Mallinckrodt's pain med Ofirmev gets scrutiny in Senate—but this pricing probe has a twist

Sen. Claire McCaskill wrote Mallinckrodt for information on its pricing for painkiller Ofirmev.

Mallinckrodt critics usually zero in on its expensive H.P. Acthar Gel and years of price hikes, but that doesn’t mean controversy doesn’t lurk elsewhere in its portfolio. Ofirmev, for example, an injectable form of acetaminophen used by hospitals, is the latest investigative target of Sen. Claire McCaskill, D-Mo.

This time, however, the investigation isn’t so cut-and-dried. In a letter (PDF) to CEO Mark Trudeau, McCaskill makes the usual demands for information about pricing and revenue numbers. But she also suggests that Ofirmev, expensive as it may be, could actually be saving hospitals money on opioid complications—and cites documents from Mallinckrodt to that effect.

Her letter, in short, implies that Mallinckrodt, based in McCaskill’s home state of Missouri, may be the good guy in this scenario, if her fact-finding mission proves the company’s case.

Mallinckrodt more than doubled the price of Ofirmev in 2014, just three months after shelling out $1.3 billion to buy its maker, Cadence Pharmaceuticals. It was the sort of buy-and-hike scenario that Valeant Pharmaceuticals perfected as a business model—and the sort of hike that Questcor, which owned Acthar before Mallinckrodt bought it, made repeatedly.

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The Ofirmev hike set off a wave of budget crunches in hospitals across the country, with big-name institutions such as Johns Hopkins and Mayo Clinic among those complaining about $1 million-plus spending increases, the letter states.

Mallinckrodt, however, says the price increase was “necessary” to fund other research on the drug—and to reverse a sheer lack of cash flow at Cadence before it bought the company. Since the acquisition, the company says, it has run more than half a dozen retrospective studies delving into Ofirmev’s health economics and outcomes “to provide additional insight for clinicians, pharmacists and hospital administrators on the value” of the drug.

Some hospitals yanked Ofirmev from their formularies after the price went up; McCaskill cites a Missouri-based example, BJC Healthcare. Some simply picked up alternatives, such as oral acetaminophen, the generic form of Tylenol. Others just dug deeper in their budgets to cover the cost of the drug. The net effect of the price hike, though, was to reduce the number of Ofirmev scripts, and that number continues to run below levels seen in early 2014, the letter states. (Mallinckrodt itself says sales have recovered.)

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In the price-hike narrative of the last few years, that’s hubris receiving its due. But McCaskill, who recently launched an investigation into the top makers of opioid painkillers, sees another story. Citing Mallinckrodt’s marketing position—that Ofirmev is a valid opioid alternative, with supporting data to that effect—the senator writes, “Any obstacle to prescribing non-opioid alternatives, even those used solely in a hospital setting, is cause for concern.”

For a briefing earlier this month, Mallinckrodt handed over some numbers that suggest Ofirmev can be a money saver by cutting complications and hospital stays, McCaskill writes. In a statement after McCaskill’s letter went public, the company quotes those numbers, maintaining that focusing on the cheap upfront price of opioids is wrongheaded.

“One recent analysis of health economic data on the use of Ofirmev coupled with a one-level reduction in opioid use was linked to decreasing hospital stays, potential opioid-related complications and related costs for the treatment of acute surgical pain,” the company said in a statement. “The study showed a potential of $4.7 million in annual savings for a typical, medium-sized hospital.”

McCaskill, who received $2,500 in campaign financing from Mallinckrodt during the 2016 election cycle, is demanding a range of information and documents to get at the are-they-or-aren’t-they question about Mallinckrodt: Valeant-style buy-and-hike price gouging that’s hurting patients and hospitals, or effective alternative to dangerous opioids that should be used more, not less.

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The senator requests “journal articles or other research” that would show Ofirmev to be an effective alternative to opioid painkillers. She’s asking for numbers on hospitals that have participated in an Ofirmev demonstration program—“Prove it Out,” one of the company’s marketing efforts—and whether they’ve continued using the drug after the demo. The latter presumably would answer the question of how useful hospitals found Ofirmev to be.

She’s also asking for unit sales and revenue for Ofirmev in Missouri hospitals, from 2011—before Mallinckrodt bought the company—to the present.

McCaskill says she wants to get to the economics behind opioid use and potential overuse, a part of the equation that’s not often explored. Other opioid alternatives are also pricey, including Exparel, a Pacira Pharmaceuticals drug used as an opioid substitute for surgical patients. It’s $300 per dose, and as some hospital doctors point out, opioids are lots cheaper. Ofirmev runs $35 per dose, with four the typical regimen, according to the best-practices firm Advisory Board. Vicodin is $5 per prescription.