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Home Publications Blogs Beat the Press The $28,000 Prescription: Drug Companies Run Wild

The $28,000 Prescription: Drug Companies Run Wild

Sunday, 30 December 2012 15:07

The NYT had a fascinating piece on how Questcor raised the price of its drug Acthar to $28,000 per prescription. Since it raised its price it has begun pushing the drug for a number of uses for which it may not be suited. It is able to do this because the drug was initially approved by the FDA in 1952, before restrictions on off-label marketing applied.

Until recently the drug sold for less than $2,000 per prescription. (Apparently, the manufacturing process is complicated and expensive.) At this price the drug company had little incentive to try to promote its drug for different uses. It is only the high price which provides the incentive for mis-marketing the drug. 

Comments (2)Add Comment
par for the course
written by Jennifer, December 30, 2012 4:24
Yet another case of drug companies doing whatever they want; in this case they are just making as much money as possible--at least in this case the inappropriate marketing does not appear to harm anybody. As for anybody who suggests that the high price might be justified--
But Questcor did almost no research or development to bring Acthar to market, merely buying the rights to the drug from its previous owner for $100,000 in 2001. And while the manufacturing of Acthar is complex, it accounts for only about 1 cent of every dollar that Questcor charges for the drug.
When I saw this quote I was curious (it seemed to be the only positive MD quote in regards to the company)--
Dr. Lawrence Brown, a neurologist at the Children’s Hospital of Philadelphia and the president of the Child Neurology Foundation, says of Questcor: “They have gone out of their way to help every kid who needs the medicine to get it quickly and efficiently.”
Guess who part of the corporate advisory board of Child Neurology Foundation--that's right Questcor! I should emphasize this is a feature, not a bug. It would have been nice for the NYT to have pointed this out. One thing brought out by this article is the way insurance companies could play a positive role in health care reform. In part it was the large sticker price that caused insurance companies to question the drug and has caused a entire MD rethink, it is not clear it is terribly effective anyway.
manufacturing desire
written by frankenduf, December 31, 2012 8:04
Dean actually overlooks the more remarkable economic news here- Questor has discovered a Giffen good!?

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.