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from the identical-drug-Synacthen-in-Canada-costs-about-$33 dept.
Television station WSB-TV 2 in Atlanta, Georgia reports Metro city sues drug manufacturer over '97,500% price increase' for seizure medicine:
The city of Marietta, Georgia is suing drug manufacturer Mallinckrodt after Mallinckrodt increased the price of the drug Acthar by 97,500%.
"Acthar used to cost $40, but Mallinckrodt has raised the price of the drug to over $39,000 per vial," the city claims in its lawsuit. "This eye-popping 97,500% price increase is the result of unlawful and unfair conduct by Mallinckrondt. The City has expended over $2 million for just one patient covered by the city's self-funded health plan."
Atlanta pharmacist Ira Katz said Acthar is what's called a "biologic" and they can be classified as specialty drugs.
"They put them into the specialty class, and the prices are outrageous, just outrageous," Katz said.
The company sent a response to the station's request for comment. In part, it states:
In 2017, Mallinckrodt specifically offered to work with representatives for the City of Marietta in response to inquiries the City had made about the price of Acthar. The City declined to meaningfully participate in that process.
"Mallinckrodt acquired Acthar in August 2014, well after the price increase you reference in 2007 was undertaken by Questcor, the previous owner of Acthar. Under our stewardship, any price adjustments to Acthar have been limited to the mid-single digit percentage range. We want to help ensure patients have access to and can benefit from our therapies. That's why we offer significant discounts to many payers and customers, which the prior owner did not. Additionally, Mallinckrodt offers a range of robust free drug and commercial copay assistance options for patients, in compliance with applicable laws.
Apparently, there is a long history of complaints about the pricing for Acthar. See, for example, this December 2016 story in The New York Times. Here's another where CBS' 60 Minutes did an investigation. Then there are these two June 2018 stories from CNN. The focus of the first story is an overview of this drug's price and history. The second story has as its focus the impact on a single child and his family.
(Score: 3, Interesting) by mobydisk on Tuesday February 18 2020, @03:32PM (1 child)
These articles about drug prices are rambling and incoherent. It's hard to come to a decision. I hope the lawsuit exposes some details better than the dead-end investigations.
The 60-minutes article doesn't provide enough information to piece together what happened. Company A bought Company B. Company A increased the price $8,000. Company B had already increased the price tens of thousands of dollars. But neither company had any explanation. And there's no basic sales information either: nothing about how much of the drug was sold, revenues, profits, manufacturing costs - nothing.
If you were going to price gouge, you wouldn't raise the price a thousand fold in one day. You would do it by 5% a year or something, and publicly blame regulation. This stuff just doesn't pass a common-sense test.
The article goes on to talk about the FDA approval, which happened in 1952 - so that's not the cause. There's nothing about patents. Then it talks about a company "Express Scripts" that didn't negotiate a better price, but they got no comment from the company as to why. It's just dead-end after dead-end. This should be straightforward business economics. Why can we not figure this out?
We all get very upset about drug prices, yet I can't find a coherent article explaining the problem. 9 times out of 10 when someone complains about something like this, it's because they don't understand what is going on economically. But when the companies clam-up about it, we have no choice but to assume they are crooks.
(Score: 0) by Anonymous Coward on Tuesday February 18 2020, @06:12PM
https://www.ajc.com/news/local/marietta-sues-drug-company-over-medicine-that-went-from-000/QB2iFp5ejKQ9fzbZQKYCSI/ [ajc.com]