare protein deficiencies, and a collection of other maladies have made their way onto the market and provided hope to countless families.

But as with many incentive systems – the Orphan Drug Act gives firms access to beefed-up patent and market exclusivity rights and imposes less stringent clinical trial requirements for treatments with an FDA orphan drug designation – there’s the potential for abuse. And after a growing chorus of complaints that some pharma companies are gaming the system, the Government Accountability Office (GAO) has now agreed to officially investigate the issue.

The GAO investigation was requested by a number of prominent senators, including Orrin Hatch (R-Utah), Chuck Grassley (R-Iowa), and Tom Cotton (R-Arkansas), who sent the agency a letter earlier this month requesting the probe.

“While few will argue against the importance of the development of these drugs, several recent press reports suggest that some pharmaceutical manufacturers might be taking advantage of the multiple designation allowance in the orphan drug approval process,” the senators wrote.

So what does “taking advantage” of the orphan drug system look like? Consider the very recent example of Marathon Pharmaceuticals, which snatched up a common, cheap steroid available throughout the world (but not on the market in the U.S.), won an orphan drug designation by testing it out as a treatment for the symptoms of Duchenne muscular dystropy (though not as a cure for the disease’s root cause), and then immediately gouged the list price to $89,000 upon winning FDA marketing approval. (Marathon has since agreed to sell off the treatment to another firm.)

But small biotechs like Marathon are far from the only perpetrators. In fact, an NPR report from January highlights how major drug makers like AbbVie, Otsuka, Bristol-Myers Squibb, and others have won orphan drug designations for medicines that treat common conditions like psoriasis and psychiatric disorders. Even therapies like Allergan’s Botox have orphan drug status for certain disorders, allowing them considerable market reach beyond their already-blockbuster sales.

This has been a known practice in the industry for a while. Now, it’s going to get a thorough accounting.

Read on for the day’s news.

Sy Mukherjee
@the_sy_guy
sayak.mukherjee@fortune.com

DIGITAL HEALTH

The billionaires of health tech. Forbes is out with its newest list of the world’s richest people, and as you might suspect, a fair number of health-related folk made the cut. When it comes to health care technology specifically, this year’s rankings include Dell chief and founder Michael Dell (#38), controversial billionaire doctor Patrick Soon-Shiong (#51), Epic Systems CEO Judy Faulkner (#867), and Cerner co-founder Neal Patterson (#1,376). Check out Forbes‘ full list. (Forbes)

Introducing HHS’ new secretary for health care technology. Former Republican Louisiana Congressman John Fleming has been tapped by the Department of Health and Human Services (HHS) to serve as the next deputy assistant secretary for health technology. Fleming, a physician, will be part of the team that oversees critical health IT infrastructure issues such as interoperability and regulations such as the “meaningful use” program for electronic health records. “It’s clear there’s a lot of work to do, and they’re anxious to get somebody in place and start activating this,” he said in an interview with NOLA.com.

INDICATIONS

Former FDA chief Califf’s new gig. Dr. Robert Califf was not long for the Commissioner perch at the Food and Drug Administration. Fresh out of work, he’s already moved on to a new role as chair of the People-Centered Research Foundation (PCRF), a group that (as the name implies) is seeking to improve medical research by incorporating more patients through partnerships and the use of health data tools. The new nonprofit will work with PCORnet, which is in part funded by PCORI, to make patient-centered health outcomes research more efficient. “PCRF can respond more effectively and efficiently to the research needs of a variety of research funders and sponsors. PCRF will integrate people into all phases of research and the learning health system. Patients, participants, patient advocates, and caregivers will constitute a meaningful percentage of our board; be involved in leadership roles in all committees; and participate in the development and execution of the research,” wrote Califf. (FierceBiotech)

Akashi can proceed with its Duchenne trial after patient death. About a year after a clinical trial patient death, Akashi Therapeutics has gotten the go-ahead from the Food and Drug Administration (FDA) to resume studies of an experimental drug to treat Duchenne muscular dystrophy (DMD). CEO Marc Blaustein says the firm will resume studies as quickly as possible, and that with the help of regulators, Akashi has been able to figure out what might have gone wrong with the patient who died. Evidently, an anti-nausea medication that the patient was on masked early warning sign side effects which eventually snowballed into dangerously low blood pressure, which then cause all sorts of other complications. Patients in new trials of the drug, HT-100, won’t be allowed to take anti-nausea medications. (Xconomy)

THE BIG PICTURE

Can a doctor out his or her patients? Medical privacy is always a sensitive issue. It can become much more serious for LGBTQ minors who worry that their doctors may out them to their parents. So is this something physicians can actually do? It’s complicated, according to U.S. News & World Report. State laws and regulations vary widely when it comes to the kind of medical treatment minors can seek out without the consent of their guardians, and HIPAA establishes that parents own their children’s medical records while they’re still minors. Ultimately, precise communication between a doctor, his or her patient, and that patient’s parents when it comes to proper boundaries and standards can be essential to securing privacy. (U.S. News & World Report)

U.S. infant mortality falls to new low. The U.S. infant mortality rate fell 15% between 2005 and 2014, according to a new report from the Centers for Disease Control (CDC). There were just 5.82 deaths per 1,000 live births in 2014. Still, there a number of prominent socioeconomic gaps when it comes to the mortality rate. For instance, the death rate for children of non-Hispanic black women is still double what it is for non-Hispanic white women (despite a significant drop in the last decade). (Fortune)

Simple Obamacare repeal would lead to fewer coverage losses than Trumpcare. The New York Times‘ Margot Sanger-Katz makes a very astute observation: according to the Congressional Budget Office (CBO), a clean, simple repeal of Obamacare would actually lead to one million fewer uninsured Americans compared with the American Health Care Act (AHCA), aka Trumpcare. While CBO projected that the AHCA would cause 24 million people to lose coverage relative to current law by 2026, that figure is just 23 million under a simple reversal of Obamacare. Of course, exactly who would become uninsured varies widely depending on the scenario, with the AHCA having an outsized effect on people with employer coverage and the poor and elderly. (Fortune)

REQUIRED READING

9 Women Died of Rare Cancer Linked to Breast Implants, FDA Saysby Madeline Farber 

Edamame Is Being Recalled In 33 States Due to Listeria Concernsby Mahita Gajanan

Elon Musk Wants NASA Bill to Include Even More Funding for Marsby Alana Abramson

Neil Gorsuch Gets Grilled On His Opinion of Women Who Take Maternity Leaveby Claire Zillman

Produced by Sy Mukherjee
@the_sy_guy
sayak.mukherjee@fortune.com

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