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The Cystic Fibrosis Foundation, a medical charity, is getting into the medical industry with a royalties sale of an expensive drug. (Photo: e-magine art/flickr/cc)

As Health Nonprofit Cashes In, Cystic Fibrosis Drug Remains Unaffordable for Most

Cystic Fibrosis Foundation's $3.3 billion payday may incite other medical charities to partner with Big Pharma, which critics say creates a worrying conflict-of-interest 

Nadia Prupis, staff writer

Years after investing in the small biotechnology company Vertex to encourage the development of drugs to fight cystic fibrosis—a deadly disease that attacks the lungs and digestive system—the Cystic Fibrosis Foundation announced Wednesday that it has sold its royalties for the medication that resulted from that investment for $3.3 billion—the largest windfall ever made by a health nonprofit.

But while foundation CEO Robert J. Beall says the new funds will "supercharge" efforts to develop new treatments for cystic fibrosis, critics note that the life-saving medicine developed by Vertex is virtually unaffordable by most people afflicted with the disease because the drug, Kalydeco, can cost as much or more than $300,000 for a year's treatment.

The higher the price for the drug, critics say, the higher the royalty payments—which netted the Cystic Fibrosis Foundation, a nonprofit, its multi-billion-dollar payout.

"I would like to see [the foundation] do more to get the price of this drug down to something that is going to be sustainable," Paul M. Quinton, a cystic fibrosis patient and researcher at the University of California campuses in Riverside and San Diego, told the New York Times on Wednesday. "And I have some concern about the possible appearance of a conflict."

Beall said the foundation had no power to set the price of the deal. He told the Times that it gives the foundation "an amazing opportunity to accelerate the research we’ve already started."

Even as those research opportunities continue to grow, those who are suffering from cystic fibrosis still find themselves without affordable access to the critical medicine. As three doctors wrote in an editorial for the Journal of the American Medical Association last year, Vertex won FDA approval for Kalydeco in part because the company had access to a clinical trial network operated by the Cystic Fibrosis Foundation.

However, once the experimentation period was over, those who took part found themselves once again without access to the medicine, shut out by an industry that critics say puts the motive of profit ahead of patient health and the affordability of medicines.

"Ironically, the patients who assumed the risk of participating in the clinical trials necessary to bring this drug to market and who devoted countless hours to raising money for the CF Foundation to underwrite early work are now being asked to pay, most often through their insurers, an exorbitant price for the product that resulted from their efforts," the authors wrote.

The doctors called on Vertex to prioritize patient health equally with profit, saying the high price of Kalydeco—which can cost up to $373,000 annually for some patients—is unsustainable and threatens the U.S. health care system.

As the Times points out, the foundation's record-breaking financial return may see other health charities getting involved with drug manufacturers in the future, a tactic known as venture philanthropy.

The Times writes:

One risk for the foundation is that donors will see less need to give money or to organize fund-raising events. The foundation raises about $130 million a year from donations.

Dr. Beall said much more needed to be done in the fight against cystic fibrosis. Kalydeco works only for a small fraction of patients, those with particular genetic mutations. And it must be taken every day. The foundation’s ultimate goal is a one-time treatment that can cure everyone....

Dr. Beall said the foundation would establish an endowment but that it was too soon to say how much its research spending would increase.


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