Published Online: March 13, 2014
Surabhi Dangi-Garimella, PhD
In early January, the US Food and Drug Administration (FDA) granted an orphan drug status to the immunotherapy drug DV-0100, manufactured by the technology company DiaVacs.1 This cell-based therapy to treat type 1 diabetes mellitus (T1DM), also known as juvenile diabetes, is the company’s first product, based on a proprietary platform technology. The technology, according to the company website, is based on retraining a patient’s dendritic cells (DCs) to prevent a T-cell stimulation-based autoimmune reaction.2
Orphan drug status is granted by the FDA for drugs treating rare diseases (<200,000 patients) and conditions for which adequate treatment options have not been developed. The sole purpose of this class of drugs is to incentivize research in an otherwise unprofitable field for drug developers. A number of large pharmaceutical companies (AbbVie, Bayer, Bristol-Myers Squibb, GlaxoSmithKline) have been investing in this field by focusing on biologics (like immunotherapy drugs), which make up 60% of the orphan drug market.3 Other T1DM drugs granted orphan drug status include teplizumab (MGA031) in 2006, developed by Macrogenics and Eli Lilly and Company, which completed phase 3 trials in 2013, and TOL101 (Tolera Therapeutics Inc), which was granted the status in 2010 and recently concluded a phase 2 trial.4 According to the Orphan Drug Act of 1983, the manufacturer of an orphan drug receives the following benefits to hasten the process of getting the drug to market:
• Tax credits for research expenses • An annual grant to defray the costs of qualified clinical testing • Assistance in clinical research study design • Seven years of exclusive marketing post approval • Waiver of Prescription Drug User Fee Act filing fees ($1 million per application for 2008).3
These benefits amount to significant cost savings to the manufacturing company, but the savings are not necessarily reflected in drug pricing. Although DV-0100 is in very early stages to predict efficacy in long-term clinical trials or to estimate its cost, 5 of the most recently approved orphan drugs, for various indications, were estimated at $150,000 per patient per year, and 3 of them were estimated to cost $300,000 or more annually. With the increasing number of orphan drugs being approved by the FDA (13 of the 39 drugs approved in 2012 were orphan drugs, >350 approved since 1983) that cover a wide spectrum of disease conditions such as AIDS, melanoma, ovarian and pancreatic cancer, and cystic fibrosis, payers are being more cautious.5,6
Payer Perspective The front-end cost of immunotherapy is expensive enough that at least 1 national payer said it’s not a foregone conclusion that this treatment would be covered. Ed Pezalla, national medical director for pharmaceutical policy at Aetna, stated in an interview conducted last year that even with orphan drug expenditures increasing 20 to 25% (of healthcare spending per year) compared with 15% for other medications, managed care companies are not always allowed to drastically increase premiums. Pezalla added that the increase in orphan drug cost is much higher than increases in premiums, which would ultimately raise issues for patients to qualify for coverage.5 A study published late last year evaluated the acceptance of cost-effectiveness analysis (CEA) by payers for orphan disease coverage.6 The study included 7 health insurance companies, estimated to cover 75% of the US private insurance market and approximately 157 million individuals. Based on interviews and a survey, the study concluded that despite being concerned about the cost of orphan drugs, insurance companies have not directed efforts toward generating appropriate cost-assessment tools to regulate orphan drug cost. CEA is not considered useful due to a dearth of medicines for appropriate comparisons. Further, the Affordable Care Act (ACA) clarifies 2 points about orphan drug coverage:
• Medicare does not have any special coverage rules for orphan drugs; drugs are covered irrespective of whether they are reasonable and necessary • Medicare and Medicaid cannot make coverage decisions for any drug solely based on its cost-effectiveness.6
A Look at the Numbers According to the 2011 National Diabetes Fact Sheet released by the Centers for Disease Control and Prevention (CDC), of the 25.8 million (8.3%) Americans who were estimated to have diabetes in 2010, only 18.8 million were diagnosed. Further, 215,000 (0.26%) of this diagnosed population was younger than 20 years, 15,600 of whom were newly diagnosed with T1DM between 2002 and 2005. Based on the statistics provided by JDRF (formerly the Juvenile Diabetes Research Foundation), the estimated total cost (direct and indirect such as loss of productivity and absenteeism) of diabetes in 2012 was $245 billion, with T1DM estimated at $14.9 billion; the average expenditure incurred by a diabetic patient was $11,700 per year in 2009.7 A study published in early 2010 estimated that elimination of the disease by therapeutic intervention (the aim of the current immunotherapy approaches) in the current cohort of T1DM patients could yield projected savings of about $422.9 billion (lifetime cost, which includes disease maintenance with insulin, constant monitoring, and loss of productivity).8 The study estimated the average annual medical expenditure of T1DM patients at about $10,000, compared with $3500 estimated for matched controls. A majority of T1DM patients fall in the 10-to-19-years age group, and they are expected to generate costs (medical and indirect) of about $10 billion.8 Considering these high costs of disease treatment (Table), therapies that can help control or reduce the loss of beta cells could lead to significant cost savings. “We are an early-stage company, and the therapy is still in the early development stage. We have not yet discussed pricing with the payers,” replied Hara Hartounian, PhD, CEO, of DiaVacs, in an e-mail.
The Disease Condition
T1DM, an autoimmune disease that may be regulated by family history, genetic and environmental factors, or viral infections, is associated with a varying preclinical period that results in autoimmune destruction of the insulin-secreting beta cells of the pancreatic islets and a subsequent upsurge in blood glucose levels. The disease remains preclinical until greater than 80% of the beta cell mass is destroyed, before clinical manifestation.7 Typical disease symptoms include extreme fatigue, frequent urination, continued thirst, and severe hunger pangs. Pharmacologic immunosuppression for T1DM using agents such as cyclosporin A, although successful, is associated with unacceptable adverse events (AEs), while administration of insulin is associated with complications that can lead to morbidity and mortality.7
According to JDRF, none of the current therapies can prevent or cure T1DM. Insulin treatment is mandatory for these patients, and the lack of glucose homeostasis could lead to devastating conditions, including heart disease and kidney failure.7 The preclinical period associated with T1DM could present a therapeutic window in which to slow down or inhibit the loss of pancreatic beta cells by targeting the immune system, which can result in an increase in cell mass.
Previous Immune Studies
Several clinical trials have explored immune cells as therapeutic targets or modified tools to treat T1DM patients.9 A collaborative phase 2 trial completed in 2008 by the University of Texas Health Science Center and the National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK) evaluated the efficacy of oral interferon-alpha in slowing the immune attack on the islet cells of T1DM patients.4 The trial reported that patients receiving 5000 units of human recombinant interferon alpha (hrIFN-α) maintained more beta-cell function at 1 year after enrollment compared with the placebo.10 Antigen-based immunotherapy was another approach that was evaluated in both children and adults in a trial that was completed in 2011. Glutamic acid decarboxylase (GAD), a major target of the T1DM autoimmune response, was administered subcutaneously over 4 to 12 weeks, and the loss of insulin secretion was monitored over 1 year. However, the encouraging results obtained in animal models did not translate to humans: the loss of insulin production between the controls and the GAD-injected subjects was not different.11 An ongoing phase I safety trial sponsored by the University of California, San Francisco, is investigating whether regulatory T cells (Tregs) can stabilize the beta cells from further destruction in T1DM.4 The study, initiated in 2010, is estimated to be completed by 2016. DiaVacs’ Vaccine Technology
The technology currently being utilized by DiaVacs is a result of the pioneering work by Nick Giannoukakis, PhD, associate professor of pathology and immunology at the University of Pittsburgh School of Medicine. In an interview published late last year in the journal Immunotherapy, Giannoukakis shared the story behind DV-0100. The extremely exciting findings with DC and T1DM by his research group were funded by venture capitalists, which led to the foundation of the biotechnology company DiaVacs. Giannoukakis, who actively serves on the Scientific Advisory Board of the company, believes that DC therapy can eventually help cure T1DM.12
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