WASHINGTON — When a sepsis patient goes into vasodilatory shock — that is, blood stops flowing to the brain and other vital organs — the intensive care unit springs into action. Alarms blare and frenzied doctors and nurses rush to find a crash cart, scrambling through its contents for a decades-old drug: vasopressin.
Until recently, the drug was so vital and so cheap that hospital staffs kept it stashed in every corner of the ICU. In 2011, a box of 25 tiny vials cost less than $200. But after the Food and Drug Administration granted an Endo Pharmaceuticals subsidiary the exclusive right to make the drug in 2014, the price spiked: the same box, now bearing the brand name Vasostrict, cost over $4,000 in 2018.
It sounds like a time-worn tale in the vein of daraprim and EpiPen: another drug maker cornering the market and spiking the price of an old and vital drug.
There is, however, another version of vasopressin on the market — a compounded product, made by a Buffalo, N.Y.-based drug maker that combines the medicine’s bulk ingredients much the way as its FDA-approved counterpart. The alternative’s very existence has already sparked allegations of trade secrets theft, and inspired at least three lawsuits against its manufacturer and against the FDA itself. The latest was filed just last week.
Compounded drugs like vasopressin, which the FDA doesn’t review for safety and efficacy, raise an obvious question that cuts to the heart of FDA’s raison d’être: When is it OK to sidestep the agency’s so-called gold-standard review process? The drugs and the FDA’s regulations surrounding them are raising another major question, too: Is compounding acceptable if the main reason for doing so is to offer the medicine at a more affordable price?
And as the thicket of lawsuits surrounding vasopressin makes clear, it may be federal judges — not the career scientists and medical doctors at FDA — who decide those existential questions.
“We have heard this very familiar sounding Shkrellianesque tale through the years,” Hyman, Phelps & McNamara attorney Karla Palmer recently wrote. “But will the pricing trevails [sic] move the Court?”
The modern origins of FDA’s headache with vasopressin date back to 1962. That year, Congress began requiring FDA to prove that drugs were not only safe, but also effective. The question then became, what to do with drugs already on the market, such as vasopressin?
In 2006, the agency began encouraging drug makers to push old drugs through the current FDA approval process. In exchange, they’d receive the exclusive right to sell the drug, much like any other newly approved brand name drug.
Vasopressin was formally approved by FDA in 2014. Par Sterile Products, a subsidiary of Endo Pharmaceuticals, a Dublin-based drug company most known for its opioid painkillers, got the exclusivity rights and quickly spiked the price of the product.
“In my career I’ve seen vasopressin basically being almost free … to being the most outrageously expensive drug in a relatively short period,” Paul Szumita, a clinical pharmacy practice manager at Brigham and Women’s hospital, told STAT. “It’s outrageous.”
Hospitals like the University of Utah Health scrambled to make sure the drug, long a staple of emergency rooms and intensive care units, didn’t suddenly blow up their budgets.
“We have had to scale back in order to still have it available very quickly,” Erin Fox, the hospital’s senior director of drug information and support services said. “It’s just too expensive to stick everywhere like we used to.”
Vizient, which buys drugs on behalf of hospitals around the country, recently found vasopressin was the 12th most expensive acute care drug their members bought. The other drugs on their list, which include Neulasta, Remicade, and Keytruda, are not only newer, but they treat much more complex conditions. Through its subsidiary Par, Endo sold nearly $400 million worth of the drug in 2017, according to SEC filings.
“We believe we’ve taken a reasonable and appropriate pricing on our products,” Laure Park, Endo’s senior vice president of investor relations and corporate affairs, told STAT. “We work really closely with our hospital customers to make sure that they have this critical drug available to meet their needs.”
Park declined to explain to STAT how Endo determined that its pricing was “reasonable and appropriate.” “Hopefully you can trust that we are not going to go through all of the elements that we consider, but we believe that the actions we’ve taken are reasonable and appropriate,” Park said.
In April 2017, a Texas compounding company, QuVa Pharma, threw a wrench into Endo’s market and asked the FDA for permission to make a compounded version of vasopressin.
At the time, the FDA was in the process of determining which drugs could be compounded because there were important medical reasons to do so — those with a “clinical need,” in agency lingo. QuVa wanted to ensure vasopressin was on that list.
Compounding, at its most basic, is the altering of a drug to meet a patient’s need. That could mean removing a dye, or making a capsule into a liquid form, but increasingly compounding has come to encompass large-scale manufacturing of medicines, not made for just one patient, but to stock hospital shelves.
It’s not meant to be “a workaround to the costs and safety assurances associated with premarket review and with pre-approval inspections,” Eli Tomar, counsel at the law firm Akin Gump, who represents compounders that work with FDA-approved drugs rather than bulk drug substances, told STAT.
Detractors say letting companies mass produce drugs that aren’t subject to the FDA approval process opens up patients to undue risks, given the products haven’t been proven safe and effective. They point to a 2012 outbreak of fungal meningitis that killed 64 and was tied to the New England Compounding Center as the consequences of large-scale, underregulated compounding.
That’s why the FDA determines which drugs are OK to compound and which aren’t. Right now, it only takes clinical need into account.
But advocates say cases like vasopressin — where compounding is relatively simple and the price has spiked dramatically — should enter into the agency’s calculations, too. They argue that before the FDA started reviewing old drugs that had been on the market before the agency started reviewing for safety and efficacy, companies were already making these products safely without FDA approval.
There’s even some precedent for the FDA to turn to compounding when drugs that have been safely produced for decades, like vasopressin, spike in price. In March 2011, the FDA decided to turn a blind eye to compounders making a compounded version of Makena, KV Pharmaceuticals’ progestin product used to reduce the risk of preterm births, because the company spiked the price from $20 to $1,500.
Sen. Bernie Sanders (I-Vt.) wrote to FDA Commissioner Scott Gottlieb late last month requesting the agency follow the example of Makena and let companies make cheaper versions of old drugs seeing price spikes. He named vasopressin as one such example.
The FDA has insisted that relaxing the agency’s high bar for allowing compounding would do more harm than good.
“Receiving a compounded drug when a commercially available or approved drug meets the patient’s medical needs puts that patient at unnecessary and unacceptable risk,” Gottlieb told the House Energy and Commerce Committee in January 2018, adding that the products “may have been produced under substandard manufacturing conditions.”
Public health advocates, too, argue allowing compounding just to bring down drug prices would have unintended consequences.
“Solving the problem of high drug prices with untested formulations just trades one problem for another — patients should not have to choose between safety and access,” Elizabeth Jungman, director of public health programs at the Pew Charitable Trusts, told STAT. Jungman added that using compounding to solve the problem of high drug prices would undermine the FDA’s drug approval system by providing a workaround.
Compounders, for their part, have largely sidestepped the debate about price, despite its obvious benefit to their interests. Instead, they argue that their products meet a need that isn’t served by the branded drug maker.
Endo’s vasopressin product, for example, has to be diluted before being given to patients. The compounded version doesn’t.
That’s the tack Texas-based compounder QuVa took with the FDA when it submitted its request to compound vasopressin back in April 2017. But there were other reasons for Endo and its subsidiary Par to be suspect of QuVa’s intentions. Just five days before QuVa sent the FDA the letter, Par’s senior vice president and general manager, Mike Rutkowski, left the company to join QuVa, which had already hired a number of other former Par executives.
In the days leading up to his resignation, Rutkowski allegedly spent his time forwarding internal PowerPoints to QuVa staff and copying documents off his computer to a personal hard drive, according to a trade secrets lawsuit filed by Par against QuVa and Rutkowski. (QuVa declined to comment on the litigation, but Rutkowski has denied these allegations in court filings.)
Once Par got wind of QuVa’s intent to compound vasopressin, it sprung into action: The company wrote to the FDA three separate times, set up phone meetings, and trekked to the FDA’s Maryland campus for an in-person meeting that September.
It was unsuccessful, at least in the interim. In July 2017, the FDA gave QuVa and other compounders its blessing to make the product, at least until the agency could examine the question more closely.
Endo and Par sued the FDA over that interim decision in October 2017. That lawsuit has snaked its way through the D.C. District Court for the past year and a half. In that time another compounder, Athenex, intervened after it announced it also intended to compound vasopressin.
Athenex declined to answer any of STAT’s questions, but the company’s CEO has said publicly that it is actively selling the product. Peter Jenkins, the co-founder of QuVa, the company that originally nominated vasopressin for compounding, told STAT that the company doesn’t currently sell vasopressin.
It’s not entirely clear how much cheaper compounded vasopressin is than its FDA-approved counterpart. Athenex keeps its pricing closely guarded and declined to provide any information to STAT. The company does not provide exact pricing on it’s website, though visitors are greeted with a full-page pop-up that states: “Are you ready to save up to 35% on Vasopressin?”
Pricing obtained from one hospital shared with STAT shows that Athenex’s 50-milliliter IV bag filled with a 1 unit / ml vasopressin solution retails for $268. To make the same bag using Endo’s product would cost a hospital roughly $400, not including the labor costs of getting the drug into an IV bag.
Endo’s Park told STAT that her company is “not feeling an impact to our business,” but deferred to Athenex on any questions about their pricing or marketing.
Endo’s first lawsuit against the FDA may now be moot: On March 1, the agency finally ruled, emphatically, that no compounder may make vasopressin using bulk powder.
“The agency doesn’t see a clinical need for outsourcing facilities to compound from these substances,” Gottlieb wrote in a statement, referring to vasopressin and one other drug. “The law directs the FDA to limit compounding from bulk substances to situations where there’s a clinical need for such products or in situations where the drugs are judged by the FDA to be in shortage.”
Within just four days, Athenex sued to reverse that decision, arguing the FDA lacked the authority to block the compounders from making the drug. Endo has quickly moved to intervene in that lawsuit as well.
Athenex is largely unknown in Washington health policy circles. However, the D.C.-based law firm representing Athenex, BakerHostetler, is not. The same firm also represents the Outsourcing Facility Association, an association of compounders known for fighting FDA’s compounding policies tooth and nail.
The group has called on the FDA to allow any FDA-approved drug product to be made using bulk powder. “Every bulk drug substance that is a component of an FDA-approved product has a proven clinical need and must be included on the 503B Bulks List,” OFA wrote in recent comments to FDA.
If Athenex wins its lawsuit, it could give a boost to those like OFA that want the FDA to be more hands off when it comes to compounding, despite concerns from the FDA and from public health advocates. If the FDA wins, the decision could bolster the agency’s authority to crack down on compounding.
While a wholesale change in the FDA’s compounding rules likely wouldn’t happen without an act of Congress, the Athenex saga will clearly have an impact that ripples beyond vasopressin.
That resolution, however, is a long ways off. And in the meantime, Athenex is still on the market: The FDA agreed last week not to take action against the company until the court rules on the lawsuit.
“We intend to continue selling Vasopressin till [the court reaches a decision],” Athenex CEO Johnson Lau told investors Monday. “And if the court decides the FDA was wrong … we will continue to sell it indefinitely.”