|Courtesy of Questcor|
Since Ireland's Mallinckrodt ($MNK) agreed in April to acquire the California-based biotech Questcor ($QCOR), questions have been flying about the major asset behind that deal: Acthar Gel.
Now some medical experts suggest Medicare is paying way too much for Acthar. According to prescribing data acquired by the investigative news organization ProPublica, Medicare's spending on Acthar jumped twentyfold between 2008 and 2012, to $141.5 million--and a likely $220 million last year.
Medicare comprised about a quarter of Acthar sales in 2012, according to ProPublica, which co-published its story with The New York Times. Approved to treat 19 inflammatory conditions, the drug brought in $761 million in total sales last year.
The Medicare questions follow allegations that Questcor left side effects unreported and promoted Acthar for off-label use. Among the other new questions--which relate directly to Medicare overspending--are financial ties between Questcor and Medicare's top Acthar prescribers.
Acthar, a hormone-based drug derived from pig pituitary glands, has been on the market since 1952 but didn't become a concern for Medicare until after Questcor bought the product in 2001 and began widening the menu of disorders the product could purportedly treat. The price started at about $40 per vial back then but grew steadily until 2007, when the company jacked the price up to $23,000 per vial. In 2012, the Medicare Part D drug program paid an average of $41,763 per prescription, according to ProPublica.
That's a hefty price tag for a drug that some doctors say hasn't been proven to be all that effective. Acthar is often prescribed to older people to treat rare kidney diseases and relapses of multiple sclerosis. But Lily Jung Henson, medical director of neurology at Swedish Medical Center's Ballard campus in Seattle, told ProPublica she thinks Medicare should push for more studies to determine if the product actually works in those patients. "I can't afford to waste their money by giving them a drug that I can't convince myself has been effective," she said.
The news organization reported that the top 15 prescribers of Acthar accounted for 10% of Medicare prescriptions, and that the top four were paid by Questcor to be promotional speakers and/or researchers. William Shaffer, a Colorado neurologist and himself an MS patient, was the most prolific Acthar prescriber in 2012, dashing off 78 scripts that cost Medicare more than $4 million, according to ProPublica. Shaffer also gave promotional talks for Questcor.
This is the latest in a series of criticisms to be hurled at Questcor. In July, shortly after the NYT uncovered 20 deaths and 6 disabilities associated with Acthar since 2012, Questcor disclosed in an SEC filing that the drug actually prompted 1,022 patients to report 3,100 adverse events between January 2011 and December 2013. Earlier this year, Questcor short seller Citron claimed Acthar doesn't include all the active ingredients its label says it does, causing shares to plummet 8%. Questcor has acknowledged that it's under investigation by the SEC and by U.S. attorneys in New York and Pennsylvania.
- here's the ProPublica/NYT story (sub. req.)