The well-known investment firm Royalty Pharma has just announced its intention of buying royalties on Vertex Pharmaceuticals Inc.’s cystic fibrosis drug, Kalydeco.
Kalydeco received its Food and Drug Administration approval in January 2012 after being co-developed with the help of the Cystic Fibrosis Foundation. This deal is planned to fund further therapies for the disease, Royal Pharma announced on Wednesday.
When the Cystic Fibrosis Foundation began funding the small biotechnology company, it never expected that its $150 million investment would yield $3.3 billion from selling the rights to the royalties to the cystic fibrosis drug. In fact, this payout might actually be the largest financial return that a charitable organization ever achieved while pursuing treatments for this disease.
Such payouts are believed to also encourage patient advocacy groups the nation over to begin entering deals of their own with pharma companies. Such deals could not only speed up drug development but also provide the potential financial reward which could in turn fund more research.
There is only one concern that might cause nonprofit organizations to consider their options more carefully: these organizations might become accused of drifting away from their initial mission, that of helping patients. They could end up in a conflict of interest firestorm where people might accuse them of having not fought hard enough to lower the price of certain drugs.
This was the case of the Cystic Fibrosis Foundation’s recent investment ($300,000 a year).
“I would like to see them do more to get the price of this drug down to something that is going to be sustainable. And I have some concern about the possible appearance of a conflict.”
Paul M. Quinton, cystic fibrosis researcher said.
On the other hand, chief executive of the Cystic Fibrosis Foundation, Robert J. Beall, announced that the organization had repeatedly expressed concern as to the overall cost of the drug.
“This is a transformational day for people with cystic fibrosis and their families. It gives us an amazing opportunity to accelerate the research we’ve already started.”
Beall said, noting that the organization had no power in setting the price. Beall reminded the public that the foundation’s goal had been that of getting treatments to patients and that he was hopeful that financial returns would help their endeavor.
“If we wanted to get therapies to patients faster, we needed to be partnering with the industry that actually brings those drugs to patients,”
Louis J. DeGennaro, chief executive of the Leukemia & Lymphoma Society said.
