Saturday, January 5, 2013

Unbridled Greed in the Pharmaceutical Industry – Just Another Day at the Office for Questcor and its Drug Achtar

So What If It Charges $100,000 to Treat a Fatal Condition in Babies?

[Editor's note:  It is only January but it is difficult to envision a more depressing or disgusting Post than the following one.]

Need a good case of revulsion after all the holiday cheer.  Look no further than the U. S. health care system.  Case in point, a drug that the manufacturer Questcor charges outrageous prices to treat very sick babies.

For several years, Questcor, which is based in Anaheim, lost money on Acthar because the drug’s market was so small. In 2007, it raised the price overnight, to more than $23,000 a vial, from $1,650, bringing the cost of a typical course of treatment for infantile spasms to above $100,000. It said it needed the high price to keep the drug on the market.

Of course, it turns out that like any other greedy drug company that exploits its control over the health of others, its justifications are just not true.

But Questcor did almost no research or development to bring Acthar to market, merely buying the rights to the drug from its previous owner for $100,000 in 2001. And while the manufacturing of Acthar is complex, it accounts for only about 1 cent of every dollar that Questcor charges for the drug.

Okay everybody, do the math.  To provide a drug treatment for infantile spasm, a condition that can be fatal Questcor charges $100,000 for a drug that costs $1,000 to make.

So why do this?  For the money of course.

The results have been beyond even the company’s wildest dreams. Sales of Acthar, which accounts for essentially all of Questcor’s sales, totaled nearly $350 million in the first nine months this year, up 145 percent from the period a year earlier. In the same period, Questcor’s earnings per share nearly tripled, to $2.12. In the five years after the big Acthar price increase in August 2007, Questcor shares rose from around 60 cents to about $50, in one of the best performances of any stock in any industry.

And if a few babies have to die, or health care costs have to skyrocket, or insurance costs go up astronomically, well that’s just the American health care system at its best.  At its best for investors of course.  For babies, well not so good.

“It made us so sick to the stomach — just the fact that something like that could happen overnight with a drug my child needed to live,” says Christina Culver of Colorado Springs. “It’s just like someone saying, ‘I’m going to charge you for oxygen now.’ ”

Ms. Culver’s son Tyler was in the hospital, being treated for infantile spasms, just as the price increase hit. Tyler was due to leave the hospital, and Ms. Culver and her husband, Randy, were to continue the injections at home. Then the Culvers’ insurer, Blue Cross Blue Shield, refused to pay the new high price. After a storm of publicity, the insurer backed down.

And no apparently Questcor does not actually let babies die.

Questcor has carefully executed the orphan-drug playbook. Patients who cannot pay are given the drug free. The company helps with insurance co-payments, to make sure that a patient’s inability to make a co-payment doesn’t stand in the way of the drug being used and the insurer paying $28,000 a vial.

In other words, Questcor shifts the cost onto insurance companies while staving off consumer protests. It has a staff of 30 people who do nothing but work on insurance reimbursements — about one staff member for each of the roughly 30 prescriptions it gets in a typical day for all uses.

Questcor executives argue that with the free drug program and the ample supply, patients have better access to Acthar now than when it was cheaper and often in short supply.

“We believe we’ve been good stewards of this product,” Mr. Bailey says.

Yeah, ‘good stewards’.  And the company will be featured on the TV show this coming year, As the Stomach Turns.   And no, nothing wrong with the U. S. health care system, it’s just the best in the world. 

1 comment:

  1. Yet another brilliant example of what a shit-hole our sick care or wealth care system is!