COVID VaccinesReturn to WorkMental Health

The FDA Just Approved One of the Most Expensive Drugs in the World

April 28, 2017, 3:53 PM UTC

Welcome to the latest drug price scandal: a rare disease treatment with a list price of more than $700,000 per year.

The Food and Drug Administration (FDA) on Thursday gave its green light to the medicine, BioMarin Pharmaceutical Inc.’s (BMRN) Brineura. It’s the first-ever drug approved for a form of Batten disease, a rare genetic disorder that ravages the nervous system and can cause symptoms ranging from seizures to trouble coordinating muscles to vision loss. It can affect both adults and children; Brineura is approved for kids who are at least three years old.

Click here to subscribe to Brainstorm Health Daily, our brand new newsletter about health innovations.

BioMarin’s regulatory win is good news for patients considering the dearth of available Batten disease treatments. But the $702,000 annual list price—while far more than what patients will actually pay after discounts, rebates, and patient assistance programs—will only add to the controversy swirling around sky high prices for rare disease drugs.

Believe it or not, Brineura isn’t even the most expensive drug out there. That distinction goes to Horizon Pharma’s Ravicti, which rings in at $793,632 per year. (Another contender is Biogen’s recently approved spinal muscular atrophy therapy Spinraza, which costs $750,000 in its first year but then drops to $325,000 per year thereafter.)

Drug makers—especially those focusing on rare diseases—justify high list prices by arguing that it’s extremely difficult to discover groundbreaking treatments that affect just a sliver of the population. This makes the clinical trial process more cumbersome and the limited patient pool means there isn’t a huge market to sell to. Just consider the example of UniQure, whose $1 million-plus gene therapy is now being shelved because it barely had any sales at all in five years.

But although patients don’t have to pay full list prices, insurers and benefits managers do have to pick up a hefty portion of the tab, which can eventually have a downstream effect on consumers. And rare disorder-centered pharma companies can also reap financial benefits through the FDA’s Orphan Drug program. In fact, BioMarin is receiving a coveted pediatric disease priority review voucher along with Brineura’s approval. The firm can either use that to speed up the approval process for a different experimental therapy down the line or sell it for potentially hundreds of millions of dollars to another company.