Wednesday, July 25, 2018

Shades of Questcor 6

Trevor Foltz splashes in the pool in his grandparents' backyard. His brother and sister join in the fun, as does their father.

Their mother, Danielle, watches from a nearby lawn chair. She's like a hawk, keeping a close eye on Trevor and the rest of her brood.

It was 10 years ago in this backyard when a similar moment of revelry was shattered. Trevor, then a toddler, was running around, having the time of his life, his mom keeping steady watch.

Trevor suddenly came over, placed his hand on her knee and looked directly into her eyes. He tried to speak but couldn't say a word. Then his head twitched ever so slightly to the right. Their gazes locked. Mom's heart wrenched.

It was so mild that Danielle told herself it must have been her imagination. She didn't tell her husband, Jonathan, or anyone else. But moments later, it happened again: Trevor coming to her, resting his hands on her knees, looking into her eyes.

Trevor's condition soon became obvious to all. The Foltzes were eating dinner with friends a few days later when Trevor had one seizure, then another and another.

"Some heartache transcends language," Danielle recalled. "This is one of them."'

The Foltzes had been there before. At 7 months, Trevor was diagnosed with infantile spasms, a rare and catastrophic form of epilepsy. The diagnosis was devastating, forcing the family to cancel an overseas move and fight for their son's life.

It also thrust them into the unregulated world of America's drug prices.

Trevor's doctors said he needed a "miracle drug" known as Acthar. But between Trevor's birth and diagnosis, the price of the drug had shot up from $1,600 a vial to more than $23,000 a vial -- making him one of the first children caught up in one of medicine's most controversial price hikes.

After the initial diagnosis, the Foltzes wrestled with their insurance company for days to get Trevor treated with Acthar. Eventually, the treatment was fully covered, at a cost of more than $125,000. And the drug worked. The tremors stopped.

But more than a year later, on that day in the backyard, the seizures had returned. Another round of treatment was in order.

Again, the Foltzes ran into red tape. The insurer was balking at spending another $125,000, and Trevor's parents worried whether he would get the precious vials of medicine needed to give him a shot at a normal life.

A decade on, the pain is still raw. Still palpable. Still real.

"It feels like we're pawns," says Trevor's father, Jonathan. The drugmaker, he says, "is allowed to take advantage of us, and we have to move on and go about the challenge of living."

"It seems very backwards, from the top down -- and we're at the bottom."…

But we rarely hear about the anatomy of a price hike, especially one that climbed for more than a decade in the face of a federal investigation and protests from top medical associations.

I wanted to know how a drug invented in the 1930s could go from $40 a vial in 2000 to $39,000 in 2018 -- essentially from the cost of a coffee maker to the price of a new car with leather seats. With a treatment regimen requiring at least three vials over the course of several weeks, this drug costs more than many people's homes.

The sharp jump in Acthar's price outraged families, doctors, pharmacists and hospitals -- and led Danielle Foltz to testify before Congress against the increase.

It ultimately resulted in a $100 million settlement between the government and the drugmaker -- as well as revelations that Medicare has spent nearly $2 billion covering Acthar prescriptions for seniors while the drugmaker paid millions to prescribing doctors.

The exorbitant price also forced doctors and hospitals to question whether a $20 alternative would work just as well.

I first heard about Acthar from the epilepsy community; my own son has an uncontrolled seizure disorder. Parents would often cry when describing the cost of Acthar and the struggle to get the medicine for their child.

Please tell this drug's story. Our story.

Imagine holding a vial worth more than your minivan, your hand trembling for fear of dropping it, while you administer a shot with a 1-inch needle to your seizing, screaming baby.

I spent the past year canvassing the epilepsy community, talking to scores of people, including 10 parents whose children struggle with infantile spasms and more than a dozen doctors who treat them…

The skyrocketing cost of Acthar led to huge increases in revenues for the drugmakers, Questcor and Mallinckrodt, not because of any breakthrough in treatment, critics say, but as a result of higher prices, aggressive marketing and an alleged effort to thwart all competition.

That allegation is what led to the government's case against Mallinckrodt, which purchased Questcor in 2014. Mallinckrodt settled without any admission of wrongdoing.

"This was a particularly egregious situation where they raised prices extraordinarily, but then they sought to buy out a potential competitor to make sure those prices were going to stick as long as possible," said Mike Moiseyev, the deputy director of the Federal Trade Commission's Bureau of Competition, who helped build the government's case.

Questcor had purchased Synacthen, a synthetic version of Acthar, and then made sure it never entered the US market, the government alleged. "When Questcor deprived [babies] of an imminent alternative in the form of Synacthen, they truly became victims of that scheme," Moiseyev said.
And though Mallinckrodt says it will cover the cost of Acthar if insurance can't, some doctors say high-priced drugs are raising health care costs for all of us in the form of higher premiums, co-pays and hospital visits.

From months of reporting, the magnitude of the controversy became clear. Parents are distraught and angry. Neurologists are perplexed and frustrated. Mallinckrodt maintains that it is acting "responsibly and ethically" and has made only "modest price adjustments in the mid-single digit percentage range" since purchasing the drug.

"H.P. Acthar Gel makes a significant difference in the lives of very sick patients with unmet medical needs. We are proud of the drug and the important investment we are making in it," Mallinckrodt told CNN in a statement.

Still, the drug's price has continued to rise. It's now nearly $39,000 a vial -- an increase of $7,000 since Mallinckrodt purchased Questcor and 97,000% since Questcor first acquired Acthar in 2001. By 2015, Mallinckrodt was reporting net sales from Acthar of $1 billion…

Even at some top medical centers like Johns Hopkins, Acthar isn't offered as a first-line treatment due to its exorbitant price tag.

"We have found oral prednisolone to be equally effective, as have several other researchers," said Dr. Eric Kossoff, director of Hopkins' pediatric neurology residency program.

Dr. Eli Mizrahi, president of the American Epilepsy Society, said Acthar's high cost is a constant worry. Simply put, he said, paying tens of thousands of dollars a vial is not viable in the long run.
"It's a concern because it's a barrier to care," Mizrahi said. "I'd like to hear why the drug is so expensive and what [the drugmaker is] doing to bring the cost down."

"For many pediatric neurologists, ACTH is not a treatment option," said Dr. John Mytinger, a pediatric neurologist at Nationwide Children's Hospital in Columbus, Ohio. "This may be because the clinician believes that prednisolone is just as good as ACTH and/or the expense of ACTH cannot be justified."…

But those were nothing compared with the rise in price of Acthar.

Questcor Pharmaceuticals had paid a mere $100,000 for the rights to the drug in 2001.

The company first raised the price from $40 to $750 a vial shortly after acquiring it. The price doubled over the next few years. Then, on August 27, 2007, the price shot up overnight from $1,600 to $23,000 a vial.

The hike was so dramatic that the Epilepsy Foundation, the American Epilepsy Society, the American Academy of Neurology and the National Association of Epilepsy Centers fired off a letter demanding answers.

The Epilepsy Foundation was especially shocked. The drug's previous manufacturer almost took Acthar off the market in the mid-1990s after federal regulators found major problems at a factory. But the Epilepsy Foundation pleaded for the drugmaker to keep producing it for babies with infantile spasms…

Its new owner, Questcor, would make Acthar the centerpiece of its business, stoking controversy with the massive price hike in 2007. It would ride the price increase to record profits and eventually a mega deal, getting bought out by Mallinckrodt for $5.6 billion in cash and stock in 2014.
Not bad for a company that paid $100,000 for the drug…

Dr. Stephen Schondelmeyer has followed the price of Acthar ever since it skyrocketed overnight in 2007. He's the director of the PRIME Institute, a research organization that studies economic and policy issues related to pharmaceuticals.

"It wasn't because of competition. It wasn't because of research and development costs," he said. "The company saw an opportunity to raise the price, and they did it."

How can the company keep raising the price, even after settling the monopoly case?

"When you have a unique position in a marketplace," Schondelmeyer said, "you can charge whatever you want."

He called the 97,000% drug hike, from 2000 to today, "one of the highest price changes ever" in the history of the United States…

The city of Rockford, Illinois, also sued Mallinckrodt after the city got stuck with a nearly $500,000 bill to cover the costs of Acthar for two infants of city employees. The half-million-dollar charge nearly blew through the city's $3.5 million allocation for prescription drugs for city employees.

"The tale of how a 65-year-old brand medication could rise in price from $40 per vial in 2001 to over $35,000 per vial by 2015 is a story of, perhaps, the most egregious monopolistic conduct and unfair trade practice in US history," the city of Rockford alleged.

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