The U.S. Health-Care System Found a Way to Make Peanuts Cost $4,200

A new, billion-dollar pharmaceutical to treat peanut allergies is up for approval. It’s simply peanut flour.

A knife cuts a long peanut-butter sandwich.
Mike Blake / Reuters

Peanuts are a uniquely dangerous legume. A small fragment of one can kill an allergic person. Even if that person is resuscitated, it’s possible to have permanent brain damage. These severe allergic reactions are relatively rare but difficult to predict. One time, you accidentally eat a bit of peanut and get a little itchy; the next time, your airways close up and someone has to jam a needle full of adrenaline into your leg just so you can take a breath.

About four peanut-allergic children die every year in the United States from a reaction to peanut. Those odds are little reassurance for the millions of kids and parents who live in fear of the worst possible case. As a result, peanuts are no longer welcome in many school cafeterias. Some advocates have proposed outright banning peanuts in public places. Bringing peanuts to a child’s birthday party in Brooklyn ensures that you are never invited to anything again.

Kids’ lack of exposure to peanuts, however, seems to have an unintended consequence: more peanut allergies. In the United States, the latest estimates find that 2 to 5 percent of American kids have a peanut allergy. The number of visits to emergency rooms due to anaphylactic reactions to peanuts more than doubled from 2008 to 2012. If your immune system does not learn to tolerate peanuts, it’s more likely to react violently when it first sees them. Recent guidelines have recommended that parents feed kids peanuts at a young age.

For kids who’ve already developed a peanut allergy, though, a similar but more controversial treatment is up for approval by the Food and Drug Administration. The agency is holding a hearing today with the pharmaceutical company and its advocates, expected to inform a final ruling in coming months.

There is currently no “treatment” for a peanut allergy. As it is, patients are told to avoid peanuts. They are prescribed a syringe full of epinephrine (trade name: EpiPen) and taught to inject themselves if needed. Despite much advancement in medical science and technology over the decades, nothing has given families peace of mind that the allergy itself could be treated, or at least tempered. Until now. The new approach involves trying to reprogram the immune system by giving a person … peanuts.

This might sound dangerous, because it is.

Known as oral immunotherapy, the idea is that by exposing a person to tiny amounts of peanut, that person will slowly become able to tolerate it. Immunotherapy is common practice in the form of allergy shots for things such as pollen: You inject bits of the protein and watch as the immune system gets more tolerant and the person becomes less wheezy.

But oral immunotherapy with peanuts is considered experimental, and no professional organization recommends that parents give any peanuts to an allergic person. Even though some practitioners have concocted homespun protocols, most doctors feel unsafe overseeing any such attempts. Given the potential for a fatal reaction, some believe that no one should yet be trying out the approach outside of a research setting.

In the late 1990s, there was an attempt to treat peanut allergies with a similar shot—an injection of liquid peanut extract. A patient died of anaphylaxis during a clinical trial (reportedly due to a labeling error). The incident shut down the trial and cast a chill over the field for a while. Then, in the 2000s, a group of scientists at Duke University rekindled the idea and chose the oral route. They published proof-of-concept studies in which allergic mice were safely given microscopic amounts of crushed peanut and their allergies waned.

Excited by the prospect of extending this to humans, the influencers of the food-allergy world convened in Boston in 2011 to try to move the concept forward. Food Allergy Research & Education, or FARE, a nonprofit advocacy and lobbying group that’s partly funded by the pharmaceutical industry, held a retreat that included patient advocates, the researchers from Duke and elsewhere, regulators, and industries. The group agreed that in order to study oral immunotherapy safely, scientists needed a standardized product that would allow everyone to know exactly how much peanut was being given.

“The problem was that this wasn’t exactly a product that a typical drug company would make,” says Brian Vickery, an allergist involved in the proof-of-concept studies. Nor was the product a food, exactly. “And there was nothing to be licensed—it was peanut flour, you know?”

After attempting to shop the idea around to various pharmaceutical companies, FARE itself helped found a company that would become known as Aimmune. Though Aimmune was technically a pharmaceutical company, its work focused on making food-based therapies. These are regulated by the FDA as drugs, but under the new and growing category of “biologics”—drugs that come from living organisms, such as vaccines made from bacterial proteins or insulin made from the human hormone. In Aimmune’s case, the biologic would be peanut flour placed in a capsule. The company went public in 2015 after raising $160 million in venture-capital funding.

In 2016, Vickery left Duke to work full time for Aimmune, where he oversaw a clinical trial of the peanut flour. Two groups of about 250 people with peanut allergies took the peanut pill or placebo every day and were monitored over the course of a year. At the end of the experiment, the participants all ate small, gradually increasing doses of peanut, up to about two peanuts. The researchers measured how much it took to cause a reaction. Almost everyone in the placebo group had a reaction before reaching the full amount. But among the people taking the peanut-flour pill, two-thirds could safely eat two peanuts.

Vickery, who now directs the food-allergy program at Children’s Healthcare of Atlanta, went on to publish the findings in The New England Journal of Medicine last November. The study’s other authors remain on Aimmune’s staff. It is not uncommon for researchers to be funded by pharmaceutical companies; it is less common for researchers to be fully employed by the company making the product in question.

Based on this single, year-long trial, Aimmune is now petitioning the FDA to approve its powder as a drug. Instead of “peanut flour,” Aimmune calls the drug Palforzia. It does not promise to give people an ability to eat peanuts—only to potentially protect a person in the case of a small, accidental ingestion. Analysts have put the cost at $4,200 a year. The drug would have to be taken indefinitely.

In a presentation to investors dated September 2019, Aimmune estimated that Palforzia sales would top $1 billion. The document describes tentative pricing between $3,000 and $20,000 a year, and assures investors that insurance companies have already agreed to cover the drug. Sales, it says, will be driven by “compliant caregivers” and “parents and families living in fear of potential life-threatening reactions.” The presentation, which was available on Aimmune’s website, appears to have been removed this morning. (Aimmune did not respond to requests for comment.)

Thomas Casale, a professor of medicine and pediatrics at the University of South Florida, serves as FARE’s chief medical adviser. Casale was a co-author with Vickery on the study of the company’s product. I asked him why other companies couldn’t simply sell peanut powder as a dietary supplement at a cost of a few dollars. In a small 2018 study, researchers reported safely giving 1/125,000th of a peanut to allergic kids and very slowly working all the way up to 12 whole peanuts.

“Well, I suppose they could,” Casale said. But he went on to explain that the real value is billing codes. When peanut flour is an FDA-approved drug, that means doctors can be reimbursed for prescribing it and overseeing its administration. The process can be covered by insurance. As it is, practitioners who offer their own versions of oral immunotherapy have to be paid out of pocket. This makes it inaccessible to many patients. So, essentially, in order to make the therapy accessible, it has to become part of the system. The system is what allows pharmaceutical companies and doctors to charge insurers thousands of dollars for peanuts.

“There’s tremendous demand, because patients feel helpless and terrified,” says Jeff Tice, a physician and health-policy analyst at the University of California at San Francisco. “The insurance companies are getting ready for a large financial impact because this will get taken up quickly.”

The likelihood of rapid, widespread uptake makes concerns about safety especially salient. Tice led a team that did an extensive report on the product for the Institute for Clinical and Economic Review, and concluded that the product stood to be widely adopted without clear benefit, and despite evident risk. Tice does not think it’s ready for approval—because it has not been found to decrease a person’s risk of a severe allergic reaction.

What wasn’t emphasized in the study in The New England Journal of Medicine was that when people started taking the drug, their rate of severe allergic reactions went up by six times. In the lab, the subjects taking the peanut pill were able to eat up to two peanuts. Out in the real world, those people reported many more systemic reactions: 14 percent versus just 3 percent in the control group. “This is just what we’re trying to prevent—having to get taken to the ER and getting injected in school, that sort of outcome,” Tice says. “The trials clearly demonstrated desensitization [to peanuts], but apparently at the cost of more harm, and no clear evidence of long-term benefit.”

In April, a meta-analysis in The Lancet confirmed the same: There was “high-certainty evidence” that peanut oral immunotherapy considerably increases allergic and anaphylactic reactions, compared with avoidance or placebo treatment. The FDA committee lists the intended use of the drug as “to reduce the risk of anaphylaxis after accidental exposure to peanut in patients.” Yet in people who’ve taken the drug, this risk has been shown to go up, not down.

“It’s impossible to know if the increase in anaphylaxis was due to increased exposure to peanuts because people felt protected, or if it was due to the drug itself,” Tice notes. This sort of semi-protective treatment can have the complicating effect of making a person feel more protected than they are in the real world. Letting one’s guard down, even a little, can cause any benefit of desensitization to be quickly outweighed.

In other words, based on what is currently known, the billion-dollar peanut powder is likely to have a net effect of increasing severe allergic reactions to peanuts. The fact that this drug is so close to becoming a household name—despite so little evidence—reflects a broader shift in how drugs are approved. The old standard was that a drug could not be taken to market until it had proved to be safe and effective in two trials with meaningful end points—ideally treating or curing a disease, or at least alleviating symptoms. Over the past decade, the FDA has loosened standards, requiring only some evidence of an effect that may or may not be meaningful.

Desensitizing a person to small amounts of peanut doesn’t mean Palforzia extends people’s lives. It doesn’t mean the drug keeps them out of the hospital or prevents serious allergic attacks. (The FDA does not comment on ongoing hearings and approval processes. The panel is expected to address these concerns today.)

Vickery, who is no longer in the full-time employ of Aimmune, admits that “for an expensive therapy, we don’t know if [Palforzia] even does what it’s supposed to do.” But he sees the implications of this approval as far bigger than peanut powder. “If a start-up can do a trial of 1,000 patients and actually get something to market as the first approved drug for peanut allergy,” he says, investors would flock to the area. Traditionally, it takes many years, multiple trials, and many millions of dollars in research and development to bring a drug to market. “If the first product were to not be approved, that would set the field back immensely,” Vickery says, optimistic that this will actually draw meaningful investment.

Of course, it would set the field back even more if people are harmed by a hastily approved and urgently adopted drug. Everyone I spoke with stressed the need for peanut-allergy treatment, and the demand. Patient advocates are not patient advocates if they push for approval of a drug that does more harm than good.