The price of this life-saving drug has risen 97,000% since 2000 — but that’s not all, whistleblowers say

Now the Justice Department is involved
Acthar Gel must be injected. Screen capture by The Street: Investing strategies via YouTube video

When he was just seven months old, Trevor Foltz was diagnosed with infantile spasms, a rare and devastating form of epilepsy. And that has cast his parents Danielle and Jonathan into a battle to save their son’s life.

The battle has never been easy.

Trevor’s doctors prescribed Acthar, a so-called “miracle drug” with an already hefty price tag of $1600 per vial, CNN reports. The Foltzes had to fight with their insurance company to get the drug Trevor desperately needed. By that time the price had shot up to more than $23,000 per vial. But the Foltzes fought successfully and his treatment was covered, at a cost of $125,000. Fortunately, the drug worked and his tremors stopped.

Then, more than a year later, Trevor’s seizures returned and he needed another round of treatment. While their insurer balked the first time around, now it was really reluctant to shell out another $125,000. So the family was thrown into another red tape miasma.

“It feels like we’re pawns,” Jonathan says.

The drug manufacturer “is allowed to take advantage of us, and we have to move on and go about the challenge of living,” he adds.

“It seems very backwards, from the top down — and we’re at the bottom.”

And if the Foltzes — and millions of other Americans feel like pawns, it’s because they are. Many of us are caught in the twilight zone of escalating prices for the medications we need just to survive.

We’ve all heard about “Pharma Bro” Martin Shkreli’s notorious greed. We read about Bernie Sanders excoriating one company for hiking the price of a life-saving drug to $375,000. The situation is no different for H.P. Acthar Gel, the drug that did so much for Trevor Foltz. In 2000 the drug cost $40 per vial. It now costs $39,000 per vial, The Hill reports.

That’s a 97,000 percent price increase, folks.

Now, a pair of whistleblowers have come forward with a bombshell report about this drug. They allege that Mallinckrodt (formerly Questcor Pharmaceuticals) used “a multi-tiered strategy” to boost the drug’s sales. And according to court documents, the whistleblowers also allege the company bribed doctors in order to boost sales.

The drug’s price was already high ($32,000) when Mallinckrodt bought out Questcor in 2014, and company reps tell The Hill that it has made only “modest price adjustments in the mid-single digit percentage range” since then.

Now the Justice Department has stepped in, after conducting its own extensive investigation, CNN reports. This indicates that the government finds the allegations made by the whistleblowers are credible.

In their lawsuit, the whistleblowers allege the scheme led to numerous false reimbursement claims for the drug, which were submitted to federal healthcare programs.

In a press release, Mallinckrodt noted the lawsuit was originally filed in 2012 before it took ownership of the drug and added that “it strongly disagrees” with the “sensational characterization of the allegations.”

“The U.S. Department of Justice (DOJ) elected to join an existing civil False Claims Act case against the company, which has been unsealed by a court in the Eastern District of Pennsylvania,” the company said in the statement. “The original action was filed in 2012, prior to Mallinckrodt’s ownership of Acthar Gel, and consists of two complaints filed by former Questcor employees. Questcor was the previous owner of Acthar Gel. The allegations pertain principally to legacy Questcor conduct.”

But despite what the company claims, the lawsuit states that some practices, including a daily report tracking sales representative’s productivity to encourage a “sell at cost” mentality, continued after the drug’s acquisition.

In their lawsuit, the whistleblowers allege the company’s conduct “has cheated the federal government out of millions of dollars that should not have been paid, thereby enriching [the company] and subject patients to unapproved, unsafe and potentially ineffective uses of H.P. Acthar Gel.”

And the lawsuit found that wasn’t the only thing going on:

“Questcor has attempted to conceal and cover-up its payments of kickbacks and its illegal promotion of H.P. Acthar Gel by making false statements to the FDA and directing employees to conceal evidence by failing to disclose … the full nature and extent of its advertising, promotional, and marketing materials and plan.”

If the company is found liable” it may be required to pay up to three times as much as the amount the government has been defrauded, and penalties ranging from $5,500 to $11,000 for every false claim, the whistleblower statute reports.

But that probably is little comfort for the Foltzes. Their lives ground to a halt when Trevor began suffering seizures. They had already sent nearly everything they owned to Tanzania, where the family planned to move.

“Those days following Trevor’s diagnosis, for our family, were the most emotionally dark that we’ve lived through,” Danielle told lawmakers. “My husband and I were pretty much a puddle on the floor.”

And every day, this family of five (including his siblings Toby, 17, and Bristel, 13,) knows Trevor may not survive if he can’t get his medication in time. Now he faces his biggest challenge: a doctor has recommended yet another brain surgery to free him of the seizures. But if he undergoes this surgery he will no longer be able to use his right arm. He won’t be able to use his right leg or his fingers. And he won’t be able to read. He might regain some mobility after a couple of years, but that’s not really certain.

What’s really certain is this: people like the Foltzes live on a knife edge they can ill afford to fall from and the sad fact is there are millions of Americans in similar situations. Because Big Pharma above all else thrives on greed.

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