House Oversight Committee questions drug industry executives on high prices

Michael McAuliff reports for Kaiser Health News on how yet another pharmaceutical company, Mallinckrodt Pharmaceuticals, acquired a drug that treats a rare disease and sent its price soaring. The US House Oversight Committee questioned executives at Mallinkckrodt, as well as Amgen, Novartis, Celgene, Bristol Myers Squibb and Teva about their drug pricing practices. But, when will Congress put an end to their price-gouging?

Mallinckrodt Pharmaceuticals bought the right to manufacture H.P. Acthar gel for $5.8 billion from Questcor in 2014. The orphan drug has been around for decades but the price keeps rising. Even though only a relatively small number of people take the drug, Mallinckrodt knew it could raise the price higher and turn a great profit off of it. Acthar improves the lives of about 2,500 children in the US who have infantile spasms.

What’s extraordinary is that, in 2000, a vial of Acthar cost $100. By 2014, Questcor had raised it to $31,626. Mallinckrodt raised the price by more than $8,000, to just shy of $40,000 a vial, after it bought the right to manufacture it. That’s $240,000 for a six-week, one vial a week, course of treatment, which is not atypical.

Mallinckrodt sees Acthar as a cash cow, not a critical treatment many children with infantile spasms can’t afford. Its executives know the pharmaceutical company can raise some drugs’ prices substantially, and they can make out like bandits. They once had prepared materials that literally said: “Acthar Modernization Strategy defines the Future of the Brand as either a Growth Asset or Cash Cow.”

For sure, Mallinckrodt is pushing the drug every way it can. In 2011, Medicare spent less than $50 million on the drug. In 2018, it spent $725 million.

There’s general agreement among members of Congress that the cost of prescription drugs is too high. House members have passed HR3 which would have Americans paying about the same price as people in other countries, for many of their drugs. But, Republicans say they worry about hurting the new drug pipeline and appear to care less about access to critical medicines.

Here’s more from Just Care:

• Prescription drug costs soar for people with Medicare Part D
• Risk to older adults of underuse of prescription drugs
• President Trump’s executive order won’t lower drug prices
• Drugs with high prices are often no better than lower-cost drugs
• Six things to know about your over-the-counter medications