The Obscure Drug With a Growing Medicare Tab

Experts question the effectiveness of H.P. Acthar Gel, a drug made from pigs’ pituitary glands. Yet it cost Medicare more than $141 million in 2012, up from $7 million in 2008.

Comments: 60

  1. This problem really goes back to the prohibition against medicare negotiating prices that Mr. Bush, and his pharmaceutical industry task masters inserted into the law. Change that, and it goes a long way to solve for this kind of predatory pricing.

  2. For some time now, the stretch of a dollar has been a major challenge to individuals, governments, and organizations worldwide. In this specific case, it is being explained how the Medicare tab is being run up with a costly drug that patients are demanding. No sufficient evidence exists, however, to support that this obscure drug works more effectively than its cheaper counterparts. Medicare, though, cannot bar access to Acthar because a policy exists that states that drugs approved by the FDA must be provided upon request. A quarter of Acthar sales are to Medicare, prompting the argument that an alternative to Acthar should be found if its effectiveness has yet to be proven and its cost is hefty. Taxpayers do not need to be funding the money for citizens to receive overpriced medications that may not be working. Some may claim that this argument is petty due to the fact that other drugs supplied through Medicare cost even more than Acthar; however, the issue lies more so in the fact that its effectiveness has not been proven. Additionally, suspicions regarding fair industry practices have arisen, supported by facts such prescribers getting paid additional money to serve as speakers and the top 15 prescribers accounting for more than 10% of medicare prescriptions. Steps have been taken by insurers to restrict Acthar access. Now, the opportunity exists for Medicare and FDA to reevaluate this medication that is troubling the funds and perhaps the health of people nationwide.

  3. The government needs to be given the responsibility of negotiating drug prices on behalf of its citizens. Medicaid and the Department of Veterans Affairs does, for good reason. It saves money consumer and taxpayer money. We cannot rely on private insurers to do this for Medicare enrollees. According to USA Today, Part D carries an 80 billion dollar price tag and is anticipated to double by 2022 if all remains the same.

    It's time to change the way the game is being played, as the deck is stacked against patients and taxpayers.

  4. Nothing short of government directly controlling all drug and medical costs will satisfy the progressives. Its that simple. In doing so, they will block off any new drug or procedure that costs more then its ration share.

  5. With the exception of drugs to cure cancer, we already have all the medicines we need. Instead of becoming a walking pill box, most patients would be far better off consuming fewer, not more, drugs. And for those individuals with very rare diseases, I wouldn't hold my breath because the money can be better spent elsewhere.

  6. So, do you propose we bankrupt the country via the Republican written part D?

  7. I doubt that I am the first person to notice that every time a medical professional or medical equipment manufacturer finds a vulnerability in the Medicare or Medicaid billing and reimbursement system, all of the bottom-feeders immediately latch on to the opportunity and bill, bill, bill, bill until Medicare and Medicaid (hopefully) close up the loophole. Then they move on to the next opportunity. This has been going on for a long time. It seems like there would be an easy fix, but every one of those fraudsters has a Congressman and can hire a lobbying firm, so the game goes on and on and on.

  8. A component of Medicare less spoken of is the role the patient can (and should) play in their own care. I have been offered meds and services through Medicare that are wildly extravagant. I have refused home visits, non-generic meds and the services of equipment vendors who would love to replace my breathing aids every 6 months whether they need replacing or not. I see my benefits and Medicare as both a privilege and a luxury and so I have chosen to be more economically proactive in my own care. This was a choice and if more Medicare patients took a more active and prudent role in their own care then the system might have a far better chance to outlive us.

  9. "I personally think over time, the program is going to face more demands by Congress and the public to intervene, or at least use moral persuasion, to challenge or counter-pricing strategies that don’t serve the best interests of the program,” he said.

    Two points. First, expecting Congress to use "moral persuasion" is about as likely as asking an NFL linebacker to use it. Second, I thought that in the end, Medicare is supposed to "server the best interests" of the PATIENTS.

  10. It might be worth investigating whether a synthetic version of this drug "made from pigs’ pituitary glands" could be provided more cheaply.

  11. I can't imagine that pig pituitary glands are rare!!

  12. Just more evidence that the 1% makes their money the old-fashioned way: they steal it from the rest of us. It's way past time to stop these blatant abuses of taxpayers and consumers. But I wouldn't be the least bit surprised if the patients taking these exorbitantly priced drugs are also in on the scam.

  13. Why not? This drug will be plastered on TV, and magazines, as the next wonder drug. The drug companies have o plan on paying for advertising so they can do the annoying :ask Your Doctor" ads. Each time those ad run, it costs people more in prescription costs.

    For example, Viagra is about to go off patent, so Pfizer is running Viagra ads to no end to get as much exposure as possible, before the patent runs out. Meanwhile, Lily, is running Cilalis ads to counter the Viagra ads. All this costing the consumer.

    Drug companies say high costs, in the US, is because of research. Yet, one cannot watch any commercial TV, or cable station, without being subjected to one "Ask Your Doctor" ad after another. This brings us to Medicare, Medicaid and Va Health care, which also have to foot the extra costs for so called "research" which in actuality are revenue producers for the media industry; including this newspaper.

    One of the reasons why health care costs are high in this country is because of "Ask You Doctor" ads. These type of ads just do not exist outside the US. Unfortunately, so called "heath care reform" did not address this issue, among others, to lower costs to the citizen. All the ACA is is a gift to insurance companies, drug companies, for profit medical centers and physicians (They get a "cut" for prescribing drugs advertised).

    It is no wonder why Medicare is heading to future deficits. and why heath care costs continue to rise well beyond inflation. One word: Greed.

  14. I'm going to partly agree with you, on the most critical point. The ads increase the cost of "health care costs" as you put it, but not because they drive up the cost of an individual drug. The successful ads pay for themselves (as with any other industry) by increasing utilization of the product, and that's the problem. For so many marketed drugs, there is a cheaper generic alternative that works just as well, and should be tried by the clinician first. The overall increase in healthcare costs could and should be slashed by clinicians who follow guidelines for treatment which almost always start with older, established, and cheaper regimens. The ones not advertised.

  15. Why do these sociopathic pharmaceutical companies get away with this? Because we let them. "In line with the industry best practices". That's like picking an unlit alley for the mugger's favorite work locale. We need more push back. Single payer health care with evidence based analysis of product claims and alternatives would help. Then if the product is an truly an advance, pricing negoitation.

  16. "My patient said they felt better" does not constitute evidence. Come on guys. Scientific method!

    There are no drugs for Multiple Sclerosis for which there is any proven benefit in reducing the progression of disability. Yet we spend 20 billion dollars a year on MS treatments, most of that on drugs. Acthar Gel is just one of them. MS is a huge cash cow for the pharmaceutical industry. If we negotiated prices based on proven effectiveness, and if we required independent testing of effectiveness we could save staggering amounts of money - which are then available to spend on treatments like the new Hepatitis drug that is actually useful. Or on real research into the causes of MS, not this pharmaceutical industry futzing around with random substances and small, noisy, biased studies.

  17. You are wrong. There are several MS therapies proven to limit disease progression, including Betaseron, Avonex, Copaxone, Rebif, and Tecfidera.

  18. Agree. We'd all feel better with a nice steroid buzz. Got some projects around the house you've been avoiding? Garage is in such chaos you can't park your care inside? Acthar will fix what ails you. Nothing like the well being of hypomania to charge through your week.

  19. Those drugs work sometimes. BETTER then than nothing. But ACTH is not a proven drug, it is only another initiator of steroid activity.What will make a difference is retraining the immune system. THE THEORY IS GOOD. Now it's time to develop the treatments. Expect the fastest progress to come from other countries.

  20. "But Medicare has imposed no limits, leaving such decisions to the private insurers paid to administer its drug program on the government's behalf"
    The definition of plausible deniability

  21. Yet another example, not of the free market, but the rigged market.

    Doesn't the UK have a commission that looks at the cost benefit analysis of drugs before the NHS will cover them? And, aren't prices for the same meds much less in the UK than here? We need that kind of commission here.
    Or, nationalize the production of medications. We already pay for who knows how much of the basic research that produces them via government research grants.

    And, the doctors who take money from drug companies should be required to give written notification to every patient/customer detailing the how much and for what they receive that money from drug companies for anything.
    When politicians take bribes and kickbacks, it's illegal. I don't know why the same laws don't apply to physicians.

  22. The greedy people who run these drug companies are disgusting.

  23. There is so much corruption in every facet of everything. Those who are screaming that Medicare costs too much should start doing something to screen out Medicare theft. It's so depressing living in America any more. There is no one steering our country any more, except into the ground.

  24. No mention whatsoever of why such an old drug is so expensive. Are pig pituary glands hard to come by?

  25. ACTH is $20 per dose in Europe and the Middle East as a generic formulation. There is no evidence that the US version is more effective, however, the US sponsor has helped block generic release in the US, noting that the "dirty" animal derivative in the US cannot be precisely emulated.

  26. They harvest only the ones who can fly.

  27. Every ham is accompanied by one. This is like a perfect storm of greed and obfuscation. At its heart, the manufacture of Acthar apparently occurs by partial purification of ACTH from porcine pituitary gland by a "secret" process. Whatever patents were filed have long since expired, so why haven't generic versions entered the market for such a profitable drug? The answer is that no clinical trials were ever done on Acthar in the 65 years its been on the market (!), and thus no company offering a generic can ever possibly demonstrate "substantial equivalence". It's almost unassailably grandfathered!! "liquid gold" made from pig guts indeed.

  28. Prescribing will continue of expensive drugs that are ineffective or no more effective than cheaper drugs as long as there is no real competition in the brand drug industry. Today, we have little price competition because consumers are insured and only pay a small portion of the price. Doctors are not financially responsible for the drugs they prescribe. And brand drug manufacturers are protected from competition by patents, so they can charge any amount they can get insurance to pay.

    Eliminating insurance for drugs would probably solve the pricing problem because most people could not pay the high prices and manufacturers would have to greatly reduce prices.

    Or we could eliminate patents for drugs. Basic research to discover new approaches or new drugs would be contracted out to universities, government labs, and private research organizations, which do most basic research today. Clinical drug trials would be contracted out to private (independent) research organizations, which would not have a vested interest in the outcome. Drug manufacturers would become production and marketing companies, much like manufacturers of generic drugs today. Prices would likely be much lower. Some problems would still have to be solved, such as how to get drugs produced for very small markets (i.e., when few patients would benefit).

  29. When I read these stories, I realize that the health care system is designed to work this way. The government pays the elevated prices for drugs, which directly profits the companies that sell them. This system was created by both political parties, which is why it is so hard to change.
    When people try to reign in this system, they are viciously attacked. When democrats attack it, republicans accuse them of being anti-business. When republicans attack it, democrats accuse them of being anti-patients.
    The only certain way to remove the government over-payment of drugs is to stop the government from paying for them.

  30. So now we know, beyond doubt, how pharmaceutical makers will maintain or even increase their profits. I fear the phenomenon is even wide than we think. I recently bought a 4.25 oz tube or surgical lubricant that jumped in price from $4.75 (including tax) to $6.98 (also including tax) in less than two months. Price gouging has become the profit-assuring strategy of choice for our beleaguered pharma corporations ... er, people.

  31. The Veterans Administration is the only federal agency allowed to have pharmaceuticals bid on for lowest cost. If the best price is for higher dosages veterans are instructed to split the pills. I realize Medicare drugs are dispensed by drug retailers and hospitals throughout the country but there must be a way for the most prescribed drugs be price controlled. Looking at the list of most prescribed medications for older citizens that I assume Medicare enrollees would use most have generic versions. I don't know this for sure but I am assuming physicians write scripts for brand medications. Can Medicare instruct that only generic medications if available be prescribed?

  32. It is noteworthy that those who are so fiercely opposed to government intervention in the marketplace are completely comfortable with letting the foxes live in and run the henhouse. How else to explain Congress' intransigence in enabling Medicare/Medicaid negotiate fairer, more reasonable drug prices.

    Oops, forgot. Big pharma is one of the leading lobbying industries on Capitol Hill.

  33. How is this a surprise to anyone?

    We live in a wildly corrupt society that worships money, and big city doctors seem to have a very strong sense of entitlement where, if they can't make a lot of money by practicing, make up the shortfall by being Big Pharma's agents on commission.

    Meanwhile, the Republicans continue to savage the budgets of the FDA and FTC, making sure these practices not only continue, but expand.

  34. The problem is we need to adopt evidence based practice, like the rest of the developed nations. All drugs must be subjected to randomized studies with control and treatment groups. Drugs that do not perform should not be subsidized. If patients want them, fine, but they should pay for them out of pocket. Medicare should also be allowed to negotiate the price of drugs. The government is a large purchaser and the ability to negotiate would have a profound effect on drug pricing. Medicare Part D is unsustainable in its present form and should be seen for what it is, a giveaway to the pharmaceutical industry, and buying the votes of the elderly by Republicans.

  35. We tried to adopt evidence-based practice, but it was widely denounced as "death panels," socialized medicine and allowing decisions to be made between doctors and patients and keeping the government out of the examining room. Which party was that again?

  36. From Mr. Nocera's column of July 18th “The $300,000 Drug:”

    “When I asked Werth how Vertex could charge $300,000, he had a much simpler answer: “Because they can.””

    I take two generics: One for HBP, the other for cholesterol. In the ten+ years I've been taking these, they have tripled in cost based on the copay charged and confirmed by benefit statements with outlandishly touted savings. Both are made in Asia with next to no labor cost and zero cost for additional R&D. One might even wonder if there’s any cost for quality control. But yet the increase, Why? A rhetorical question of course, we know why: profit.

  37. My own MD takes drugs for HPB and high cholesterol and buys the from Canada. Cheaper than buying them through Medicare with Plan D.

  38. i'm still waiting for a reply from a drug manufacturer to a letter i wrote inquiring why the price of a monthly prescription i've been paying $63 for suddenly jumped to $180.
    it's all about the money and the offshore bank accounts of the doctors and company executives... too bad for the patients who have to pay the bills.

  39. No problem, just put it on the grandkids tab, with the rest of the $862 billion projected cost of Part D over the next decade. Medicare Part D, another generational transfer from old to young from the W Bush Administration was unfunded and simply added to the Deficit. And with the inability to negotiate or exclude expensive drugs without proven benefit over less costly alternatives, that figure is probably too low. We recently learned in the NYT that ophthalmologists treat multiple patients for MD with a single vial of a $2,000 drug when a $50 vial of Avastin works as well. Then Medicare is charged $2,000 per patient.

    Part D premiums will also soar because Medicare was left with no leverage by this legislative gift to the drug industry.

    Maybe someday we'll get to rewrite this legislation without legislators on the Big Pharma payroll, but trillions are likely to go on the tab in the meantime.

  40. Sufferers of multiple sclerosis can be forgiven for seeking out an expensive drug with anecdotal effectiveness and a promise of fewer side effects.

    Drug companies are simply exploiting two basic human weaknesses: our universal susceptibility to marketing and our magical thinking about medications and supplements. One would think medical professionals--as scientists--would be immune to both of these weaknesses, but they (we) are not.

  41. There is a much better treatment for MS coming. Stem cell transplants are thought efficacious enough that some insurance is paying for it. New studies suggest that T-cells can be killed buy x-rays or antibodies. If x-ray then macrophages are introduced to produce a hormone to initiate the production of T-(reg) cells. (Macrophages survive antibody treatments). Then extracts of the tissue the T-cells were attacking are introduced so that the T-reg cells learn they are to be tolerated. T-reg cells regulate the activities of T-(killer) cells.

    However! Fasting also greatly reduces the number of circulating T-cells. So it should be possible to design a treatment based on fasting and some procedures to promote tolerance.
    Mouse studies show that this can be done. (usually 48 hours fasting)
    In the meantime, i strongly suspect that it is not latitude that influences autoimmune disease but the amount of fat in the diet. And whether or not fasting and caloric reductions are part of the culture.

  42. As a retail Pharmacist we commonly dispensed this medication up until about 6 six years ago. The Average wholesale cost for the drug at that time was about $800 per vial. The manufacturer chose to limit the distribution of the drug and call it a "Specialty Drug" and now the average wholsesale price is in excess of $20,000 per vial. Inflation could not possibly be the cause of that increase. This is a common play for the drug companies and is often very little more than an excuse to charge absurd sums for their products.

  43. The fact that a drug that may help a rare condition, has been around for a long time, was recommended for many conditions and with no proven benefits, and rising its price suddenly around 2007, suggests collusion and possibly bribery by involving physicians conflicted by the Company's favors; all of which makes it imperative to put on the brakes and investigate what is real and what not. If sensible measures are taken, the rest of us will, at least, feel that justice is being done, that a given Company is not 'pulling our leg'...and society's, by taxing our, by force, limited resources.

  44. It's about time that the government, Medicare or whoever is in charge, begins to regulate these outrageous charges imposed by the drug companies and the medical community at large. There is something wrong when the same drugs are 1/2 price or much less in Canada and we have to assume that the drug sellers in Canada are making a profit. It is really time for national health care as opposed to Obamacare which is a step in the right direction. The drug companies and so called 'non profits' are making a fortune off the backs of the American people.

  45. Drugs like this would never exist in our health care delivery system if doctors would just stop prescribing it. There was once a drug call xigris that cost over 10,000 dollars a treatment. Even the companies studies showed limited benefit with very dangerous side effects like premature death. Of course this did not stop the sales force from promoting it or doctors from prescribing it. Anyone who could read knew this drug was a joke. It took a few years and billions of lost health care dollars before it was pulled by the FDA. Wake up docs, you are bankrupting our country.

  46. I find it disturbing to see only a handful of comments to this article. Maybe it is because doctors don't bother to speak up about it. ACTH has been around since the 60s, it has been shown over and over not to be superior to steroids for exacerbation of multiple sclerosis, and to do nothing in progressive MS. I believe that the practices of pharmaceutical companies are immoral, yet prescriptions are written by physicians. To sell ourselves and our patients for either stupidity or insatiable greed, that it beyond sad

  47. It really would be worthwhile for the government to step in and fund some good studies. In my personal experience ACTH works better to stop infantile spasms than plain old steroids, but even with dozens of cases such anecdotal experience is pretty worthless. If ACTH works better for infantile spasm then there is reason to believe it might also work better than steroids for other conditions. Independent of this, we obviously need to curtail the practice of doctors have large financial stakes in the drugs they prescribe. The practice of medicine was never meant to be a gold mine, even in Colorado.

  48. A synthetic ACTH has been available in Europe for years (Synacthen) but Big Pharma has made sure that it is not available in the U.S. If the FDA had any backbone, it would make it available, but that would mean facing the budgetary wrath of Congress.
    The Times should investigate who is being paid off to block introduction of alternatives to H P Acthar Gel.

  49. From seekingalpha.com:
    "The ACTH polypeptide is made up of a 39 amino acid sequence which has been known since 1960. The problem is, however, that this is only the primary structure of the molecule. Polypeptides also have a secondary structure (which is often a helix), which is then folded into a tertiary, 3-dimensional structure. So far, no one has been able to deduce the formation of the 3-dimensional aspects of the molecule which is necessary for complementary configuration with membrane binding sites. The closest anyone has been able to come is with a synthetic form consisting of the first 24 native amino acid analogs, known as Synacthen, which are not as effective as ACTH."

  50. This is one more reason why the U.S. needs a national formulary.

  51. Fine research by Charles Ornstein and it's a fair look at the process by which Acthar is dispensed. He does give voice to proponents of the drug, but their arguments, such as that of Dr. Shaffer are weak.

    A subtext of this article is that it raises a question about a free-market approach to medicine. If the profit motive is there, we'll get questionable evaluations of the effectiveness of extremely expensive drugs for which insurance pays, and, the taxpayer in this case. Corporate earnings take an inordinate share of the motivation to market a drug.

    Politically, Republicans don't want government involvement in health care, so there is a free-market component to health care that produces questionable marketing of drugs that is difficult to check because of the political component of drug marketing. Government isn't perfect, but neither is the free market.

    In a national, single payer system, again, not perfect, there would be much more transparency into the process of determining drug pricing and effectiveness. In fact, in such a system, Charles Ornstein shouldn't have that much research work to do; the policies and processes for handling Acthar would be available, so he'd be able to trace the process much more quickly. But thank God for quality investigative journalism.

  52. Just because some pharma with deep pockets buys another company shouldn't give them carte blanche to charge whatever they feel. Time to hit them with price controls or confiscatory taxation on their unearned profits.

  53. Not to be too simplistic about it all, but let's face it, the drug and insurance companies own us. They own us financially and they own us physically. They, and only they, determine what kind of health care we get, how well it works, and what it will cost us. And many millions of Americans think that's just the way it ought to be.

  54. Some people with MS seem to be having success with functional medicine, and more studies need to be done. The problem is that there is no money to be made by the pharmaceutical companies in doing things like changing your diet.

  55. We need to negotiate the price of drugs based on their proven effectiveness in independent trials. What we have now is a ridiculous farce where pharmaceutical companies fund their own studies, ghost-write the articles, and then turn on their marketing engine to charge thousands of dollars for drugs with no proven effectiveness because people (understandably) are willing to try anything to save their lives or prevent disability.

  56. Bayer doubled the price of Betaseron (Multiple Sclerosis) after they purchased the drug production from a small specialty manufacturer. No they did not make improvements........they just found a way to pay for their investment.

  57. As soon as a company, drug or otherwise, says, "What we do is within the scope of the law/current practices," you know something fishy is going on. Legal does not equal ethical.

  58. When I see comments trashing Big Pharma and wanting to limit access to drugs, I cringe. I have a chronic pulmonary disease (no, it was NOT caused by smoking!). It is rare for those who do not have cystic fibrosis, which I do not have. I take a LOT of medicines and also do my part by watching my weight and faithfully attending pulmonary rehab three times a week as well as going to a gym to use equipment not available at rehab. But I do rely on my drugs and my percussion vest (cost Medicare $16,000).

    I've participated in Internet forums for those with my disease, and have been stunned to learn that those who live in single payer govt healthcare countries do not have access to percussion vests, pulmonary rehab facilities or many drugs I take. Many die to lack of such access.

    I'm only 70 and have no other health issues, and hope to live a good quality life for many more years. You accuse doctors of being mouth pieces for Pharma, well, in many countries if a doctor wants to remain as part of the national health service, he must be a mouth piece for the govt line on more costly treatments. In Australia, doctors tell patients there is no proof that percussion vests are superior to manual percussion. That is not only incorrect, but it ignores the problem that many needing this twice daily, have no one with them to do this difficult, time-consuming procedure. This vest has been part of the reason CF children now live into adulthood.

    Be very careful what you wish for.

  59. There is also an FDA failure here: The market is big enough to attract other suppliers of this generic (off-patent) drug, but FDA makes it hard to get approval.