Last month, Zolgensma, a drug developed to treat a rare genetic disease that afflicts about four hundred infants a year, was approved by the Food and Drug Administration. It is now the most expensive drug on the planet. A single dose of Zolgensma costs $2.1 million. It is a one-time treatment for spinal muscular atrophy, which can kill infants before they reach their second birthday. The Swiss drug company Novartis had publicly considered pricing the drug as high as $5 million. Coming onto the market at less than half that price does nothing, of course, to hide an essential function of the pharmaceutical business: calculating the price of a human life based on “free market” principles such as supply and demand and return on investment.
Zolgensma’s emergence once again demonstrates how arbitrary and irrational the American medical industry is. As the Boston Globe recently noted, “The US government, unlike those of most other developed countries, sets no ceiling on what pharmaceutical companies can charge. The only limit is what the market will bear.” Pharmas are making sizeable profits on drugs (as even industry apologists admit) but more than half a million U.S. families declare bankruptcy each year because of medical debt. Drug companies say high prices are necessary for treatments of rare diseases because there are so few “customers.” Yet diabetes is no rare disease and approximately 30 percent of diabetic patients in the United States are rationing insulin because they can’t afford it. There are market failures all the way down. But to understand one of the worst of them—illustrated by the $2.1 million dose of Zolgensma—we’re going to have to start in a seemingly unlikely place: with Jack Klugman, the star of an award-winning TV drama that aired from 1976 to 1983, Quincy, M.E.
By the 1970s—when Klugman was playing Oscar Madison in The Odd Couple (first on Broadway, then on ABC)—it had become clear that the century’s medical and scientific advancements had left behind a segment of the population: those who suffered from diseases that affected only a small number of patients each year. By the 1980s, taken together, these patients numbered somewhere between 20 and 25 million. The thousands of identified rare diseases included Tourette’s syndrome, Huntington’s disease, Gaucher disease, and other immunodeficiency disorders. Yet pharmaceutical companies were uninterested in developing drugs to treat them because the fewer the number of patients diagnosed with each, the smaller the profits. Often, effective drugs existed in other countries or potential pharmaceutical treatments were indicated by existing research, but U.S. pharma companies declined to take on the testing and approval process required to bring a new drugs to market. The drugs not picked up for development became known as “orphan drugs.”
More than half a million U.S. families declare bankruptcy each year because of medical debt.
The Odd Couple was canceled in 1975, after a five-year run. The next year, Klugman returned to TV, playing Dr. Quincy (or just Quincy; he had no first name), a medical examiner with the Los Angeles Coroner’s Office. Quincy was a no-nonsense everyman of action. He solved murders and represented an ethical authority to viewers, someone willing to do what was right no matter the cost.
In real life, Klugman faced an actual medical mystery: why were some diseases considered untreatable? Jack’s brother, Maurice, was a Hollywood screenwriter and an associate producer on Quincy who suffered from a rare form of cancer. The brothers became invested in getting a bill through Congress, called the Orphan Drug Act, that would encourage pharmaceutical companies to take up research on rare diseases. The bill had hit a stalemate, with the pharma lobby and Republicans hung up on the seemingly impossible costs of drug development which, they thought, prohibited the industry (despite its enormous annual net profits) from marketing orphan drugs. Government regulation, in the form of the Food and Drug Administration, was seen as the culprit: their regulations were too expensive, their safeguards were depriving sick children of necessary medication, they were tying the pharmaceutical industry’s benevolent hands.
In 1981, Quincy, M.E. ran an episode on Tourette’s syndrome that was straight-up advocacy for the bill. “I’d still like to know how the drug companies are gonna break even on a drug with only a hundred thousand customers,” a senator tells Quincy, framing the real-life drama playing out in Congress. Henry Waxman, a California Democrat, was likely the model for the skeptical pol; he was an early supporter of the bill, despite his concerns for industry profit. He invited Jack Klugman to testify before Congress. “I’m not trying to legislate morality, just encourage it,” Klugman said, clearly suggesting that moral and ethical standards were antithetical to industry practice. Still the Orphan Drug Act was a no-go, mainly because the Republican senator and chair of the Senate Labor and Human Resources Committee, Orrin Hatch, opposed government spending and regulation of the industry. The next year, Quincy aired a second episode, “Give Me Your Weak,” that continued the Klugmans’ campaign, this time focusing on a recalcitrant senator who was preventing the bill’s passage, clearly a stand-in for Hatch.
In 1983, the Waxman-Hatch Orphan Drug Act was signed into law by President Ronald Reagan. It offered the pharmaceutical industry rich concessions, including a seven-year monopoly on any new drug, and a 50 percent tax credit on the costs of trials. One of the first successes of the new law was the development of AZT, a treatment for HIV-AIDS.
Yet, after more than three decades and thousands of lives saved, the Orphan Drug Act has nonetheless become an example of an industry’s conflation of profit and ethics. According to a 2018 article at The New England Journal of Medicine, the average annual cost for the top one hundred orphan drugs the prior year was $147,308, an astronomical sum, out of reach for average families without insurance (the number of uninsured children has risen under President Trump) or with plans that do not cover the treatments. To desperate families, it can feel like the industry is holding their children for ransom. In 2018, a majority of novel drugs approved by the FDA were for rare diseases and by 2020 drugs with at least one orphan designation will make up one third of U.S. drug expenditures.
This is because the industry has become adept at gaming the bill’s benefits. By dividing a disease population into as many subcategories as possible, the industry takes advantage of the orphan drug bill’s application to diseases with two-hundred thousand patients or less. It’s called “salami slicing” and it’s a perversion of the original bill’s intention.
Which is why many have been clamoring for the Orphan Drug Act to be revised—but, of course, that assumes a functioning Congress. The Zolgensma episode puts new focus on the need for reform. “The prices of new orphan drugs are rising so high,” Peter Bach wrote at Bloomberg last month, “that, taken together, they threaten the financing of all other types of health care.” Should drug companies be the sole arbiter of drug prices? Zolgensma could be a signal, wrote Bach, that “the day, long anticipated, when America’s system of voluntary drug pricing could break down has now arrived.”
Novartis is marketing Zolgensma as a real bargain. It costs at least 50 percent less than the only other available drug for SMA, Spinraza, which costs $750,000 for the first year and $375,000 for each year after—and must be injected into the spines of SMA patients for their entire lives. Novartis has so very kindly offered to set up five-year payment plans for states, small insurance companies, and employers who are self-insured.
To desperate families, it can feel like the industry is holding their children for ransom.
“We believe by taking this responsible approach,” Vasant Narasimhan, Novartis’s chief executive, said last month, “we will help patients benefit from this transformative medical innovation and generate significant cost savings for the system over time.” It’s perhaps relevant to note that to a man who earns $9.9 million a year, the drug’s $2.1 million price tag might not seem especially unaffordable.
But here’s the kicker. SMA afflicts only approximately thirty new patients a month. They’re thirty important patients, to be sure, but so are the over six thousand people who die of diabetes in the U.S. each month. By allowing the pharmaceutical industry to so greatly benefit from one category of drug manufacturing and development—by allowing the industry to follow their profits rather than the ethics of public health—the government is complicit in millions of deaths, missed early detections, disabled lives, and bankrupt families. Why? It’s the same old story: this is how the free market works. Corporate profit makes the world go ’round.
Maurice Klugman died in Santa Monica in 1981 at the age of sixty-six, before the second orphan drug episode aired. Quincy, M.E. ended two years later after an eight-year, award-winning run. Jack Klugman was diagnosed with throat cancer in 1974 and died in 2012, by which time the law he had advocated had done a lot of good, while the health care system itself was as distorted by corporate incentives as ever. The Orphan Drug Act, called the Klugmans’ legacy by some, brought attention to millions in need of life-saving drugs. But it also changed the pharmaceutical industry, and not for the better.