Drug Price Soars from $1,650 to $23,000 Per Vial
To Treat Babies with Infantile Spasms: Parents and Physicians React
September 17, 2007 -- Reston, VA and Boston, MA
When the price for a single vial of medication used to treat infantile spasms (IS), a rare form of epilepsy, went from $1,650 to $23,000 the immediate reactions in the medical community ranged from anger and shock to relief that a company was going to keep the drug on the market.
The drug in question, manufactured by Questcor Pharmaceuticals, Inc. (www.questcor.com), is called H.P. Acthar Gel®, a natural form of adrenocorticotropic hormone (ACTH). While it is the drug of choice in the United States for this devastating condition, which affects about 2,000 babies a year between the ages of 3 months and 9 months in the US alone, it is not approved by the Food and Drug Administration (FDA) for IS.
The price jump was announced on August 27, 2007 by the company and has generated more questions than answers. Why such a major price escalation per vial? Will insurance companies cover the cost? How will families pay?
The families of those whose children have IS are very concerned and the close-knit community is banding together seeking answers and updating their blogs. Mike Bartenhagen, a parent concerned about available information, has put together www.infantilespasms.com which has a forum on the site. Jen Smith has also been following this story closely and her blog is http://blogs.timesunion.com/austinbenconnor/?p=484.
The increase appears to be related to the Orphan Drug Act of 1983, which grants certain tax credits and exclusivity for seven years to companies who invest in medications for specific medical conditions that affect fewer than 200,000 people in the U.S.
Steve Cartt, Executive Vice President for Corporate Development at Questcor, said: “The main reason that we moved Acthar to more of an orphan-style pricing model -- and we recognize that it is a fairly dramatic move – was to make sure that the product continues to be available for patients for the long term. In order to make this happen, Acthar had to be economically viable on a stand alone basis, which it has not been previously.”
Prior to Questcor's acquiring H.P. Acthar Gel® in 2001, there was a period when it was rationed by the National Organization for Rare Disorders (NORD; www.rarediseases.org). Cartt added, “Due to our investments in manufacturing upgrades over the last three to four years, we solved the problems of manufacturing and now can consistently supply the drug.”
Cartt added that because of his company’s investments in Acthar, Questcor lost “a total of $16 million since January 2006 -- and in 2007 we had to let half of our employees go. We are now down to only about 30 people.”
Some physicians are outraged
While some physicians say they understand the rationale for the price increase, pediatric neurologist Eric Kossoff, MD says "Our community is in an uproar. Motions and discussions are going on with just about every medical society. I don't know what we can do, but we can make a unified statement and express our dismay." Dr. Kossoff is a pediatric epileptologist and the Medical Director of the Ketogenic Diet Center at Johns Hopkins Hospital in Maryland.
Dr. Kossoff is concerned about the reaction of families to the cost of the drug, which will be given to the child while hospitalized, although most children will go home within a week. Once at home, it is often up to the parent or visiting nurses to administer the drug into the child's muscles.
"Think of the scenario," said Dr. Kossoff. "A child is admitted to the hospital semi-emergently for IS. First you give the family the very bad news about the child's condition. Second, you tell them there will be a lot of tests done in the hospital because although sometimes you know the cause of IS, sometimes you have to figure it out. Third is the already difficult decision about therapy. We must inform parents that they may be administering the drug while the child is home and that that there is a risk of gastric ulcers, edema, and infection. This is not a benign drug, but it is a very effective drug. Most of our children make it through the first month and continue to improve."
The fourth issue that troubles Dr. Kossoff is price. “We must say to a parent, 'If we give your child ACTH there may be significant financial implications.'” He suggests that if insurance is not going to pay for the drug, and parents will not be able to afford the co-pays, they might have to advise alternatives – of which there are very few in this country.
The medical community and researchers world-wide are actively looking for alternatives to ACTH. It is expected that those searches will accelerate.
Vigabatrin as an alternative
While ACTH is generally accepted as the drug of choice, alternatives under study are vigabatrin, topiramate, the ketogenic diet, and zonisamide. Dr. Kossoff noted that a 2004 American Academy of Neurology practice parameter stated that vigabatrin was "possibly" effective, whereas ACTH was "probably" effective.
Vigabatrin is under study by Ovation Pharmaceuticals, Inc, Deerfield, Ill (www.ovationpharma.com ) and soon to be reviewed by the FDA. Stephen Collins, MD, PhD, Chief Scientific Officer and Vice-President of Clinical Affairs said, “We have a team working full time – seven days a week – to complete the data package, which we hope to submit to the FDA late this year or early next year. In the process, we’ve been working closely and productively with the agency to be sure we have the necessary data on vigabatrin. The FDA has agreed to a six month review cycle and it is our hope that vigabatrin will be available in late 2008.”
Accepting the inevitable on ACTH
Meanwhile, physicians and pharmacists are coming to terms with the new drug pricing. Paul Jensen, PharmD, Clinical Leader from the Pharmacy Department at Children's Hospitals and Clinics of Minnesota sent a memo to his team regarding the changes, noting that there is only one specialty distributor, Curascript, which is the pharmaceutical distribution center for Questcor. He said: "We will provide the drug while the patient is at our hospital. Because of the expense of the drug, it is likely that prior authorization will be required from the patient's insurance. This authorization process will take time and may delay the discharge process. As such, we are advising that Curascript be contacted as early as possible for patients who are likely to go home on Acthar gel. The challenge will be in identifying those patients."
Will patient assistance programs work?
Cartt said that Questor has set up a program to help patients and their families: “The typical process is that a physician first sends a prescription referral into our reimbursement hub by contacting a central number, 888-435-2284, which is called the Acthar Support and Access Program (ASAP), which is run by HealthBridge of Boston, Mass. They will work with the patient’s insurance company, if they have one, and track the progress of the prescription until it arrives at the patient’s doorstep.”
We called the ASAP line and were referred to a physician’s form. http://www.acthar.com/Pdf/Prescription_Referral%20Form.pdf
However, we also asked what the procedure would be if parents of a patient called directly. Those callers are referred to NORD.
Maria Hardin, Vice President of Patient Services for NORD, further clarified the process. She said, "Once the ASAP sends us an IS referral we do a qualification over the phone. If a family qualifies, we authorize a shipment. However, I want to be clear, these are disease-specific (not product-specific) co-pay assistance funds for patients who have health insurance, but who are hit with extremely high co-pays.”
Ms. Hardin added: “When a doctor writes a prescription for ACTH for IS or another drug, we take if from there. While we are seeing many state Medicaid programs dragging their heels with regard to reimbursement, we are working very expeditiously especially for IS because these babies need to be taken care of immediately. NORD serves as a vital conduit in providing the drug as soon as possible.”
The question of reimbursement
NORD still administers the Acthar Gel Patient Assistance Program, which provides free drug service to the uninsured and undersinsured. But will major health insurance providers reimburse? We contacted the executive offices of both Blue Cross, Blue Shield and also United Healthcare and were not able to get a comment from the medical directors.
Assuring the drug is available
There appears to be an across-the-board frustration with the price increase, the uncertainty as to how reimbursement will work, and the dramatic need for the babies to receive the medication as soon as possible because of the high probably of developmental delays. Weighing these factors, James Wheless, MD, who is at LeBonheur Childrenís Medical Center and St. Judeís Childrenís Research Hospital in Memphis, Tennessee said, “My biggest concern is that the drug continues to be available.”
Dr. Wheless, who has consulted for Questor in the past year, recalls the nationwide shortage of ACTH and said, “It was a problem not being able to obtain the drug easily, and it affected patient care. If this new pricing model insures that the drug is around and always available then it motivates insurance companies to pay for it and motivates the company to keep on manufacturing it.”
In the greater mid-south such as areas in Tennessee, eastern Arkansas and central Mississippi, accessibility to the drug will be key once the families are at home. This medication will not be available through local pharmacies. “If some families are not properly and quickly reimbursed, it will be a hardship”, Dr. Wheless added. “It has to work for our patients and for the company.”
We will continue to follow this story and report on blogs that are carrying news updates.
# # #
Disclosures of potential conflicts of interest relevant to this article:
- Dr. Kossoff has no disclosures.
- Dr. Collins is Chief Scientific Officer and Vice President of Clinical Affairs, Ovation Pharmaceuticals.
- Dr. Wheless is a consultant for Questcor, Ovation Pharmaceuticals, and Ortho-McNeil Neurologics; serves on the speakerís bureau for Ortho McNeil Neurologics; and has grant support from Ovation Pharmaceuticals and Marinus Pharmaceuticals.
Story updated on 09/17/07
Edited by Steven C. Schachter, MD
Back to top
Return to Articles and Publications