Roche made over 100 times the cost of a medicine that it sold in India, calculations show; company defends itself

Pharmaceutical giant Roche may have made profits more than a hundred times what it cost the company to bring a rare-disease drug to the Indian market, The Times of India reported on April 28. The drug in question is risdiplam, a medication for spinal muscular atrophy (SMA). The report on Roche's profit estimates are based on evaluations by public health advocates.

Following Roche's refusal to disclose details about the expenses incurred during clinical trials, Knowledge Ecology International (KEI), a non-profit organisation based in the United States that focuses on making medicines more accessible, performed their own calculations, ToI's report (by Rema Nagarajan) said.

They estimated the total cost of the trials to be approximately $50 million. Roche's revenue from risdiplam sales between 2021 and 2024 amounted to $5.8 billion, equating to nearly 115 times the calculated trial expenses.

In reply to the figures provided by KEI, Roche explained, "Only a small fraction of projects succeed in going 'from bench to bedside,' and we must also account for the costs associated with unsuccessful projects, whereas your calculation only considers successful developments. Our commitment to innovation is also reflected in our ongoing efforts to develop next-generation therapies, as evidenced by our continuous work on new treatments for SMA."

The three risdiplam trials referenced by the US Food and Drug Administration (FDA), along with four previous clinical trials, involved a total of 587 participants. KEI arrived at the estimated cost per patient for the trials by synthesizing data from multiple sources regarding the expenses associated with clinical trials. In the United States, there is a tax incentive for qualifying clinical trials related to rare diseases.

When KEI applied this tax credit to the trial expenses, the net costs were estimated to range from $11 million to $25 million. Typically, clinical trials account for about 60-70% of the total costs involved in drug development.

Additionally, Roche received a Rare Pediatric Disease Priority Review Voucher (PRV) in August 2020. This voucher serves as an incentive aimed at promoting the development of drugs and biologics for serious or life-threatening illnesses and can be sold to third parties. In 2020, the estimated market value of a PRV was around $100 million, which exceeds Roche’s spending on clinical trials, as noted by KEI.

Since its inception in 2003, the Spinal Muscular Atrophy Foundation (SMAF) has invested $100 million into the development of treatments for SMA. Roche acquired an exclusive global license for PTC Therapeutics' SMA program for $30 million, which was developed in collaboration with SMAF.

Roche's manufacturing costs for risdiplam are relatively low, as a year's worth of treatment requires less than 2 grams of the drug. KEI estimates that Roche could produce risdiplam for under $50,000 per kilo, or $50 per gram.

In India, the price of risdiplam treatment amounts to approximately Rs 72 lakh per adult patient annually, a cost that is beyond the means of many patients. According to Roche's statement to the Times of India, as of October 2024, out of the 168 patients receiving SMA treatment from Roche, 56 were being treated at no cost through the company's Compassionate Use Program (CUP).

Additionally, 53 patients were covered under various government schemes, including the Central Government Health Scheme, Defence, Employee State Insurance (ESI), and Railways. The remaining 59 patients accessed the medication through Roche's Patient Access Program, initiated in 2021, which allows Roche to provide one free bottle of treatment for every purchased bottle.

Cure SMA, an organisation established by parents of children diagnosed with SMA, has 1,800 registered patients, while the government portal for rare diseases lists 700 registered SMA patients.