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Nonprofit Foundation Rakes in Cystic Fibrosis Drug Revenues

Rather than push for costs of medications to be lower for patients, the Cystic Fibrosis Foundation has an incentive to keep costs high.

Rather than push for lower medication costs for patients, the Cystic Fibrosis Foundation has an incentive to keep prices high. (Photo: Money and Pills via Shutterstock)

The Food and Drug Administration (FDA) recently approved a drug aimed at treating an underlying mechanism of the fatal disease cystic fibrosis. At first glance, this would seem to be an optimistic victory for those who suffer from the condition and a validation of an effective system for medical advancement. A deeper look tells a different story.

With a price tag of over $250,000 per year, the drug is understandably controversial, as is the “venture philanthropy” partnership between a nonprofit organization and pharmaceutical company that was responsible for the creation and promotion of the drug. But it is not the biotech firm, Vertex Pharmaceuticals, which faces scrutiny. Drug companies relentlessly pursue ten-figure profit margins, so it was unsurprising news that Vertex planned to pay its executives massive bonuses with revenue from the high-priced drug, or that the new medication was being leveraged to make the company profitable for the first time in its 26-year history. Rather, it is the Cystic Fibrosis Foundation, the nonprofit organization supposedly representing patients with the rare genetic defect, which is being called into question.

Despite the astronomical price tag, benefits of the new drug, Orkambi, are modest at best. The Cystic Fibrosis Foundation has been zealously pushing the medication because of the $3.3 billion windfall it stands to gain from it. It is unclear how this money will be spent by the foundation; it has no obligation to spend it in the interest of the patients, and has indicated that none of it will be used to help patients pay for the drug. Rather than push for costs of medications to be lower, the foundation has an incentive to keep costs high to increase its return on investments. The cost of specialty drugs across the entire pharmaceutical industry is on a spectacular rise.

The president of the Cystic Fibrosis Foundation, Robert Beall, insisted that the organization’s strategy represents the best interest of those who suffer from the disease. According to Beall, “No one’s profiting here; we’re going to make the investment back to the patients,” primarily by continuing to develop new drugs. While he admits that Orkambi is “too expensive” and he is “very concerned” about patients being excluded from treatments because of high costs, he still believes that the recent advances from Vertex “have been among the most significant milestones in the journey toward a permanent cure.”

Receiving annual donations totaling over $130 million, the Cystic Fibrosis Foundation was ranked as the 43rd-largest nonprofit in the United States in 2013 (prior to the foundation’s $3.3 billion payout). It is now the largest disease-focused charity in the nation, ahead of the American Cancer Society, American Heart Association and American Diabetes Foundation. Representing less than .001 percent of the global population, cystic fibrosis (a primarily white European disease) is easily the most heavily funded rare disease in the world.

The Cystic Fibrosis Foundation has a vertically integrated monopoly on every aspect of the disease in the US.

The genetic condition responsible for cystic fibrosis was discovered in 1989. Despite billions of dollars and more than two and a half decades of research conducted on behalf of the Cystic Fibrosis Foundation, only three medications addressing mechanisms unique to the disease have been developed (including Orkambi and a closely related drug from Vertex, Kalydeco). In contrast, other rare genetic diseases have seen tremendous improvements in treatments with a small fraction of the resources. The Cystic Fibrosis Foundation advertises several medications in various stages of research that it is helping deliver to patients; the vast majority of these are simply repackaged and repurposed drugs already widely available (including ibuprofen, salt water and even Viagra). The only drug in development that has shown effectiveness in addressing the underlying genetic defect of the disease was not supported by the Cystic Fibrosis Foundation, but the comparatively tiny UK Cystic Fibrosis Gene Therapy Consortium.

The Cystic Fibrosis Foundation has a vertically integrated monopoly on every aspect of the disease in the United States. It sanctions fundraising events and local awareness-building chapters. It dominates outreach to patients, facilitates generous media exposure and touts successes of large fundraisers. It approves – and even ranks – care centers and physicians across the country in the only network of cystic fibrosis health-care providers. It runs a research subsidiary, which directs the largest array of cystic fibrosis research projects and clinical trials in the world. The resulting standardization and lack of competition has bred a stagnant environment and an entrenched business mindset that silences new perspectives.

As a cystic fibrosis patient myself, I am indebted to researchers and advocates. An extensive routine of treatments has been necessary for my survival. Equally important has been a critical perspective that questions my own lifestyle choices and seeks to understand best practices of medical care. After 30 years of being actively engaged in developments in the field, this healthy skepticism has extended to the larger cystic fibrosis industry, where such a self-reflective attitude seems to be lacking.

One of my earliest memories was of my family crying tears of joy while watching a story on the evening news announcing the discovery of the faulty gene responsible for cystic fibrosis. Since then, a cure has perpetually been advertised as just around the corner. For decades, parents who desperately wished their children to be healthy couldn’t help but to succumb to believing this fiction. All of us – patients, parents and donors – must have the courage to ask hard questions and demand more. Until we do, breakthroughs will continue to be scarce and promises of an imminent cure will remain empty.

The Cystic Fibrosis Foundation is far and away the largest nonprofit organization dedicated to a rare disease and its actions dictate the terms of the entire field. The 30 million people in the United States who are afflicted with rare diseases deserve a more effective model for the improvement of their well-being and the pursuit of a cure.