How a Drug Went From $50 to $28,000 a Vial: A sharp price rise sent a drug maker’s stock soaring, but it led to questions about the drug’s relative effectiveness
THE doctor was dumbfounded: a drug that used to cost $50 was now selling for $28,000 for a 5-milliliter vial.
The physician, Dr. Ladislas Lazaro IV, remembered occasionally prescribing this anti-inflammatory, named H.P. Acthar Gel, for gout back in the early 1990s. Then the drug seemed to fade from view. Dr. Lazaro had all but forgotten about it, until a sales representative from a company called Questcor Pharmaceuticals appeared at his office and suggested that he try it for various rheumatologic conditions.
“I’ve never seen anything like this,” Dr. Lazaro, a rheumatologist in Lafayette, La., says of the price increase.
How the price of this drug rose so far, so fast is a story for these troubled times in American health care — a tale of aggressive marketing, questionable medicine and, not least, out-of-control costs. At the center of it is Questcor, which turned the once-obscure Acthar into a hugely profitable wonder drug and itself into one of Wall Street’s highest fliers.
Scorpion antivenin sold in Mexico for $100/vial has been billed for as much as $39,652 per vial in the United States.
Part of the cost hike is getting it past regulatory issues for the FDA; the cost goes from $100/vial (Mexico) to $3500/vial (cost to distributor) to hospitals ($3780/vial). Hospitals then mark it up to whatever they think people should pay for it.
Interestingly, it used to be free; it was made at Arizona State University, using volunteer labor. Because it was given away for free, there was diminished liability; because it was made inside Arizona and never distributed outside the state (the culprit scorpion is found only in Arizona and Mexico), there was no regulatory oversight from the feds: no FDA licensure required.