WASHINGTON _ Celgene Corp. received FDAapproval to begin a cost-recovery program that willenable the company to recover some of the research anddevelopment costs associated with the clinical testing ofSynovir (thalidomide) used to treat wasting in AIDSpatients.
Cost recovery also permits patients enrolled in the trialsto seek reimbursement from their insurers.
"Launching of the expanded access program for Synovirin late August (See BioWorld Today, Aug. 30, 1995,p.1.), and FDA approval of the cost recovery are the mostsignificant events in the history of Celgene," said Celgenepresident and CEO Saul Barer.
He termed the FDA's most recent action as "validation ofthe potential approvability of the drug."
Cost recovery is vital to patients who seek reimbursementfrom their insurers. Barer explained that many insurancecompanies have riders in their coverage language thatpermit coverage of drugs administered under a treatmentinvestigational new drug application or cost-recoveryprogram.
Celgene, of Warren, N.J., will charge $550 for a 12-weekcourse of treatment, significantly less than the $11,000charged by Serono Laboratories for Serostim, amammalian cell-derived recombinant human growthhormone also used to treat wasting in AIDS patients.Serono, of Norwell, Mass., which also has an approvedcost-recovery program from the FDA, recently reportedthat all participants in the Phase III Serostim clinical trialshave been able to obtain reimbursement from Medicaidor private insurers. MediCal, California's Medicaidprogram, recently extended coverage to include Serostim.According to the company, 10 state Medicaid programsand more than 50 private health insurers currently coverthe drug.
According to Ellen Frank, executive vice president ofSerono, the company plans to work with other insurers tohelp secure reimbursement for Serostim.
Synovir is now in Phase II studies that are being modifiedinto a pivotal trial, Barer told BioWorld Today. Celgeneexpects to submit its new drug application in 1996.
Celgene is one of the few drug companies that has anapproved cost-recovery program. While the FDA has nooverall statistics on approved cost-recovery programs,only a handful have been granted by the Division of Anti-Viral Drug Products, said Debra Birnkrant, a medicalofficer in the division.
"There are special circumstances under which we wouldapprove a cost-recovery program," Birnkrant said. "Theseinclude the ability of a drug to treat a serious and life-threatening illness and the drug company's capability tooffer the drug in a controlled clinical setting."
The FDA took the unusual step of approaching Celgeneto accept a cost-recovery program. "We asked Celgene tooffer an open-label safety study that would allow thepatients to receive the drug in a controlled trial and thatwould provide the company with safety and efficacyinformation," Birnkrant told BioWorld Today.
"We recognized that it had not been in Celgene's plan todevelop a large expensive second study. But becausedemand for the drug was so great, we initiated the cost-recovery program," Birnkrant explained.
Under the FDA's cost-recovery guidelines, the companycannot generate a profit on the drug but only seekreimbursement for costs associated with the clinical trial.
Many drug companies are not aware of the FDA's cost-recovery program, Birnkrant said. The FDA approves acost-recovery program if the "company has an ongoingclinical trail and is committed to the development of thedrug," she said. n
-- Michele L. Robinson Washington Editor
(c) 1997 American Health Consultants. All rights reserved.