A key ingredient that compound pharmacies need for hydroxychloroquine skyrockets in price

As global demand intensifies for an old malaria drug that some believe can combat Covid-19, a distributor that supplies the key active pharmaceutical ingredient to compound pharmacies in the U.S. has raised prices by huge amounts over the past week.

Spectrum Chemical boosted the wholesale price for a 100-gram container of hydroxychloroquine sulfate by about 350%, to approximately $1,160, while a 1,000-gram container jumped 230% to $5,932. And the price for a 5,000 gram container roughly tripled to almost $30,000, according to data from Wolters Kluwer Medi-Span.

A spokeswoman for Spectrum explained the sudden clamor for the drug has made it more difficult to obtain the active ingredient, sometimes causing its own suppliers to ship partially filled orders or cancel them outright. And this affects its own purchase costs. “The result of all these current crisis challenges is that availability, prices and delivery dates to our customers will fluctuate,” she wrote us.

The price hike comes less than a month after President Trump touted hydroxychloroquine and set off a furious nationwide debate among physicians and public health experts. Other than anecdotal evidence and a few small studies that were criticized for design flaws, there is no indication the drug actually works against the novel coronavirus.

Much of the focus on hydroxychloroquine, however, involves tablets that are mostly sold by generic manufacturers, some of which have agreed to ramp up production and donate millions of tablets. However, the donations are largely earmarked for hospitals that are treating Covid-19 patients under an emergency use authorization issued by the Food and Drug Administration.

Several pharmacies contacted, meanwhile, report hydroxychloroquine tablets are in short supply. As a result, compound pharmacies, which make customized medicines, may quickly become go-to destinations for Americans who rely on the drug to treat lupus and rheumatoid arthritis. But those who do so may soon pay much more than just a month ago, depending upon where compounders buy their supplies.

“There’s been unprecedented hope this drug can do some good. So we’ve seen massive prescribing, some states curbing the amount that can be dispensed, and countries like India threatening export bans,” said Antonio Ciaccia, a cofounder at 3 Axis Advisors, a market research firm that studies drug pricing.  “This has created shortages and now, price increases. And normally, when traditional drug supplies are gone, we rely on compounders as a back stop. But now even their prices are going up.”

Not every company that supplies the key ingredient to compounders has raised prices, although that may change, according to Gus Bassani, the chief scientific officer at Professional Compounding Centers of America. He noted his company recently purchased the ingredient at a slightly higher price but absorbed the cost. A big jump in price, though, would have to be passed to compound pharmacies.

“There’s no question that the cost of that particular (ingredient) from the original manufacturer has gone up significantly. That’s just a reality,” he told us. “We’re being told that we might not be able to secure any more product because of the very large global demand from the finished pharmaceutical manufacturers. Assuming we can, it may be five to 10 times what we’ve been paying and in that scenario, we would have to sell at a higher price.”

Whether higher prices will emerge in conventional pharmacies where the generic tablets are sold remains to be seen. Several pharmacies we contacted reported their wholesaler prices have not increased, although anecdotal evidence suggested sporadic price hikes are occurring, according to B. Douglas Hoey, who heads the National Community Pharmacists Association.

For instance, Peter Koshland, who runs Koshland Pharmacy in San Francisco, told us list prices for generics “are on par with normal pricing, but nothing is available. I haven’t seen anything to indicate the prices went up.”

“There’s not really a pattern. The pricing is really all over the map,” Hoey told us. “Some say they are definitely seeing higher prices, maybe three to four times as high, but another told me he sees the same price as before everything hit. It varies by the day and the supplier for the pharmacy, but appears to be trending upward. On the other hand, we’re not hearing a lot of cries yet from pharmacies over pricing.”

[An earlier version of this story incorrectly indicated that Prasco, a generic supplier, had raised its price, but the company says it had not done so].