For years, hospitals and clinics have used an injectable medicine called dehydrated alcohol to treat such maladies as chronic pain or to prevent infections in patients who must receive nutrients intravenously. Yet after a small company won a monopoly to sell its version for use with a specific heart procedure, the cost for a pack of 10 vials is about to spike from about $1,300 to nearly $10,000.
Not surprisingly, the sudden jump in price has outraged medical facilities, which now expect to pay untold millions of dollars more each year for a medication that has been available for decades.
How could this happen?
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If BPI Labs did everything very efficiently here it likely cost them between $3 – 7M to get FDA Approval on this. This effort will get them maybe $10M more a year for 5 years, if they are lucky. Should the FDA refuse to do enforcement on other firms, they could actually loose money, so plenty of risk. While it is driving the cost of healthcare up, and maybe not providing that much benefit for the cost, I struggle to believe that it impacts that actual bottom line of any provider in a truly meaningful way. Given the size of the Cleveland Clinic and its specialty focus it certainly hits them harder than most. The Cleveland Clinic could make its own and battle it out if they want.
Hi Jack,
Thanks for the note.
I believe the FDA enforced the designation which is why Belcher now has the market to itself. The Akorn and Seton products were recently discontinued.
As for financial impact, one might argue that the cumulative effect is substantial. And an unexpectedly and notably higher cost for a needed product may require cutting back something else, perhaps something used to deliver other care.
As for the Cleveland Clinic, they do have the means to pursue other options. Perhaps they will. Perhaps others will, too. And that might mean more compounded versions, for instance, at a time when FDA is struggling to ensure compounding is done correctly.
We shall see how this plays out.
Regards
ed at pharmalot
Thanks Ed. Very Interesting that the FDA has actually enforced the exclusivity, its very hit or miss on when (and how long) they choose to do that. Would not guarantee its going to be that way for the entirety of the next 5 years. Will be interesting to watch.
Our politicians know about this problem with orphan medicine. Yet they are all talks about lowering cost of medicine because it is election time.
This is not the first time orphan medicine suddenly jump up in price. I think there was another company who did this few years ago and the CEO was jailed for another reason.