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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, Informative) by sjames on Tuesday February 18 2020, @06:21PM (2 children)
It's beyond that. The manufacturer bought the rights to a synthetic equivalent with the intent to shelve it in order to maintain the monopoly. The courts ordered them to license those rights. Somehow still nobody is competing in spite of a ready opportunity for a high margin product.
The problem is that it would be high margin but low demand.
It is quite simply a corner case where market forces are ineffective. We can either recognize that and fix it, or we can continue to beat ourselves over the head with our own ideology.
(Score: 0) by Anonymous Coward on Tuesday February 18 2020, @07:16PM (1 child)
If someone competed, they would drop the price again and undercut their competitors until they went under. Then the price would be raised once again. Thus there's no point to licensing those rights as you'll be going bankrupt right after you sell your first batch.
(Score: 2) by sjames on Tuesday February 18 2020, @07:40PM
Right. Thus my comment that it's time to admit that Capitalism isn't all things to everyone, the ultimate panacea. This is one of those corner cases that needs another answer.