H.P. Acthar Gel - Questcor/Mallinckrodt

Cost: $205,681 per U.S. patient per year

This treatment to help people with multiple sclerosis walk better is a prime example of pharma companies' ability to extract top dollar from the U.S. payment system. In less than 15 years, its price has been jacked up more than 1,000 times, even as questions about whether it is very effective have also mounted.

Acthar, a hormone-based drug derived from pig pituitary glands, was developed in the 1950s by a division of Armour & Company. When Questcor bought rights to the drug in 2001 from Sanofi Aventis, it ran about $40 per vial. In 2007, its price was up to $23,000 per vial. Two years later, the drug was costing Medicare Part D an average of $41,763 per prescription, according to recent reports by the ProPublica investigative journalism group, and is now one of the top 5 most expensive drugs in the world at more than $205,000 a year, up 9% from the year before.

In 2010, Questcor won approval for its use in infantile spasms, as well as a coveted orphan drug designation, and last year generated about $760 million in sales, up 50%. But some doctors believe more studies are needed to prove that its effectiveness justifies that kind of price.

This price explosion has attracted attention. In 2012, federal authorities launched an investigation into the company's marketing of the product, and in the last year it has garnered significant media attention as short sellers have been crying foul about Questcor. Soon after the New York Times reported that since 2012, the drug had been tied to 20 deaths and half a dozen disabilities, the company reported to the SEC that 3,100 adverse events had been reported for the drug in the three years ending in December 2013. If something happens to undercut its price, it is Mallinckrodt ($MNK) that will suffer. The Ireland-based company closed its $5.8 billion deal for Questcor in August.

For more:
Is Medicare wasting $220M a year on Questcor's controversial Acthar?
Questcor comes clean on adverse effects of beleaguered drug Acthar
Mallinckrodt bets $5.6B on Questcor and its controversial Acthar drug

-- Eric Palmer (email | Twitter)

H.P. Acthar Gel - Questcor/Mallinckrodt