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Ralph Nader > In the Public Interest > Prescription Drug Prices Orphan Drug Law

The desperate letters from people on prescription drugs keep coming — to members of Congress to consumer groups to anyone who may listen. The message is the same — “do something about the skyrocketing price of drugs.”

A woman writes that a drug named Depakene, which is a anti-convulsant she continually needs to survive, cost $19 per 100 tablets ten years ago. Now it costs $80 per 100 tablets which last her just 25 days.

A drug for Parkinson’s disease called Eldepryl costs $25 in Italy and $420 in the U.S. The prices of drugs in Canada and Western Europe, manufactured by the same companies, are far lower than drug prices in the U.S. where pharmaceutical manufacturers boast about their productive efficiency.

The Inspector General for the Department of Health: and Human Services reports that U.S. prices for pharmaceutical drugs are 62 percent higher than for the exact same products Canada. Why the difference? Because national health insurance programs in Canada as well as other western countries control costs. They permit drug companies to make a reasonable profit, not an exorbitant one.

The notorious abuse of the Orphan Drug in the U.S. is a case in point. Passed in 1903 to let drug companies have tax credits and a seven gear monopoly for drugs that have a small potential population of patients (those with rare diseases), this law has led to staggering prices and profits.

Ceredase, a drug for Gaucher’s disease, costs a patient $35,000 a year. AZT to treat Aids patients started out costing $10,000 per year per patient. Public opinion pressure drove the price down to about half that amount presently. The seller of AZT, a British company, Burroughs-Welcome.. Inc., received this monopoly from the Reagan government notwithstanding the fact that the drug was clinically developed by taxpayer funds at the National Institutes of Health.

Senator Howard Metzenbaum declared: “Through their high prices these companies have turned a drug for a relatively small population into a drug with tremendous commercial value, and then they have used their seven-year marketing exclusive rights to block competitors.”

It gets worse. The Food and Drug Administration defines an orphan drug as one affecting fewer than 200,000 patients. The drug companies responded with some “salami slicing” maneuvers. For example; if a company develops a treatment for asthma, which afflicts nearly 10 million people in the U.S.: they designate the drug for treatment of “severe, steroid-dependent asthma” which affects fewer than 200,000 patients. In this way, the company gets orphan drug status for a drug that may actually treat up to 10 million people.

The story of stories you will be hearing more about shortly relates to the anti-cancer drug called Taxol which is derived from the Yew tree which mostly grows on government owned land in the Northwest.

A vice-president for Bristol-Myers said that “Taxol will probably cost more than any oncology product that’s ever been developed.” He should know. Bristol‑ Myers is preparing to sell the drug.

But you the taxpayer paid the U.S. government, its scientists and its grantees to discover, develop and test the drug — millions of dollars worth. Your Bush government gave monopoly orphan drug status to Taxol to Bristol-Myers, guaranteed the company exclusive rights to past and future government clinical tests and other data and let the company charge whatever it wants to the patient. Plus, you the taxpayer receive no royalties from the sales.

Republican Senator Nancy Kassebaum (KS) and Democratic Senator Howard Metzenbaum (OH) are sponsoring legislation that would limit orphan drug status to drugs that earn less than $200 million. Senator David Pryor (D-AR) is advancing a bill to end tax breaks to drug companies that raise prices faster than inflation.

Your high-priced drug complaints should be sent to Senator Pryor’s office at the U.S. Senate, Washington, D.C. It is his Subcommittee that is trying to do something here. He needs your letters and copies of your bills to build the pressure