At around 5 pm last Thursday, I walked into the Metropolitan Hotel and Spa—an upscale establishment in central Delhi that, on its website, claims to offer its clients a chance to “enjoy luxury with a conscience.” I was there to speak to Dr Carlo Incerti, the senior vice president and head of global medical affairs at Genzyme, a subsidiary of the French pharmaceutical giant Sanofi. Genzyme, an American biotechnology firm, was set up in 1981, and specialises in developing and producing drugs for ultra-rare diseases. Over the course of the interview, I discovered that the company subscribes to the same marketing philosophy that the hotel we were at seemed to espouse: running an elitist business behind a veil of conscientiousness.
Genzyme Corporation is primarily known for pioneering the world's first therapy for Gaucher disease—a rare, and sometimes fatal, condition that causes certain organs to swell and bones to deteriorate. It is estimated that the disease affects less than 10,000 people worldwide. The company was co-founded by an enzymologist named Henry Blair who was collaborating with the National Institute of Health (NIH)—an agency under the department of health and research in the United States of America—to develop a treatment for Gaucher disease through modified enzymes. In 1981, when Blair moved to Genzyme, he took the government contract to produce the enzyme that could cure Gaucher disease with him to the new company. In 1991, Genzyme introduced its solution to the Gaucher disease, a protein-based enzyme replacement therapy called Cerezyme, that was sold in the market for an average price of $200,000 per patient, per year.
A year later, the high price of Cerezyme attracted scrutiny and resulted in an investigation by the Office of Technology Assessment (OTA)—an office of the United States Congress from 1972 to 1995 that provided Congressional candidates with an analysis of scientific and technical issues. According to this investigation, at least a fifth of the cost that was borne to research a cure for the Gaucher disease was paid for by the NIH, under a government contract. In 2005, a report in the Wall Street Journal quoted the findings of this investigation and noted that "The report estimated Genzyme spent $29.4 million to develop the drug. It said much of the initial research was done by scientists at the NIH and paid for by the government.” Furthermore, the Wall Street Journal report stated, “In 1994, Genzyme figured out a cheaper and safer way of producing the drug.” Over two decades have passed since the drug was first produced, but its price remains unchanged. Last year, Genzyme got approval from the US Food and Drug Administration (FDA) to produce and market a new pill to combat the Gaucher disease: Cerdelga. This capsule will reportedly cost a patient $310,250 for a year. Currently, Genzyme’s list of treatments covers seven rare conditions that include the Gaucher disease; Fabry disease, a hereditary disorder caused by a faulty gene in the body; and Multiple Sclerosis, a chronic disease that affects the central nervous system; among others.
It was with these facts in mind that I went to interview Incerti. I had read through the reports by the OTA and keenly followed the controversies around the pricing of Genzyme’s drugs. I had hoped that this meeting would help me understand the intricacies of the market that Genzyme functions within and that Incerti would shed some light on the company’s justification for the prices it charged. I was ill-prepared for the combative conversation that followed. As I entered the hotel’s conference room, a journalist from a leading daily newspaper was finishing her session, affording me a glimpse of the performance that would repeat itself during my interaction as well: a sermon from Genzyme’s representatives on the company’s “humanitarian efforts.”
The meeting’s primary objective, I realised then, was to draw attention to “Stand up for Rare,” Genzyme’s recently launched campaign to increase awareness about rare diseases. The message had not just been prepared and rehearsed, it had been carefully orchestrated. Anil Raina, who according to his LinkedIn profile—which appears to have been deleted after this story was published—is director (new product planning) at Genzyme; the company’s corporate communications head, Archana Thomas; and Ambereen Shah, senior account director, healthcare, at the public relations company Edelman India, were all seated around the conference table, presumably to ensure that the meeting was conducted as planned. As my interview with Incerti began, it became clear that they were also there to ascertain that my questions did not derail the conversation’s intended purpose.
The interview began with Incerti telling me about the first Indian patient Genzyme had treated in 1999—a boy who, Shah intervened to tell me, still comes to their office from time to time, to express his gratitude towards the company and the work that it was doing. “He was a very sick boy. We are almost sure he would have died in the next few months,” Incerti said before adding that it was “great to tell happy endings.” Describing the patient, Incerti told me that he was now in his twenties and an engineering student. He said with discernable pride, “It is really important to give these patients a possibility to reach their potential,” before going on to state, “And this is what we [Genzyme] started.”
The company's single point agenda was to talk about the efforts it had made to promote the understanding of rare diseases in India. My "single point agenda" was to talk about its operations and orphan drugs—a term used for medicines that are developed to treat a rare medical condition, the illness itself being referred to as an orphan disease. According to the Rare Diseases Act of 2002, an ailment may be classified as an orphan condition in the USA, if it affects fewer than 200,000 people. Orphan drugs now constitute a sector that is largely recognised as both niche and lucrative. Last year, EvaluatePharma’s Orphan Drug Market Report predicted that the orphan drug market would grow at an annual rate of nearly 11 percent across the USA, Europe and Japan. The same report also estimated that the growth for drugs treating larger populations would only be around 4 percent.
This would imply that it is now logical for pharmaceutical corporations that have traditionally focused on the “blockbuster model”—the strategy of pursuing drugs that cater to high burden and commonly occurring diseases such as diabetes and heart ailments—to look at the orphan drug model as a viable means of generating revenue. As Moody’s Investors Services—the bond credit rating business of Moody’s Corporation—noted in May 2015, "Nearly half of the recent M&A [mergers and acquisitions] activity in the pharmaceutical sector has been for deals involving orphan drugs.” Genzyme’s association with Sanofi is, in fact, the result of one such acquisition in 2011.
I began by asking Incerti about Genzyme’s patients in India—the company’s representatives said that there are close to 100—and their ability to pay for the drug. Incerti told me that, “These are patients that we have been following and have received the treatment completely free of charge under our charitable access programme.” I was taken aback, and asked him, not without some bewilderment, if this meant that all of Genzyme’s patients in India were being paid for by the company. When he responded once again, in the affirmative, I asked, “Every single one of them? So, you are making no money out of India?” Incerti replied, “This is an important question. We are not doing this pro-bono because that will be wrong. These patients need to be recognised for their diseases at [sic] government or state level. In all countries—we recognise needs and give treatment free of charge but always as a part of the programme that we call ‘shared responsibility.’ So eventually the government or the state or the insurer take charge—because this is the only sustainable way to create a system of reimbursement.”
Our exchange had now begun to show the first signs of the hostile tenor that would colour my memory of the entire interview. I attempted to push Incerti for details once again, asking him, “Let me see if I am getting this right. So far, all your patients in India are through the charitable access programme. You are hoping to have insurers or the government take charge of the newer patients you get?” Before Incerti could give me an answer, Raina stepped in, “We have patients under the charitable access program but there are also some patients who pay—the organisations where their parents are working are paying for it.” By this point, Shah, the Edelman executive, was visibly uneasy. She fidgeted in her seat, displaying her irritation with the circular conversation. My own patience with the ambiguous answers was now wearing thin, and so I proceeded to ask some basic questions that I hoped would help me gain a little more clarity on Genzyme’s operations in India.
Directing my question to Incerti, I asked, “What was your revenue from India for the last year?” Thomas, the communications director, answered instead, “We don’t share that.” Raina added, “But, I can tell you the number of patients on commercial therapies is extremely small.” I continued, “Which is how much?” Raina’s response was not unexpected, “I will not share the number—but it is a very, very small number.” Incerti supplemented this answer by saying that, “I hope you realise that treating 100 patients for so many years brings you [Genzyme] really a huge commitment. You don't do it for really commercial purposes. We want to introduce these therapies and then create a sustainable system.” Somewhere along the line, my “one-on-one” interview with Incerti had turned into a conference: with me on one side, and four of the company’s representatives on the other.
I tried to change tack and ask Incerti about the revenue model that companies in the orphan drug market follow across the world. I observed that the market was profitable since there was little transparency on the mechanism that was used to arrive at the prices for these drugs. Incerti responded by calling my assumptions “really wrong.” When I brought up the NIH’s contribution to the research for Genzyme’s signature drug, Cerezyme, he said, “The research in the NIH was done by Dr Roscoe Brady. They isolated the idea of ERT [Enzyme Replacement Therapy]. It did not work originally because the enzyme was an extract of placenta and when it was infused in the blood, it was picked up by the liver because it did not enter the lysosome intracellularly.” Incerti continued, “Bulk of scientific research and all of the clinical trials were done by the [sic] Genzyme.” He added that, “It was a purely entrepreneurial venture those [sic] that created good science—so no government money.” When I asked him about whether the orphan drug market could emerge as a viable mode of generating money for established pharmaceutical companies, Incerti insisted that these “entrepreneurial ventures” had not been undertaken as “a main source of revenue generation” for the companies.
“The orphan drug market is a very special world,” Incerti noted, when I asked him to comment on the high return on investment that this segment yields according to the OTA report. He was right. It is special and it is booming. The origins of this burgeoning market can be traced back to a law in the United States called the Orphan Drug Act of 1983. Under this act, the government in the USA financially incentivised the development of orphan drugs. It gave the companies that produced these drugs marketing exclusivity by blocking the entry of competitors for seven years and granted them a 50 percent tax credit on the costs that are incurred on the research and development. The success of the original Orphan Drug Act in the USA led to adoption of similar laws in other key markets—most notably in Japan in 1993 and in the European Union in 2000. The immediate effect on prices is hard to miss: as the 2014 report on the Orphan Drug market noted, the average cost of treatment involving orphan drugs is 19 times higher than that requiring more conventional medicines.
According to the 2014 Orphan Drug Report, “the industry has rushed to develop orphan drugs in recent years because they cost their developers less to put through clinical trials, and command higher prices when they do launch. Trial sizes are naturally smaller than for diseases with large populations, and the lack of alternative treatments give orphan agents an advantage when up for regulatory review. Tax incentives reduce development costs further. And when orphan drugs do reach the market, on average their cost per patient is six times that of non-orphan drugs, a clear indication of their pricing power.”
A testament to this trend is the success of Genzyme, which made €2,604 million—$2,939 million according to the current conversion rate—in the last financial year. The company’s major sources of revenue were four enzyme replacement therapies. As of now, India has no legislation pertaining to orphan drugs. This is partly why companies such as Genzyme tie up with patient support groups and physicians directly to increase their patient pool. How the patients buy the drug, however, is a different question altogether.
But this is not a conversation the representatives I met from Genzyme were willing to have. I asked Incerti about his outlook on India’s liberal Intellectual Property Rights—a subject of interest to pharmaceutical companies that have a presence in the country—but was told by Thomas that he was not the right person to talk about it. I was baffled, since Incerti had mentioned the need for an Orphan Drug Act in India in the course of our conversation. It seemed, to me, overtly simplistic to lobby for new, pro-industry legislations such as the OD Act while ignoring the current patent regime. Thomas did however tell me, that, “You need to meet us more often, because you are making broad statements.” Shah chimed in, “I will set up another meeting with you but Carlo [Incerti] is here for a specific purpose and we want to focus on that story.”
It now appeared that my only option was to get as much information as possible about the campaign that they were so eager to talk about. I asked, “So, what is the scale of 'Stand up for Rare' at this point?” Raina said, “That is an internal campaign.” I tried again, “What exactly does this campaign entail?” Thomas responded this time and told me that it was intended to “create more awareness.” By this point, a little more than forty minutes into the interview, Thomas had not just appointed herself the spokesperson for Genzyme’s motley crew, she had also assumed the role of the interviewer. She turned to Incerti, who had made his growing discomfort with the meeting clear by choosing to maintain a stoic silence, and asked him to elaborate upon Genzyme’s “shared responsibility” programme for me. Incerti responded, albeit unwillingly, by talking about how Genzyme was engaging with government officials, patient support groups and physicians in India to “develop a sustainable model.” In what would be my final effort for the day, I attempted to nudge the group into talking about specific details once again and asked Incerti whether representatives from Genzyme had met anyone from the government at the state or central level. Incerti did not reply, but Thomas did: “While it is good to look at the market and how much sense it makes for the industry, the people sitting in this room are looking at individual patients. We are looking at what it means to them and their lives. It is not about someone out there. It is about my child. My brother. This is about my family. And therefore, we take it personally.”
The meeting that had gone on for over an hour ended shortly after. Two days after the interview, a representative from Edelman informed me that the company would no longer be able to follow up on its initial promise of introducing me to its first patient in India. Yesterday, I attempted to reach out to the public relations company and sent in an email with a set of written questions to confirm a few details about Genzyme. The representative from the agency responded with a link to the company’s official website—that offers very little of the information I was seeking. Today, I called Shah and was told, “I am sorry, we are not going to respond to the queries.” Shah offered to make the case study available to me now, but finally concluded by saying that both she and “the client” were extremely upset because of the story. Genzyme’s altruistic outlook, it would appear, does not extend to journalists who ventured to ask the company questions that it was not ready to answer.
A previous version of this story incorrectly noted that the price of Cerdelga will reportedly be $310,350. The Caravan regrets the error.