Monday, October 08, 2007

Once Again, Oh the Prices We Pay: Acthar for Infantile Spasms

We have often discussed how in today's dysfunctional health care system there seem to be few restraints on the pricing of goods and services. At least when the pricing is of new, high-technology, and innovative items, those selling same often justify their prices by the expense of developing innovative technologies, and the values these items provide to patients. These arguments, however, are often hard to judge, since production expenses are rarely documented, and value to patients is not always obvious or easy to measure.

Such arguments may be particularly hard to swallow when an old, low-tech drug is re-packaged as new and innovative. For example, we discussed how thalidomide, originally marketed as a tranquilizer (and never marketed in the US because it produced birth defects when given to pregnant women), is now used to treat malignancies. However, although the drug is available outside of the US for pennies a dose, for its new use the price will be about $25,000 a year.

The Philadelphia Inquirer recently reported another similarly extreme example of drug pricing.

There's one drug most doctors turn to first when babies have catastrophic seizures: a natural hormone sold under the name H.P. Acthar. It's the gold standard to stop seizures that can ruin a child's chance for a normal life.

On Aug. 27, the lone maker of that drug raised the price from $1,650 a vial to more than $23,000 a vial, sending the price for an average patient to $100,000 or more.

Acthar is actually a very old, and familiar biological.

What sets apart Acthar is that it is an old drug. The compound (Adrenocorticotropic hormone) was first synthesized in the 1940s by Armour & Co., the canned-meat firm, which harvested it from pigs' pituitary glands.

The drug, used for years to treat Infantile Spasms, was made by Rhone-Poulenc Rorer Inc. and then by its successor, Aventis. It was never a big seller, and the former owner nearly stopped making it in the mid-1990s - only to see it brought back after a storm of pediatricians complained that there was no substitute.

Questcor bought the rights to the drug in 2001. The company sought formal approval for Infantile Spasms from the Food and Drug Administration, but it issued a 'non-approvable' letter in May. The agency did not think the existing clinical trials were good enough, Cartt said, adding that the firm is exploring what kind of tests the FDA will need.

Even without formal FDA approval, Acthar remains the drug of choice for babies with Infantile Spasms. It is the most likely drug to end the seizures, which, if not stopped, make the chances of normal development remote at best.

Acthar is also one of several drugs that helps with sudden flare-ups in multiple sclerosis patients, though its use is small.

Actually, the evidence supporting the use of ACTH in infantile spasms is weak, to be charitable. The latest Cochrane Collaboration review of infantile spasms found no strong evidence supporting the use of ACTH. [Hancock E, Osborne J. Treatment of infantile spasms. Cochrane Database of Systematic Reviews 2002, Issue 2. Art. No.: CD001770. DOI: 10.1002/14651858.CD001770.] There is similarly little evidence supporting its use in childhood epilepsy. [Gayatri NA, Ferrie CD, Cross H. Corticosteroids including ACTH for childhood epilepsy other than epileptic spasms. Cochrane Database of Systematic Reviews 2007, Issue 1. Art. No.: CD005222. DOI: 10.1002/14651858.CD005222.pub2.]

There has been opposition to the new pricing of Acthar.

'It's an obscene increase. I could almost see doubling or tripling the price but [14] times seems ridiculous,' said Sarah Erush, clinical manager of pharmacy at the Children's Hospital of Philadelphia.

Acthar is 'one of the most expensive drugs on the market,' said Frank Lichtenberg, a business professor at Columbia University. 'This raises the question: Are the clinical benefits commensurate with that extremely high cost? The burden will be on the company to demonstrate this will extend life, it will improve quality of life, and it will reduce other medical expenditures.'
However, the Inquirer story noted some economists attempts at apologia.

Prescription drugs are 'a legal monopoly. We expect monopolists to behave like monopolists,' said Mark V. Pauly, a health economist at the Wharton School. "The argument is the higher profits will stimulate further beneficial research."

Experts say it is not uncommon for new drugs, especially for those that treat rare diseases, to cost more than $100,000 a year. The high price is needed, economists say, so the firm can be encouraged to enter the field.

Several economists said the firm, whose shares closed at 75 cents yesterday, up 12 cents on the American Stock Exchange, needs to find a balance on price. 'From the company's point of view, if the company charged too high a price, nobody would buy it,' said William Comanor, director of the UCLA program on Pharmaceutical Economics and Policy. 'And if they charge too low a price, they'd be leaving a lot of money on the table.'

And as often seems to happen in these cases, health insurers and managed care organizations, which seem to be pretty good at restricting what physicians charge for such services as deciding whether Acthar would be a good or bad option for a particular patient, do not seem put off by its new high price.

[Questcor Executive Vice President for Corporate Development Steve] Cartt said. 'We're seeing greater than 90 percent insurance coverage at the new pricing,' he said. Some state Medicaid programs have balked, he said, but big insurers, such as WellPoint Inc., United HealthCare and Kaiser Permanente, are covering it.

Darryl Richard, a United HealthCare spokesman, confirmed that the insurer is covering Acthar at the higher cost. But he said the insurer was requiring a new pre-authorization process to make sure the drug is used only when necessary.

I wonder how they will do that, given the state of the evidence, or lack thereof, about this drug?

This case illustrates again how pricing of health care goods and services, particularly drugs, seems unrelated to their costs of production, and to their value to patients. Furthermore, it demonstrates that insurers and managed care organizations do not seem adept at putting pressure even on the most extreme prices, despite their claims to, for example, "make health care more affordable," made by UnitedHealth. Yet they seem very good at cutting prices paid to physicians, particularly for "cognitive services," such as deciding whether or not a patient might need an expensive drug. It's your dysfunctional health care system at work.

ADDENDUM (15 October, 2007) - See this post on Brass and Ivory questioning Questcor's financial justification for this pricing decision.


JSmith5780 said...

My son had infantile spasms and I have blogged often on this topic. I have never seen either of the studies you mentioned (and didn't look at them just now-sorry, time crunch). But the problem is, too many neuros won't take the time to look for alternative treatments. And in a way I can't blame them. I am not sure if you are intimately familiar with infantile spasms. You can NOT waste time starting treatment, and starting what is hopefully the RIGHT treatment. This is why ACTH gets shoved at so many kids...without knowledge that it may NOT be the most suitable drug and many times without waiting for insurance approval. This is concerning because if there is a more appropriate drug it should be used and at the new pricing increase for ACTH, no family can suck up the cost.

The absolutely worst part about infantile spasms is that there is no "guaranteed" treatment. The kids that present with IS all respond to each and every medication so differently. Even when parents first appear on our online support group we tell them "welcome to the game of trial and error". Therefore, most neuros, even if science shows it ACTH may not be the best approach will try it at some point, regardless of testing results, "just in case" it will work, because we parents get desperate and PLEAD witht he neuros to do anything, try anything, to make our babies life even the slight bit better. Until you have watched your child have hundreds of seizures a day, you can't imagine the desperation. This is what is so despicable about Questcor's price increase. They know they have the parents by the short hairs, and that we will do ANYTHING, even go into hock, on the off chance their baby will get better.

If I were a cold hearted business person I may even have applauded their move, but unfortunately, I am the mom of a child with infantile spasms who will never, for the rest of her life, forget what IS did. And I will continue to speak out against Questcor and their despicable business practices. Thank you for posting this and helping our fight against Questcor!!
http:/ (posts occured in Sept and early Oct)

Nathan Charlan said...

"Actually, the evidence supporting the use of ACTH in infantile spasms is weak, to be charitable. The latest Cochrane Collaboration review of infantile spasms found no strong evidence supporting the use of ACTH."

You can quote all the medical journals that refute the evidence of ACTH you'd like. Until you see the drug work firsthand, it wouldn't mean anything to you or anyone in the 'drug community' anyway.

My son was having 6-7 spasm/seizure episodes a day for a month. Six days after the ACTH treatment, the spasms/seizures stopped. That's really all I care about. No journal quoting 'weak evidence' matters. I saw it at work - I saw the 'strong evidence' firsthand. IT WORKS!

Writing that line and the one about, "I wonder how they will do that, given the state of the evidence, or lack thereof, about this drug?" - It's as if you're agreeing that it's no big deal - there's hardly evidence that the drug works for infantile spasms. Please! The head of the hospital's neurology department told me this has been their gold standard for years and it works. There must be SOME kind of evidence for the neurologists to use this over and over again to treat infantile spasms. How about quoting those?

It worked for my son. No 'weak evidence' journal or article changes that or ever will. There is huge value to the patients that ACTH serves.

Anonymous said...

I agree whole heartedly! I have a 9 month old little girl and she was born with a stroke which caused her IS.. Her first Neuro tried three different meds and GAVE UP on her... when we took her to the hospital in Memphis TN the first thing she said was ACTH... and with in 24 hours it stopped the seizures.. my angel was having hundred and hundreds of seizures daily.. and nothing could be done... She is paralyzed on her left side.. cant move it..
Just think where all these little angels like mine would be with out the MIRACLE of the ACTH...

ACTH is what saved my little girl.. She is also living PROOF that this medicine works for IS

Unknown said...

My son is taking Vigabatrin/Sabril twice a day. His seizures stopped the following 24 hours after the first two dosages. This medication I believe is not available in US due to the possible loss of peripheral vision. I had my son checked in SickKids of Toronto and they are one of the best pediatric hospital in North America, the service is excellent.
If it happens that the Vigabatrin would fail on my son, they would switch to ACTH. They informed me about the side effects of both medications. Why can't they allow Vigabatrin/Sabril in US if it has less intense side effects. I understand the possible loss of peripheral vision but the majority cases lose 30% of their vision after 1-2 years of treatment. It is likely 10% of the IS patients may suffer of this side effect.