Nation & World

Drug earning millions despite 'orphan' label

The company that makes buprenorphine holds exclusive rights to market the drug in the United States for two more years, after which competitors can make cheaper generic versions.

The rights stretch until 2009 because of a federal decision to classify buprenorphine as an "orphan drug," a medicine that is expected to have little chance of making money.

Yet the drug has earned millions of dollars in profits for Richmond, Va.-based Reckitt Benckiser Pharmaceuticals Inc., and its parent company.

The product "is doing extremely well," said Bart Becht, chief executive officer of Reckitt Benckiser PLC, a British household cleaning products company, in a July conference call with analysts. The company makes the drug in England and sells it in this country mainly as a tablet called Suboxone.

About 170,000 Americans take buprenorphine pills, which can cost $300 a month or more.

Current sales "are a mark of the company's success in working with health care providers to increase access for opioid dependence treatment to hundreds of thousands of individuals across the country," said spokeswoman Harriet Ullman.

Reckitt Benckiser's pharmaceutical division, whose sole drug product is buprenorphine, reported net revenues of about $180 million for the first six months of this year. That was a 51 percent improvement over the same period in 2006. The company said "exceptional growth" was driven by U.S. sales of Suboxone, though it didn't give a figure. The improved sales resulted in an operating profit of about $100 million, the company said.

Reckitt Benckiser's exclusive rights, which would have expired without buprenorphine's orphan drug status, last until October 2009. Within a year after that, its drug division expects to lose 80 percent of its U.S. sales, according to a company presentation for investors.

In the meantime, "You can charge whatever you want," said Dr. Henry Startzman, a team leader with the U.S. Food and Drug Administration's orphan drug division.

Reckitt Benckiser Vice President Rolley E. Johnson said the drug's price "is consistent with typical costs of other medications for serious chronic conditions." He said the price of the drug has risen in line with inflation since its launch in early 2003.

The FDA, which grants orphan status, can't rescind it in the event that a drug turns out to be highly profitable. "The status really depends upon conditions at the time of designation," Startzman said.

The orphan drug process is supposed to reward companies that produce medicines for treating rare diseases -- usually for 200,000 people or less -- with "no reasonable expectation" of earning a profit. As a financial incentive, the manufacturer gets seven years of exclusive rights -- four more than usual -- before facing competition.

Charles O'Keeffe, a former drug control director in the Carter administration and a past president of Reckitt Benckiser Pharmaceuticals, said the company spent at least $100 million to bring the drug to market for addiction treatment. National Institute on Drug Abuse officials, in a partnership deal with the company, spent at least $26 million.

O'Keeffe said the company "rightly should be attempting to recover its development costs. It's not a philanthropic organization. They spent an awful lot of money," he said.

Reckitt had said the target population was 115,000, which in the 1990s was the total number of addiction "treatment slots" in state and federal programs. Most of those "slots" were for treatment with low-cost methadone, and FDA officials expected buprenorphine to compete with that drug.

Though the FDA concluded that the potential market for buprenorphine actually was 1 million to 1.5 million people, it approved the company's request for orphan status in 1994. FDA officials said it was the first time that status was granted for a medicine intended to treat a condition afflicting more than 200,000 people.

As justification, the FDA cited what agency records call buprenorphine's "limited commercial potential." The FDA does not make public a drug applicant's sales projections. The federal Department of Health and Human Services said in congressional testimony that the company "indicated to FDA that it wishes such information to be kept confidential."

Suboxone's fortunes soared with passage of the Drug Addiction Treatment Act of 2000, which allowed private doctors to prescribe drugs such as buprenorphine to treat addicts. Two years later, the FDA approved the drug for that use, marking the beginning of the seven years of exclusive rights.