Miracle Drug: Only $350,000 a Year

By Dick Thompson/Washington

CEREDASE, A BREAKTHROUGH TREATMENT for the crippling and sometimes fatal , genetic disorder called Gaucher's disease, is changing lives, even saving them -- but not always making them better. For Jeanne Rogal, 29, of Harrisburg, Pennsylvania, Ceredase has reduced the pain from her crumbling bones, removed the lipid deposits choking her liver, and restored her energy so she can enjoy life again. But with it comes a crushing financial burden: Ceredase can cost up to $350,000 for a year's treatment.

Rogal has already exhausted one health-insurance policy and is whittling down a second. Although Medicaid pays part of the cost of the drug, the government dictates brutally austere terms: if Rogal accepts the payments, she isn't allowed to own major assets or have a bank account with more than $250 in it. "I finally have this great new life where I can do things," she says, "and I can't even save the money for a vacation."

Ceredase, and the Massachusetts company called Genzyme that makes it, illustrates how some drug companies have turned government research and regulations into Big Business. The Federal Government financed the discovery of the drug and then paid tax dollars so that entrepreneurs could learn how to manufacture it. Now it is paying as much as 20% of the nation's Ceredase bill through Medicare and Medicaid. And Ceredase isn't the only high-priced drug that has flowed from government laboratories. The new chemotherapeutic taxol, as well as almost half of all other cancer drugs, owes its existence to government scientists, as do nearly all AIDS drugs.

The story of Ceredase starts with government-sponsored scientists who in 1965 found that Gaucher's disease resulted from the lack of an enzyme. Later another group of government scientists patented a method for harvesting that enzyme, and contracted with researchers at Tufts University to supply the enzyme in large enough quantities for research.

During the 1980s the Tufts researchers gradually spun away from the university and started the biotech firm Genzyme. By then the government had spent nearly $9 million -- fully 20% of all measurable research-and- development costs, according to the Office of Technology Assessment -- to aid in developing Ceredase. Genzyme disputes the figure and says the government provided only 14% of the drug's development costs. Still, when the company brought its drug to market, it set the price extraordinarily high, claiming that the process of harvesting the enzyme from human placental tissue is expensive, a claim challenged by a growing number of Gaucher's patients. "This is the worst illustration of corporate greed I've seen," says Abbey Meyers, executive director of the National Organization for Rare Disorders. Responding to Meyers, Genzyme's chairman of the board, Henri Termeer, says, "It's not a matter of greed. It's a high-cost product. There is no flexibility on price here."

Genzyme's marketing tactics have also raised eyebrows. Company salesmen use the unusual tactic of contacting Gaucher's victims and their doctors directly, enticing them with videos and publications suggesting that a healthy, pain- free life is at last at hand.

In spite of the aggressive commercial campaign, a mere 800 of the 11,000 Gaucher's patients who need treatment have signed up for Ceredase. One who refused, Denver teacher Karen Guth, estimates she would need to spend $350,000 for the drug each year. "It's a terrible position to put human beings in," she says.