An obscure injectable medication called H.P. Acthar Gel, made from pigs’ pituitary glands, has surged up the list of drugs that cost Medicare the most money, taking a growing bite out of the program’s resources. The drug, which has been around since 1952, is used as a treatment for more than 50 diseases and conditions.
However, many outside experts say there’s insufficient evidence that the drug works better than much cheaper options for treating multiple sclerosis relapses and a rare kidney disease, conditions for which it is often prescribed. In the absence of such scientific studies, some private health insurance companies, as well as Tricare, the military’s health care program, have curtailed or eliminated spending on Acthar. Proponents of the drug say it is a worthy option for patients who have failed on other therapies.
But Medicare has imposed no limits, leaving such decisions to the private insurers paid to administer its drug program on the government’s behalf. Medicare accounted for around a quarter of Questcor Pharmaceuticals’s sales of Acthar in 2012 — and that proportion is growing.
Soaring costs in the midst of uncertainty
Investments from Questcor Pharmaceuticals, along with the influence of top prescribers who have financial ties to the drugmaker through research grants, payments for delivering speeches on behalf of the company, or compensation for serving on advisory boards, have skyrocketed Medicare’s bill for H.P. Acthar Gel.
In 2008, Acthar accounted for only 202 prescriptions in Medicare, costing around $7 million. But the tally more than doubled from 2010 to 2011 — and doubled again from 2011 to 2012, reaching $141.5 million. The bill for 2013 is likely to be even higher, exceeding $220 million.
The drug is still used rarely relative to more mainstream medications, but each five-dose vial costs about $32,000. Although it long ago lost patent protection, the drug is a complex biologic agent, and the manufacturing process is a trade secret.
The lack of limits to Acthar’s use has caused many medical experts to call for Medicare to push for more studies to determine whether the drug is both effective and more useful than less expensive alternatives.
Calls for a review of Medicare’s role in drug assessments and price negotiation
Jonathan Blum, until recently the principal deputy administrator at the Centers for Medicare and Medicaid Services, said in an interview that the time may have come for Congress to rethink Medicare’s limited role in assessing drugs and the legal prohibition against Medicare’s negotiation of drug prices.
“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.
