© Photographer: Adam Glanzman/Bloomberg Chemicals sit inside a refrigerator at a lab in Cambridge, Massachusetts.

(Bloomberg) -- Wearing a revolutionary-era tricorn hat, doctor Mathew Maurer stood at a lectern in front of an audience of fellow cardiologists in Philadelphia, decrying the price of a new medication that had the potential to help many of his heart-failure patients.

The drug, Pfizer Inc.’s tafamidis, cost $651 a day, Maurer told them—equal to a patient’s food budget for a month. Drugs don’t work if people can’t afford to take them, he said, and the pharmaceutical company’s $225,000-a-year price was well out of bounds.

Maurer isn’t just any critic. A professor at Columbia University Irving Medical Center, he worked closely with Pfizer to develop the breakthrough drug. He was the lead author on a pivotal, company-funded scientific study that got tafamidis approved earlier this year.

Bloomberg spoke to Maurer and three other doctors involved in tafamidis’s company-funded clinical trials who have since become critics of the drug’s price after seeing patients’ early financial struggles since it was approved in May. They argue tafamidis may be given to far more people than anticipated, will be taken by patients for years or decades, and is being sold at a cost comparable to curative treatments or to medicines for rarer diseases.

Pfizer called the price of the drug appropriate, and said it set the cost based on what it anticipates will be a small number of patients getting it. If it ends up being more widely used, the drugmaker said it may cut the price.

While criticism of drugmakers by patients and politicians is common, it’s far rarer for academics who helped lead development of a therapy to turn into antagonists of the same company that funded the research. Pfizer’s final-stage testing of the drug was spread over about 50 sites, and in the small community of physicians who care for patients with the heart disease tafamidis treats, the company’s decision has prompted a new round of questions about what it’s proper to charge for an innovative medicine.

“We can agree to disagree,” Maurer said at the September gathering of the Heart Failure Society of America, “but I had told them I thought $25,000 a year might have been a reasonable cost.” By the end of his talk, Maurer joked that he might no longer be involved in an ongoing tafamidis trial, and might even need a new way to fill his days.

“You can get out your pens, you can write down my name, and this is my contact information, because I may be looking for a job,” he said. In a follow-up interview, he said he hasn’t received any blowback from Pfizer. He’s still involved in an ongoing trial of the drug.

Breakthrough Drug

Tafamidis—also called Vyndaqel or Vyndamax—is the first-ever medication approved by the U.S. Food and Drug Administration for the cardiac form of a condition called transthyretin amyloidosis. Caused by protein buildup in the body, the disorder can lead to trouble breathing, fatigue and fluid accumulation, and heart problems that can lead to death. Tafamadis slows the disease, helping patients live longer and keeping them out of expensive hospital stays.

Since the condition is often found in older men, many patients are insured through the government health program Medicare, which can expose them to high out-of-pocket costs—with taxpayers footing much of the rest of the bill. Pfizer has assistance programs that help with co-pays for commercial insurance and provide free drugs to uninsured or under-insured individuals, including those on Medicare, but not all patients meet the criteria.

“We’ve had patients say I can’t afford it, or I don’t want to sacrifice my granddaughter’s education,” said Mayo Clinic cardiologist Martha Grogan. Like Maurer, Grogan has been involved with clinical trials and consulting for Pfizer and other companies working to treat the condition. The corporate funds go to Mayo and don’t personally compensate her, she said.

“We know of one patient who moved out of their home, moved in with their adult children,” after selling their home to afford their medical expenses, she said.

Company Critics

Pills like tafamidis are often relatively inexpensive to manufacture, but can take hundreds of millions of dollars in development costs to test and bring to market. For other high-priced drugs, manufacturers have argued that they need to recoup their investment, providing incentives to develop more new therapies.

The controversy illustrates challenges that lie ahead for the U.S. health-care system. Using new discoveries in biology and genetics, drugmakers have targeted diseases using narrowly-tailored therapies, often designated as so-called rare disease drugs, that can attack previously untreated ailments in small groups of patients. Government incentives offer offering special status like tax credits and extended marketing exclusivity. That’s meant breakthroughs for patients across a host of illnesses.

But as the size of the populations drugmakers are targeting has shrunk, the price tags have gone up. Rare-disease drugs with $100,000-plus list prices are now common, and tafamidis is among them.

“We’ve now made a very common disease into, potentially, at least one but probably 20 rare diseases,” Maurer said in an interview at his Manhattan office this month. “The way that this country currently operates in rare diseases, we can’t afford this process. We can’t afford to solve it for everybody.”

Pfizer decided the $225,000-a-year price tag based on tafamidis’s benefit to patients as well as the disease’s prevalence, said Nolan Townsend, regional president of the company’s North America Rare Disease unit, in a phone interview. The company estimates that 100,000 to 150,000 individuals in the U.S. have cardiac transthyretin amyloidosis, meeting the criteria for a rare disease, and that today just 4% or 5% of patients know they have it, Pfizer’s Townsend said.

Despite Pfizer’s estimate of a small market, the New York City-based drugmaker has said tafamidis could be a blockbuster. It brought in about $160 million in revenue in the third quarter, toppling Wall Street’s expectations.

Cardiac transthyretin amyloidosis is often mistaken for other conditions like common heart failure, and the disease’s prevalence has become a point of contention. Until recently, diagnosis was also extremely invasive—requiring a heart biopsy performed with a catheter—and doctors had little incentive to identify patients because of the lack of treatment options.

“We could be talking about numbers in seven figures, rather than six, in terms of the number of people who could actually have the disease in this country,” said Ronald Witteles, a doctor who leads the Stanford Amyloid Center in California. Like Maurer and Grogan, Witteles has been funded by and worked closely with drugmakers, including as an investigator on tafamidis’s clinical trials and an advisory board member for Pfizer.

“It is by no means a rare disease,” said Witteles, and because of that, “the rationale for pricing in the range that this has been priced disappears.”

How Rare?

In an interview with Bloomberg, Pfizer’s Townsend acknowledged that there is some uncertainty about how many people have cardiac transthyretin amyloidosis, but called the condition both rare and under-diagnosed. Pfizer is running two studies to better understand it, he said.

“But if this turns out not to be a rare disease, we would obviously revisit the price for the medicine accordingly,” Townsend said.

Pfizer declined to comment on when it might make such a decision. In a follow-up email, the company said the drug is cost-effective, based on the benefit to patients and reductions in hospitalizations that can add up to more than $34,000 a year, according to one industry-funded study of Medicare patients.

“Any time you bring a treatment into an area where there was not one previously, you’re going to have to establish a new cost benchmark for treatment of that disease,” Townsend said.

Medicare’s drug benefit covers much of the cost of pills like tafamidis, but can leave patients on the hook for large out-of-pocket costs below or above certain thresholds.

John Rufenacht, a 73-year-old interior designer in Kansas City, Missouri, picked up his first tafamidis prescription in August. Through Medicare, Rufenacht’s portion was almost $6,000 for a 90-day supply. Pfizer's assistance program directs patients to charity programs to help them pay for drugs, but Rufenacht said he doesn’t qualify for most. He worries about what the next payments will be, knowing that there’s a threshold at which the costs will become a serious burden.

“Beyond that, I just can’t swing that and have any sort of quality of simple life left,” Rufenacht said.

For him and his husband, this could mean sacrificing travel, visiting art museums and trips to concerts and the opera, “a lot of amenities that I thought I was going to be able to do when I retired,” he said. “Suddenly you start looking at everything from the standpoint of: What is this drug going to cost me, and I need it for the rest of my life?”

The drug industry has called on lawmakers in Washington to limit what patients pay for drugs in Medicare. Such a policy would cost taxpayers billions of dollars over the course of a decade, according to an analysis funded by health insurers. There are proposals for drugmakers to pay some of that cost.

Pfizer set up assistance programs for tafamidis patients anticipating many could be insured through Medicare, Townsend said. The company can't provide copay assistance to Medicare patients the way it does to commercially insured individuals because of legal restrictions, he said.

Maurer and collaborators released a cost-effectiveness analysis last week at the American Heart Association’s Scientific Sessions meeting, concluding that tafamidis is only cost-effective with a more than 90% price reduction, or a price tag of $16,563.

At current prices, treating an estimated 120,000 individuals in the U.S. with tafamidis would “increase annual health-care spending by $32.3 billion,” the authors wrote.

Pfizer contested the findings, saying that the analysis isn’t appropriate for rare-disease drugs or medicines that treat elderly populations, which have less time to benefit.

To contact the author of this story: Emma Court in New York at ecourt1@bloomberg.net

To contact the editor responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net, Timothy Annett

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