Catalyst Pharma to join parade of huge price hikes on old, cheap drugs

Yet another drugmaker is taking a cheap drug and turning it into an FDA-approved brand--and adding an enormous premium along the way. Once again, the cost increase promises to be huge, The Street reports: Analysts figure on a list price of $60,000 to $80,000 per year.

The company is Catalyst Pharmaceutical Partners ($CPRX), and it's set to apply for FDA approval of Firdapse, a treatment for Lambert-Eaton myasthenic syndrome (LEMS), in early 2015. The drug's active ingredient, 3,4-Dap has been on the market for more than 20 years, available not only from compounding pharmacies, but from Jacobus Pharmaceuticals, which gives it away for free, The Street says.

BioMarin Pharmaceuticals ($BMRN) markets Firdapse in Europe, but hasn't been very successful with it. Catalyst snapped up U.S. rights, took over a clinical trial that was already underway, and early this week, trumpeted its success with that trial. When and if Firdapse rolls out, it will be a treatment for a rare disease, with 7 years of exclusivity, The Street notes. While $80,000 isn't so high compared with other rare disease meds, the companies that sell those meds spent years and many millions of dollars to research and develop them.

The thing about the Firdapse situation--and others like it, including KV Pharmaceuticals and its preterm labor drug Makena, URL Pharma and its gout drug Colcrys, or Rare Disease Therapeutics and its scorpion antivenom Anascorp--is that the FDA is not only enabling it, but encouraging it.

In 2006, the agency launched its Unapproved Drugs initiative to reward companies for testing treatments that had been on the market for years, but had never been subjected to rigorous trials. Some drugmakers jumped at the chance; they had to test the drugs, but because the treatments were already widely used, the risk of those trials was minimal. And that's how Makena and Colcrys and Anascorp went from cheap to cha-ching.

The FDA's intentions were good: Get unapproved drugs off the market, to protect patients from potential harm. But with no authority over pricing, the program put patients and payers' pocketbooks at risk instead.

Catalyst could find itself thwarted along the way to slapping a high price on Firdapse. Jacobus is scrambling to get its 3,4-Dap drug in to the FDA. Whether it will beat Catalyst remains to be seen. How might Jacobus price its version? That remains to be seen as well.

What's certain is that Catalyst appears ready to use hardball tactics, just as KV and others did when launching their brands. KV put the squeeze on compounding pharmacies, threatening FDA action if they continued to sell their versions of Makena. Catalyst is apparently targeting patients directly. According to The Street, the company's lawyers have been contacting LEMS patients, claiming they need to be deposed in a shareholder lawsuit against the company.

Meanwhile, Retrophin has taken the old-drug-huge-price idea into different territory. The company bought an approved drug sold by a Texas company at $1.50 per pill and hiked the price to $30 each, pushing monthly costs for typical patients to $1,800 to $2,700, from about $135. In this case, the drug, Thiola, didn't have to go through new trials--low risk or not--to earn its new price.

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