Inside the battle to approve a Chagas treatment.

A New Strategy to Undermine Big Pharma’s Price Gouging Actually Worked

A New Strategy to Undermine Big Pharma’s Price Gouging Actually Worked

Health and medicine explained.
Sept. 7 2017 12:14 PM

A New Strategy to Undermine Big Pharma’s Price Gouging Actually Worked

A little-known disease called Chagas is much more prevalent than Zika. Here’s how advocates fought an uphill battle, and won.

170907_MEDEX_Chagas
Chagas is mainly found in Latin America, where the so-called kissing bugs are prevalent.

Dr. Erwin Huebner/Wikimedia Commons

Last week, the Food and Drug Administration announced its approval of the drug benznidazole, which is used to treat a parasitic disease that afflicts about 300,000 Americans and that, left untreated, can lead to heart failure. It sounds like a routine case of government agencies doing routine work—a relief during the Trump administration. For once, there’s good news.

But it is not as simple as it looks. This is actually a story of how advocates and physicians squared off against Big Pharma’s price gouging and federal policy loopholes—and won. Everyone who has to shell out hundreds of dollars right now for an EpiPen should be asking: How did they do it?

Advertisement

Benznidazole is used to treat Chagas, or the “kissing bug” disease, as it’s been nicknamed, since the insect that passes along the vicious parasite often bites near the face. Similar to the Zika virus, Chagas is mainly found in Latin America, where the so-called kissing bugs are prevalent. It is also transmitted here in the South with less frequency, though recently epidemiologists at Baylor College of Medicine in Houston have been finding that in some areas of Texas about half of the local kissing bugs are infected with the Chagas-causing parasite Trypanosoma cruzi. The disease can also be passed from mother to child during pregnancy, and often, even those who are infected don’t know they have it. A mother I’ll call Julia, to protect her privacy, was shocked when her premature baby, who weighed less than four pounds, was diagnosed with Chagas disease. She was more shocked to learn that she too was infected. “I didn’t know I could give it to my baby,” Julia told me.

Unlike Zika, Chagas already afflicts hundreds of thousands of Americans. Decades after being infected, which often goes unrecognized, 1 in 3 people will develop signs of heart failure. They will have irregular heartbeats, and the walls of their hearts will thin. They will need defibrillators, even heart transplants. Some Chagas patients die suddenly when their hearts can’t pump anymore. In the Western Hemisphere, the cost that the disease exacts in lives and disability makes the burden of Chagas eight times higher than that of malaria. And also unlike Zika, which currently has no easy remedy, babies and young children diagnosed with the kissing bug disease can be cured with a 60-day treatment of benznidazole.  (The drug disrupts the parasite’s capacity to reproduce in the child’s bloodstream and affected tissue.)

Benznidazole has been around since the late 1970s, but it lacked FDA approval. The Centers for Disease Control and Prevention had been dispensing the drug to doctors for compassionate treatment, but Harvard researchers found that between 2007 and 2013, the agency only released 422 doses of both benznidazole and a second drug (that patients often don’t tolerate as well).

The only way to spur FDA approval for benznidazole, however, was for a pharmaceutical company to apply to register the drug. Chagas, like many neglected tropical diseases, disproportionately afflicts poor people so companies didn’t have a reason to bring a life-saving medication to the FDA for approval—it wouldn’t have paid off for them.

Advertisement

At least, it didn’t until 2015 when notorious pharma bro Martin Shkreli realized that the kissing bug disease had been added to a coveted list of neglected and rare conditions. The federal government uses the list to incentivize pharmaceutical companies. In exchange for bringing a neglected and rare disease remedy to the market, a company gets a “priority review voucher” that allows it to fast-track another drug application or to sell that voucher to other companies. The value of the voucher? Anywhere between $125 million and $350 million. (Critics of the program have argued that companies are able to make a huge profit without having to invest in new research or make promises about drug affordability.)

With its inclusion on that federal list in 2015, Chagas became a cash cow in the pharma world, and Shkreli took notice. Not only did he want the voucher, but he boasted to investors that he’d price benznidazole at close to $100,000 a course treatment. In Latin America, the drug can be purchased for between $60 and $100.

What Shkreli didn’t count on were the people—physicians and advocates—who would be outraged over his tactics.

One such physician was Los Angeles cardiologist Sheba Meymandi, who runs the only clinic for Chagas patients in the United States at the Olive View–UCLA Medical Center. For a decade now, Meymandi and her volunteers have shown up at health fairs around L.A. County, screening people and finding that about 30,000 women and men in the county are infected with Chagas disease. Meymandi sounded the alarms over Shkreli’s tactics in 2015 to the New York Times, explaining that pricing the drug as Shkreli intended would have been devastating for the patients that needed it.

Advertisement

Just as shocked over Shkreli’s intentions was the staff at Drugs for Neglected Diseases initiative. A nonprofit started in 2003 by physicians from Doctors Without Borders and its partners, DNDI has teamed up with pharmaceutical companies to bring seven drugs to the market for neglected diseases at low prices. In Latin America, the organization had worked with a Brazilian laboratory to manufacture a formulation of benznidazole for children infected with the kissing bug disease.

As soon as DNDI staffers heard about Shkreli’s plans, they went into action to try to prevent the price gouging from happening. The pharmaceutical company Chemo Group had been trying to register the drug with the FDA before the disease was even tied to the voucher. (The company’s Argentinian owners also run the Mundo Sano Foundation that was started in the 1990s to combat Chagas disease.) DNDI signed an agreement with Mundo Sano. The nonprofit would provide research data while the foundation committed to putting half of any voucher profits toward programs that diagnose and treat people with Chagas. It would also produce benznidazole on a “no profit no loss” basis—meaning it would charge at or below cost to produce the drug, but no more. It was a unique agreement that accomplished many things—bringing the drug to market, capping the price, and increasing screening.

The plan fills in some gaps that the scholars who created the priority review voucher program 10 years ago have said they now want to incorporate in the voucher system, including requirements on how patients obtain the medications. “We agree that there should be an access requirement and that may just be a plan that the sponsor provides to the FDA,” said Jeffrey L. Moe, a professor with Duke University’s Global Health Institute, and one of the creators of the voucher program.

The FDA’s approval of benznidazole is for use in children, but doctors will also be able to prescribe it off-label for adults. For physicians and researchers, the worry is still about screening patients and educating American doctors who know about the Zika virus but not the more prevalent Chagas disease. “People are not just going to start screening and treating because benznidazole is approved,” said Jennifer Manne-Goehler, a clinical fellow at Harvard Medical School. The next hurdle, she said, will be how easily doctors can access the drug through local pharmacies and also how health care workers reach patients who might not even know they are infected.

And the war against price gouging and federal loopholes is also not over, of course. Shkreli was only the poster boy for a pharmaceutical industry gone astray. He was never the actual problem. Price hikes continue to devastate families and their doctors. The voucher system remains open for use by companies that have no obligation to commit to affordability or investment in screening, treatment, or research. Just as troubling, this summer, the Centers for Medicare and Medicaid Services proposed scaling back reimbursements for medications to hospitals that treat low-income patients.

But if the benznidazole story offers any lessons, it’s that partnerships between nonprofits and pharmaceutical companies might be a legitimate and necessary strategy for keeping drugs affordable in the United States. This requires a lot more collaboration, among patients, doctors, and public health advocates. But until lawmakers get their act together, these private-public partnerships might be one way forward.

One more thing

You depend on Slate for sharp, distinctive coverage of the latest developments in politics and culture. Now we need to ask for your support.

Our work is more urgent than ever and is reaching more readers—but online advertising revenues don’t fully cover our costs, and we don’t have print subscribers to help keep us afloat. So we need your help.

If you think Slate’s work matters, become a Slate Plus member. You’ll get exclusive members-only content and a suite of great benefits—and you’ll help secure Slate’s future.

Join Slate Plus