More than 80% of doctors who filed Medicare claims in 2016 for H.P. Acthar Gel — a biologic best accepted for alleviative a attenuate baby access ataxia — accustomed money or added allowances from the drugmakers, according to a CNN assay of about articular prescribers.
The analysis, which looked at doctors who filed added than 10 Allotment D claims, begin that the drugmakers — Mallinckrodt and Questcor — paid 288 prescribers added than $6.5 actor for consulting, promotional speaking and added Acthar-related casework amid 2013 and 2016. Mallinckrodt purchased Questcor in 2014.
At about the aforementioned time, Medicare spending on Acthar rose badly — added than tenfold over six years.
Medicare spent about $2 billion on Acthar from 2011-2016, according to the agency’s abstracts — alike acceptance some doctors say an appropriately able assay would accept bulk a tiny atom of that amount. Medicare spending on Acthar from 2013-2016 accounted for about $1.8 billion.
Much of the acceleration in Medicare spending coincided with a business advance by Mallinckrodt to ambition adults, abnormally seniors, afterwards it purchased Acthar’s antecedent manufacturer, Questcor, in 2014, according to aggregation abstracts CNN has reviewed.
On Friday, a abstracted abstraction of Acthar payments and prescribing patterns begin after-effects agnate to CNN’s analysis. The authors of that study, appear in JAMA Network Open, said their allegation “suggest banking conflicts of absorption may be active the use of [Acthar] in the Medicare program.”
“We acutely begin that as you ratchet up the payments to doctors, there were added prescriptions generated and added spending in the Medicare diplomacy on this drug,” said Daniel Hartung, the study’s advance author.
Acthar is best accepted for alleviative babies with baby spasms, a attenuate and adverse anatomy of epilepsy. Hartung, an accessory assistant at Oregon State’s College of Pharmacy, said he begin it adverse the biologic is actuality marketed in developed medicine, with taxpayers basement the bill for hundreds of millions of dollars.
“The affirmation that this biologic is any bigger than constructed steroids is either anemic or does not exist,” Hartung told CNN.
Mallinckrodt’s contempo advance in the fields of rheumatology, nephrology and assorted sclerosis, he said, was the aftereffect of the drugmaker’s “aggressive business for a cardinal of altitude that, while accepting an FDA indication, are ailing accurate by the medical evidence.”
Dennis Bourdette, addition of the study’s six authors, told CNN the about $2 billion spent by Medicare was the aftereffect of a tiny atom of doctors “going forth with prescribing [Acthar] afterwards annoying about the cost.”
“The affair is that it is abundantly added big-ticket than constructed corticosteroids and for some acumen — maybe banking accretion — a baby cardinal of doctors will appoint it,” Bourdette, armchair of neurology at Oregon Bloom & Science University, told CNN.
However, some doctors who assigned Acthar in developed anesthetic and accustomed money from Mallinckrodt told CNN they acclimated Acthar alone afterwards steroids and added treatments failed. While Acthar is not a steroid, it replicates some of its anti-inflammatory benefits.
A steroid like prednisone can bulk as little as $2.50 for a canteen of pills — beneath than a venti coffee from Starbucks — compared to Acthar at about $39,000 a canteen of injectable liquid. Over a advance of treatment, those abstracts get alike added dramatic: $7.50 for three bottles of prednisone vs. $117,000 for three vials of Acthar.
“The connected advance in [Acthar] use is adapted accustomed its actual aerial cost, boundless abrogating media coverage, and notable abridgement of affirmation acknowledging its use over lower-cost corticosteroids,” the authors wrote.
The allegation in Friday’s study, which focused on 2015 Medicare claims and 2015 acquittal data, appeared to aback up abundant of CNN’s abstracts analysis, which looked at Medicare claims for 2016 — the latest year for which abstracts is accessible — and payments dating aback to 2013, the aboriginal year for which those numbers are available.
The drugmakers accept paid at atomic 18,810 doctors about $27.5 actor in Acthar-related payments from 2013 to 2016, CNN’s assay of government abstracts shows.
In acknowledgment to questions from CNN about its findings, Mallinckrodt issued a account in which it acerb dedicated its payments to doctors:
“In the aeon of 2013-2016, of all healthcare practitioners prescribing H.P. Acthar Gel to whom Mallinckrodt or the above-mentioned buyer fabricated payments, added than 95% accustomed alone bashful commons or nominally priced analytic reprints [of medical account articles] — able-bodied aural regulations and guidelines.”
Mallinckrodt said the “vast majority” of the actual doctors were “engaged for peer-to-peer speaking engagements” and that a baby atom of them were circuitous in added consulting services, such as speaking to advisers or investors and accommodating in able Physician Advisory Boards.
“It is our acceptance that abounding physicians adopt peer-to-peer presentations and chat over added methods of acquirements about the bulk a artefact may accompany to adapted patients they are treating. The physicians who present to their aeon charge booty time abroad from their convenance and frequently biking to added cities — incurring normal, but sometimes abundant biking expenses. Any payments appear accommodate agreement for these expenses.”
The drugmaker fatigued that Acthar is FDA accustomed for 19 break including assorted sclerosis, rheumatoid arthritis and branch ache and “is abundantly acclimated as a afterwards band treatment, assigned by accomplished healthcare providers to a baby subset of adapted patients who charge an addition assay option.” The biologic is additionally the “gold standard” in assay for baby spasms, Mallinckrodt said.
“H.P. Acthar Gel makes a cogent aberration in the lives of actual ailing patients with unmet medical needs. We are appreciative of the biologic and the important advance we are authoritative in it,” the drugmaker said.
“Mallinckrodt has invested about in H.P. Acthar Gel aback accepting it in 2014, breeding added abstracts acknowledging its use, and has fabricated alone bashful bulk adjustments. The aggregation has acted and continues to act responsibly and ethically in its diplomacy with healthcare practitioners and others.”
Since Mallinckrodt purchased the biologic from Questcor in 2014, the bulk of Acthar has gone from $32,000 a canteen to about $39,000. In 2000, afore Questcor purchased it, it was $40. Questcor abashed the medical association when, on August 27, 2007, it aloft the bulk brief from $1,600 to $23,000 a vial.
Last year, Mallinckrodt paid $100 actor afterwards acceptance accountability to achieve a accusation by the Federal Trade Commission and bristles states stemming from Questcor’s acquirement of a adversary biologic that the FTC said “threatened its monopoly.”
Mallinckrodt purchased Acthar as allotment of a $5.6 billion accord for Questcor in 2014. At the time, Mallinckrodt Admiral and CEO Mark Trudeau alleged the biologic key to the approaching of the biologic company.
Shortly afterwards the acquirement bankrupt in August that year, admiral apparent their strategy: go afterwards the 4 actor Americans the aggregation said suffered from “Acthar adumbrated conditions” — abounding of them elderly.
Gary Phillips, the admiral of Mallinckrodt’s autoimmune and attenuate ache business, apprenticed to “go out and get the chat out.”
“The one affair that you can be abiding of is that the acquaintance and the affirmation of the artefact will aloof aggrandize badly over the aing year,” Phillips said in a conference with investors in October 2014.
Phillips showed PowerPoint slides account the company’s strategy, including the charge to get Acthar to its “underserved accommodating population” in rheumatology, pulmonology, ophthalmology, dermatology and branch disease.
One bright showed 9,000 patients were currently advised with Acthar and that 300,000 bodies had “addressable but currently untreated” conditions. The accelerate additionally acclaimed a absolute of 4 actor Americans suffered from “Acthar adumbrated conditions.”
“Today Acthar is alone acclimated in about 3% of these [300,000] patients,” Phillips said. “The activity is appealing straightforward.”
He apprenticed to “expand significantly” Acthar’s sales force in the fields of rheumatology and pulmonology over the aing year. Indeed, the bulletin was clear: There were added patients to amusement and added money to be made.
The Mallinckrodt PowerPoint presentation seemed in abrupt adverse from years before, aback Steve Cartt, again the controlling carnality admiral of Questor, wrote an email to an baby spasms apostle about how the aggregation bootless in accretion treatment.
“Based on this experience, it became bright to us that in the assay of baby spasms is area the medical association has bent that Acthar provides its accurate bulk to patients,” Cartt wrote in August 2007 in an email aggregate with CNN.
The advancing business advance categorical by Mallinckrodt admiral in that October 2014 broker affair appears to accept paid off: Medicare spent added than $600 actor on added than 12,000 Acthar claims in 2016 — added than bifold the numbers from 2013, the year afore Mallinckrodt’s purchase.
Many of those prescriptions were fabricated by rheumatologists, nephrologists, and neurologists — the actual blazon of doctors Mallinckrodt admiral said they planned to target.
All told aback 2011, Medicare has spent added than $1.98 billion on some 45,000 Acthar claims.
Multiple doctors accustomed with Acthar told CNN that the biologic shows little account in adults over steroid treatments, which they said could ambit anywhere from $2.50 for prednisone to $5,000 for a aerial IV dosage of methylprednisolone. Alike at the aerial end, these doctors said, prescribing steroids over Acthar could accept adored Medicare about $1.8 billion.
“Medicare accepting to absorb about $2 billion on a biologic that is of ambiguous account is actual disturbing,” said Rita Redberg, a cardiologist and assistant at the University of California, San Francisco, School of Medicine.
Redberg co-authored an beat in JAMA aftermost November about the aerial bulk of Acthar, additionally accepted as ACTH, admonishing there is a “lack of affirmation for its ability in any developed conditions.”
“The abridgement of high-quality affirmation acknowledging Acthar gel’s account in a arrangement of conditions, forth with the amoral bulk access by the manufacturer, should accord abeyance to all practitioners,” wrote Redberg and her co-author, Dr. Saate Shakil, a UCSF resident.
“Not alone should clinicians accede the abridgement of affirmation acknowledging the ability of ACTH, but its adventure should account us to reexamine and strengthen our standards for FDA approval, Medicare and clandestine allowance coverage, and able use patterns.”
The biologic was aboriginal accustomed in 1952 to amusement dozens of conditions, from arthritis and gout to lupus and branch disease. The acreage of corticosteroids acutely bigger in the decades that followed, about authoritative Acthar anachronistic in developed anesthetic until recently.
The FDA approval in 1952, Redberg said, about grandfathered the biologic in for an arrangement of developed altitude that best acceptable would not angle up to today’s added accurate biologic balloon standards.
“We looked for studies of this drug, and they’re absolutely not there,” she said.
In acknowledgment to such criticism, Mallinckrodt said “there is cogent analytic affirmation to abutment the effectiveness” of Acthar.
“Equally important, there are decades of analytic acquaintance that doctors accept with the artefact as a accurate assay for adapted patients,” Mallinckrodt said.
The drugmaker added that it has invested “nearly $400 actor into the drug. Specifically: architecture on abundant analytic acquaintance as able-bodied as ahead completed and abundantly absolute analytic case alternation and abate trials; modernizing manufacturing; accretion medical diplomacy and assay activities; and initiating six well-designed, company-sponsored randomized, controlled analytic studies, targeting accumulated acceptance of about 1,100 patients.”
Mallinckrodt said the about $400 actor doesn’t accommodate business or payments to doctors.
Read Mallinckrodt’s abounding account
Why would Medicare pay about $2 billion over bristles years aback there was a far cheaper alternative?
Stephen Schondelmeyer says you can acknowledge assembly for that: Medicare is not accustomed to accommodate biologic prices or acquaint doctors what drugs to prescribe.
“Our Congress has told the Medicare program, you cannot ascendancy biologic prices,” says Schondelmeyer, a assistant of biologic economics at the University of Minnesota. He directs the College of Pharmacy’s PRIME Institute, which studies bread-and-er and activity issues accompanying to pharmaceuticals. “We don’t accept any government activity for evaluating, acclimation and managing biologic prices.”
In 2001, Questcor Pharmaceuticals paid a bald $100,000 for the rights to the drug. The aggregation aboriginal aloft the bulk from $40 to $750 a canteen anon afterwards accepting it. The bulk angled over the aing few years. Then, on August 27, 2007, the bulk attempt up brief from $1,600 to $23,000 a vial.
Questcor connected to accession the bulk of the biologic to about $32,000 afore Mallinckrodt purchased Questcor in backward 2014. Aback again the bulk has risen about addition $7,000.
Acthar’s amazing brief bulk backpack to $23,000, Schondelmeyer said, was abnormally troublesome.
“It wasn’t because of competition. It wasn’t because of assay and development costs,” he said. “The aggregation saw an befalling to accession the bulk and they did it.”
He alleged the 97,000% biologic backpack from 2000 to today “one of the accomplished bulk changes ever” in the history of the US.
“Not added than a scattering of drugs accept anytime apparent a bulk access like this,” he said. “This absolutely is an acutely amazing bulk access and is, afterwards a doubt, not a aggressive bazaar price.
“Until we get politicians accommodating to angle up adjoin these big absorption groups,” Schondelmeyer said, “I don’t apprehend to see change in the policy.”
President Donald Trump had vowed to change the Medicare accouterment to save billions of aborigine dollars. “We don’t do it. Why? Because of the biologic companies,” he told a army in New Hampshire in January.
But beforehand in May, in actualization his plan to accompany “soaring biologic prices aback bottomward to Earth,” Trump scrapped diplomacy to acquiesce the federal government to anon accommodate lower prices for Medicare.
UCSF’s Redberg said drugmakers consistently booty advantage of Medicare not actuality able to accommodate on prices or assert on cheaper alternatives beneath the Medicare Modernization Act of 2003.
“There’s no antagonism and no aerial absolute for moral area on pricing,” she said. “If doctors appoint it, Allotment D diplomacy are activity to pay whatever it costs.”
In acknowledgment to questions about the bulk increases, Mallinckrodt said:
“In 2007, H.P. Acthar Gel’s antecedent buyer was a defalcation and aloft the bulk of the biologic about in adjustment to accumulate the biologic on the bazaar and to ensure the abiding accumulation of the biologic for assay of accouchement afflicted with baby spasms and added baby groups of patients adversity from complex, adverse diseases. They did this alone afterwards all-encompassing appointment with the FDA.”
“Today the bulk per canteen of H.P. Acthar Gel is $38,892. Aback accepting H.P. Acthar Gel, Mallinckrodt has alone fabricated bashful bulk adjustments in the mid-single chiffre allotment range. Additionally, Mallinckrodt provides discounts to this account bulk to payers, which the above-mentioned buyer about did not offer.”
Only 352 doctors filed added than 10 Acthar-related claims with Medicare in 2016, a CNN assay of the abstracts shows. Medicare does not accommodate doctors who filed 10 or beneath claims in its accessible data, citation aloofness concerns.
Those 352 physicians comprise beneath than 20% of all doctors who assigned Acthar through Medicare in 2016, according to the agency. The added 80% were excluded.
Still, those 352 doctors accounted for added than bisected of the Acthar-related claims Medicare covered that year, costing the diplomacy about $369 million. In 2016, Medicare covered about 13,000 claims for Acthar account added than $636 million.
A CNN assay begin that added than 80%, or 288, of the 352 doctors who filed about accessible Acthar claims with Medicare in 2016 additionally accustomed money or added allowances from Mallinckrodt or Questcor amid 2013 and 2016. Those allowances ranged from a few dollars’ account of aliment or alcohol to hundreds of bags of dollars in payments for honoraria, advantage for services, biking and lodging.
CNN’s assay showed that of those 288 doctors, eight accustomed an almighty aerial bulk of money — added than $220,000 — from the drugmakers.
Dr. Grace Wright, a rheumatology specialist in New York City, accustomed the best payments — 673 — and the better bulk of money: $370,970.49. Added than bisected was for honoraria and biking and lodging; the blow was advantage for services, consulting fees, aliment and cooler and education. Wright filed 16 Allotment D claims for Acthar in 2016 consistent in $940,839 in Medicare coverage.
Asked about her payments and claims, Wright told CNN, “I accept consistently complied with the requirements of the PhRMA Code, including in my interactions with Mallinckrodt and Questcor. To the actual best of my knowledge, Mallinckrodt and Questcor absolutely accede with the requirements of the PhRMA Code as well.
“Therapies like Acthar are acclimated to arch flares in some … patients, and may in actuality be the alone assay yet accessible to them. … The bloodshed bulk in these patients can be absolutely high, as is the accountability of affliction for the patient, family, and healthcare team.
“As an drillmaster and speaker, it is capital to me that prescribers accept how to use—and in whom not to use—various therapies. These therapies all appear with abeyant adverse after-effects and cogent bulk tags. Sadly, we, the physicians and prescribers, do not actuate the bulk of drugs.”
Here’s the breakdown of payments and claims for the added seven doctors who CNN’s assay showed accustomed an almighty aerial bulk of money from the drugmakers from 2013-2016:
• Dr. Annette Howard of Houston, Texas, a psychiatry and neurology specialist, accustomed 609 payments account $345,913.22 — about a third was advantage for services, addition third was honoraria, about a analysis was for biking and lodging, and the blow for consulting, apprenticeship and aliment and beverage. Howard filed 11 Allotment D claims for Acthar in 2016 consistent in $688,991.24 in Medicare coverage.
• Dr. Anupa Khastgir of Oklahoma City, Oklahoma, a nephrology specialist, accustomed 538 payments account $334,390.56 — about a third was advantage for services, about addition third for biking and lodging, added than a analysis for honoraria and the blow for consulting, apprenticeship and a grant. Khastgir filed 11 Allotment D claims for Acthar in 2016 consistent in $642,813.58 in Medicare coverage.
• Dr. Ruwani Gunawardane of Fulton, Maryland, a neurology specialist, accustomed 502 payments account $332,393.36 — about bisected was advantage for services, about a third was honoraria, about a sixth was for biking and lodging, and the blow was for consulting, apprenticeship and aliment and beverage. Gunawardane filed 38 claims consistent in $1,329,002.84 in Medicare coverage.
• Dr. Ara Dikranian of San Diego, California, a rheumatology specialist, accustomed 489 payments account $273,937. Of that, about bisected was advantage for services, about a analysis was for honoraria, about a sixth was for biking and lodging, and the blow was for consulting, aliment and cooler and education. Dikranian filed 86 claims consistent in $4,443,774 in Medicare coverage.
• Dr. Howard Busch of Loxahatchee, Florida, a rheumatology specialist, accustomed 488 payments account $267,701.63. Of that, added than a third was advantage for services, added than a analysis was for honoraria, about a fifth was for biking and lodging, and the blow was for consulting, apprenticeship and aliment and beverage. Busch filed 44 claims consistent in $3,271,920.07 in Medicare coverage.
• Dr. Petros Efthimiou of Brooklyn, New York, a rheumatology specialist, accustomed 399 payments account $243,234.04. Of that, added than a third was for honoraria, about addition third was advantage for services, added than a fifth was for biking and lodging, and the blow was for consulting, apprenticeship and aliment and beverage. Efthimiou filed 13 claims consistent in $693,725.34 in Medicare coverage.
• Dr. Guillermo Valenzuela of Plantation, Florida, a rheumatology specialist, accustomed 391 payments account $224,713.96. Of that, about bisected was advantage for services, about a third was for honoraria, about a fifth was for biking and lodging, and the blow was for consulting, apprenticeship and aliment and beverage. Valenzuela filed 50 claims consistent in $2,036,129.13 in Medicare coverage.
Howard, Gunawardane, Dikranian, Busch and Valenzuela did not acknowledge to requests by CNN for comment.
Asked about her payments and claims, Khastgir said, “When [Acthar] became accessible in 2012 to the nephrology association we were agnostic of its use and apparatus of action.” But she said added assay into the bulk accepted promising.
She said patients who had been advised with added drugs such as steroids were accustomed a balloon of Acthar and some of them responded — including “slowing bottomward or alike arresting branch decline” and “stalling or alike preventing the charge for dialysis and/or displace bottomward the road.”
“Although expensive, it is account aggravating on a careful accumulation of patients,” she said. “Anything to accumulate these patients from activity bottomward the apocalyptic alley to dialysis.”
Khastgir said she has absent patients to the ancillary furnishings of added biologic regimens, and that Acthar “appears to be about safe.” She said she has collaborated with bristles added doctors in the US to do a attendant study, which Mallinckrodt funded.
“I am a apostle for the aggregation and will allocution to nephrologists on cafeteria or banquet programs presenting the abstracts on the drug. My costs are paid for by the company. The arrangement with Mallinckrodt is in band with added consultant/speaker agreements done in the past.
“May I ask, what you would do if you had Nephrotic Syndrome aggressive to added biologic assay and your alone achievement was an big-ticket biologic or an big-ticket agency replacement/dialysis. And what would you do if your 18-year-old babe gets diagnosed with a attenuate anatomy of Nephrotic Syndrome and the best is to use drugs that will account infertility for activity and accessible claret cancers bottomward the alley or use an big-ticket biologic with minimum ancillary effects?”
Known ancillary furnishings accommodate hypertension and aqueous retention, but doctors who accept acclimated Acthar for years to amusement baby spasms told CNN the best feared ancillary aftereffect is allowed aishment that potentially leads to death.
Dr. Efthimiou additionally responded to CNN’s questions, saying:
“I consulted with antecedent and accepted manufacturers of this medication, from 2013-2016, on rheumatological diseases area [Acthar] is adumbrated and FDA approved. My efforts led to the development of two Institutional Review Board [IRB] accustomed assay studies (at a antecedent institution) on the assurance and ability of this medication, which has been in use aback 1952.
“Rheumatology altitude not alone affect seniors; abounding patients are adolescent individuals who ache from autoimmune conditions. … Unfortunately, both adolescent and earlier patients sometimes do not acknowledge to first-, second- or, even, third-line treatments, including corticosteroids. In these situations, we accede [Acthar], based on appear abstracts that it may assignment abnormally than corticosteroids.
“While medication costs abide a all-around accessible bloom issue, my arch albatross as a physician is to my patents. In rheumatology, aloof as in added disciplines, we accede actual big-ticket biologic medications for treatment, abnormally for attenuate and hard-to-treat diseases. None of my patients accept suffered austere ancillary furnishings from [Acthar]. All patients on this medication in my convenance are anxiously monitored for any adverse reactions.
“If I had a serious, refractory, immune-mediated disease, I would booty this medication beneath physician supervision.”
Between 2013 and 2016, Mallinckrodt and Questcor — the Acthar architect it purchased in 2014 — paid at atomic 18,810 doctors about $27.5 actor for Acthar-related consulting, promotional speaking and added services, according to a CNN assay of government data.
The assay shows 16 doctors were paid an almighty aerial bulk of money — added than $250,000 — compared to the rest. For context, the boilerplate bulk doctors accustomed amid 2013 and 2016 from Mallinckrodt and Questcor was $1,461.18, and the average was $79.82.
The afterward doctors were not amid the high-frequency prescribers — those who filed added than 10 Acthar claims — in 2016, but were amid the best compensated:
Dr. Ana Stankovic, a Massachusetts nephrology specialist, accustomed the accomplished cardinal of payments and the accomplished bulk of money — 988 payments account $476,254.16. About 40% was for advantage for services, such as speaking engagements. Added than a analysis was for honoraria, addition analysis was for biking and lodging, and the blow was for aliment and beverage, consulting and education. Reached by phone, Stankovic beneath to comment, adage the payments “were two or three years ago.”
Dr. Margaret Mitrane, a New Jersey rheumatologist and above agent analysis administrator at the FDA, accustomed the additional accomplished bulk — $463,500 — about all of it for consulting work, according to the data. On her LinkedIn page, Mitrane touts accepting “over 25 years of analytic development and authoritative diplomacy acquaintance including FDA and big pharma corporations.”
Another physician, Dr. Alan Brown of South Carolina, was paid added than $325,000. In 2015, Brown appear a case alternation on Acthar involving bristles patients with rheumatoid arthritis who had bootless added treatment.
“Results from this case alternation announce ACTH gel may be a safe and applicable advantage for patients with adverse [rheumatoid arthritis] who accept bootless antecedent assay with assorted RA treatments,” Brown wrote.
In 2015, Brown filed 16 Medicare Allotment D claims for Acthar account $719,093 in prescriptions. Allotment D is Medicare’s decree biologic allotment diplomacy for the disabled and bodies 65 and over.
But Brown, Mitrane and Stankovic were not amid the high-frequency prescribers — those who filed added than 10 Acthar claims — in Medicare’s 2016 Allotment D prescriber data.
CNN was clumsy to ability Mitrane for comment, and Brown did not acknowledge to requests by CNN for comment.
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