Medicare Spending On Acthar Spikes As Prescribing Physicians Are Paid Millions By Drugmaker

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Over 80 percent of physicians who filed Medicare claims for H.P. Acthar Gel in 2016 received cash or other perks from the manufacturers, Mallinckrodt and Questcor. Doctors who filed more than 10 Part D claims were included in CNN‘s analysis, a total of 288 prescribers. From 2013 to 2016, they were paid in excess of $6.5 million for “consulting, promotional speaking and other Acthar-related services.” Over roughly the same period, Medicare spending on the same drug grew by tenfold, with almost $2 billion being spent on Acthar from 2011 to 2016.

Much of the increase in Medicare spending took place between 2013 and 2016 when they spent almost $1.8 billion on the drug. Mallinckrodt bought the previous manufacturer of Acthar, Questcor, in 2014 and immediately ramped up advertising that targeted adults, especially senior adults and encouraged its use for treating rheumatology, nephrology and multiple sclerosis.

A separate study was published Friday in JAMA Network Open that came to the same conclusion. In the published report, authors state that “financial conflicts of interest may be driving the use of [Acthar] in the Medicare program” as indicated by a correlation between increased payments to doctors, number of prescriptions written, and Medicare spending.

The medication is not a steroid but mimics a steroid’s anti-inflammatory benefits and is most widely known as a treatment for a rare but devastating form of epilepsy among infants. The fact that Mallinckrodt is now marketing Acthar to senior adults troubles Daniel Hartung, lead author of the study and associate professor at Oregon State’s College of Pharmacy. He indicates that, while FDA indicated, evidence that it performs any better for that age group for the conditions mentioned in advertising than synthetic steroids do is weak at best.

Another author of the JAMA Network Open study, Dennis Bourdette, says that the increased spending was the result of doctors prescribing Acthar with no concern for associated costs. Bourdette, who is also the chair of neurology at Oregon Health & Science University, adds that, “The issue is that it is incredibly more expensive than synthetic corticosteroids and for some reason — maybe financial gain — a small number of doctors will prescribe it.” In the published JAMA study, authors note that,

“The continued growth in [Acthar] use is peculiar given its very high cost, widespread negative media coverage, and notable lack of evidence supporting its use over lower-cost corticosteroids.”

CNN followed up with some of the doctors who are prescribing Acthar more frequently, and some of them said that they prescribed it only after they tried steroids and other treatments with no luck.

To call the difference in cost between a steroid and Acthar significant is an understatement. A bottle of Prednisone or another steroid can cost as little as $2.50. One vial of Acthar costs almost $39,000. At the high end of the cost spectrum for steroids is a high IV dose of methylprednisolone that goes for $5,000. Even if these higher cost steroids are considered, Acthar prescriptions cost Medicare $1.8 billion in the period examined. The cost of the drug has risen a staggering 97,000 percent since 2000. Stephen Schondelmeyer, professor of pharmaceutical economics at the University of Minnesota and director of the College of Pharmacy’s PRIME Institute which studies economic and policy issues related to pharmaceuticals, attributes the meteoric rise to a lack of control.

“It wasn’t because of competition. It wasn’t because of research and development costs. The company saw an opportunity to raise the price and they did it… Not more than a handful of drugs have ever seen a price increase like this. This certainly is an extremely extraordinary price increase and is, without a doubt, not a competitive market price.”

Mallinckrodt issued this statement in response to questions from CNN.

“In the period of 2013-2016, of all healthcare practitioners prescribing H.P. Acthar Gel to whom Mallinckrodt or the prior owner made payments, more than 95% received only modest meals or nominally priced clinical reprints [of medical journal articles] — well within regulations and guidelines.”

They said that most of the “consulting, promotional speaking and other Acthar-related services” for which prescribers were paid during this period was peer-to-peer presentations and that payments were appropriate reimbursement for travel costs and time spent away from their practice. They also stressed that Acthar is FDA indicated for 19 conditions and is usually used later in treatment with a small portion of patients who need an alternative to other medication.