The latest example of runaway drug pricing has pitted the industrial town of Rockford, Ill., against specialty drug manufacturer Mallinckrodt Pharmaceuticals, which runs its U.S. business from Hazelwood. Rockford, with fewer than 150,000 residents, accuses Mallinckrodt of price gouging and another local company, Express Scripts, of failing to fairly negotiate drug prices.
No matter what justification drug companies offer for their outlandish pricing structures, there’s no escaping the higher priority they place on profits over saving lives and easing human suffering.
Rockford sued both companies last year after finding it paid nearly $500,000 in 2015 for drugs to treat two babies with infantile spasms, a rare disorder. City authorities discovered they were paying about $40,000 a dose for medication that cost $40 in 2001. Rockford pays for health care for about 1,000 employees and dependents.
Mallinckrodt says that it modestly raised the price of the drug, H.P. Acthar, since acquiring it in 2014 when it bought Questcor Pharmaceuticals for $5.6 billion. Questcor was criticized for raising the price to more than $28,000 a vial over a decade.
Like companies accused earlier of price gouging for EpiPens, anti-parasite pills and medication to treat life-threatening cases of lead poisoning, Mallinckrodt has monopoly control of Acthar. That allows the company to wildly inflate the price for a drug that others can’t provide and only the super-rich can afford.
Pharmaceutical price gouging is out of control, but Congress has refused to intervene with even modest pricing regulations.
President Donald Trump has flip-flopped on the issue. He promised during his campaign to call on Congress to allow Medicare to use its substantial power in the marketplace to negotiate lower drug prices. Now he is backing off. Medicare must be granted authority to protect American taxpayers by striking deals with drugmakers.
Mallinckrodt has been in trouble over Acthar before. It agreed to pay $100 million and reduce its monopoly control of the medication to settle a Federal Trade Commission antitrust violation charge in January.
Acthar, derived from the pituitary glands of slaughtered pigs, was developed in 1952. It is classified as an “orphan drug,” for use in diseases affecting fewer than 200,000 people. Developed to treat the rare disease of infantile spasms, it was approved under looser standards for other conditions. Mallinckrodt exploited that potential, dramatically expanding the market among seniors.
Medicare spent over half a billion dollars on Acthar in 2015, although critics say cheaper alternatives exist for older adults. Express Scripts is the pharmacy benefit manager that negotiated prices for Rockford. The city contends Express Scripts didn’t negotiate downward for Rockford because it was under contract as the exclusive distributor of Acthar.
Former Rockford Mayor Larry Morrissey says health care is so expensive “because the fix is in.” Congress and Trump need to find a cure for that.
This was written by the editorial staff of the St. Louis Post-iDpsatch. It does not necessarily reflect the opinion of the The Lima News editorial board or AIM Media, owner of The Lima News.