Thursday, July 31, 2008

Carnival of MS Bloggers #16

Welcome to the Carnival of MS Bloggers, a bi-weekly compendium of thoughts and experiences shared by those living with multiple sclerosis.

"What would you do if you weren't afraid?"

That is the question Brian poses to each of us in  
During one of my yoga classes my instructor read a story to the class while we were in a meditation pose. The story she read was "Who Moved My Cheese," by Spencer Johnson. The story deals with change; changes in everyday life and how most people fear change.




This story really struck a core with me due to all of the changes that have happened in my life during this year. The most obvious of course, was begin diagnosed with Multiple Sclerosis. The fear of the unknown can really limit people to how they accept changes in their lives. At the time of my diagnosis I had no idea what MS was let alone how it would forever change my life. That fear of the unknown started kicking in and I was freaking out. I was noticing changes in my body and was not able to do certain things as easily as once before. Some days I could hike to the top of a mountain with my hubby Chaz and other days I was so fatigued I couldn't keep my eyes open. MS was changing my body in ways I thought would never happen at age 30. I knew that if I didn't keep a positive outlook I would crack under the pressure.

I started learning more about MS and understanding my symptoms. I started taking better care of myself and took my diagnosis as a wake-up call for my health. As crazy as this may sound, my MS became the change I needed. MS was a slap in the face at the unhealthy life I was leading. In a way I was letting go of the old me and ushering in the new me. Smoking a pack of ciggs everyday since I was 16 years old went out the window. Doing cardio, yoga and weight training has become my new routine. Even with the MS I'm currently the healthiest I have ever been in my life. The way I have dealt with this "change" has helped me appreciate life a little more.

Change is scary, but the way one deals with change can make the world of difference. The most important message someone can get from the story, "Who Moved My Cheese," would have to be:

"What would you do if you weren't afraid?"

I hope you find this story as enjoyable as I did~
I think Diane's response to Brian is important for each of us to remember -

"You have taken the first step. Now, continue to sharpen your emotional tools. MS may take many things from your body and life, but you can always love and be loved."

Such truth in these simple words.

In a different tale, Anne of Disabled Not Dead shares some of the fearful moments of her early MS years. This piece came in the form of an email which Ann sent to me after she discussed Rheumatoid Arthritis on her blog recently and I asked her a question. Thankfully she is allowing me to share this with you.


When I was diagnosed with MS in 1976, that was enough for me to handle because at the time I had just got married and we wanted a family. All the treatments for MS at that time harmed the fetus, so I was advised to "table" getting pregnant. After a round of chemotherapy that was especially bad, I threw my hands up and told my doctor "ENOUGH!" I had gone through ACTH, plasmaphoresis, various chemo infusions, blood washing, nuclear therapy, high steroid therapy, physical therapy, electro-stim, and had been in several "studies." (They justify everything by calling them "therapy" or "studies.")

Then in 1979 I found out I had endometriosis, which inhibits fertility. So over three years, I had 11 (eleven!) surgeries for endometriosis in efforts to get pregnant. I was on Pergonal, Clomid and going through invitro (5 times) trying to get pregnant. Then OB/GYN I was going to said he would no longer participate in my campaign to have babies. Because of all the "therapies" I had been on, there was high concern for deformities and spontaneous abortions. (7 of those)

Every OB/GYN I went to after, as soon as they saw (from records forwarded) that I had MS and had various treatments for it, they would refuse fertility treatments.

I was tested for Rheumatoid Arthritis and Fibromyalgia at that time and the tests were negative - everything within normal range. Then testing for the RH Factor was done and that was within normal range. MRI's were not around yet, CT scans of brain showed benign MS. I had a small window of opportunity to get pregnant and I jumped on it.

Finally, I made a decision to NOT tell the next OB/GYN anything bad, in order to get someone to treat me. Long story short, after 9 pregnancies, I have two live children.

Pregnancy is supposed to make MS dormant but that isn't always so. When I was 6 months pregnant (on Christmas morning) I had a stroke and the stroke set off the MS. Two years of rehab later, most of my physical MS symptoms can be attributed to stroke. When I was well enough to go back to school and work, instead of telling people I had MS, I only told them of the stroke.

I was in medical school when I was dx'd with MS, almost completed when I finally got a pregnancy to hold and dropped out so I could hold on to the baby. It worked. But I had to give up a career that I had worked for since before I was a teenager. No regrets now, I have two sons. After rehab, I went through a PA (Physician Assistant) program and was able to be employed without discrimination because I was quiet about the MS.

If you read my blog, you may remember my writing about someone who "outed" me in the ER where I had been employed. She was a med tech in my doc's office and totally screwed me in my job. I was fired.

After that, I've had to invent some very devious stuff just to remain employed. I had a bad turn and I returned to work after being wheelchair bound for 8 years. I worked part time, but not in the medical field the whole time. I believed everything the docs were feeding me - that I wasn't going to be able to work full time, that I'd be in a w/c before I was 50, that with each flare I would get worse and finally that I would advance to progressive MS.

In 2000, I decided to take control of my life again. I went back on my old regimen of exercise, water therapy, vitamins, diet, H-Wave and deep water walking. Within 3 months, I was able to work 25 hours a week and in 6 months added 15 hours to bring me to full time.

Getting past an employment physical was old hat for me, so in 2001 I decided to get back in the medical field. They did some routine blood work and urine and wouldn't ya know - they sent it to the lab my doc uses. That's how they found out I had MS - from the lab. Because of the ADA laws in USA, I was covered. The lab tech was fired but damage was already done.

I went back to my neuro in efforts to see if there was anything they would be privy to that I didn't really want them to know.

He decided to do some bloodwork because he was not cc'd on employment blood studies and he wanted to see how much it had changed since the year before. At that time, I was only getting bloodwork done once a year (around my birthday).

Lo and behold, he had added several tests onto the routine tests, and guess who now has RA. So when it flares, I go on a prednisone timetable...if it is really bad, I do IVSM. When the RA kicks up, the MS flares; when the MS flares, the RA acts up. Vicious circle.

I have to go for MRI within the next month and I am worried because I have lost some of my cognitive abilities. Coordination isn't bad, but brain power is noticably changed. I get MRI's every two years because I am stubborn and don't want to be reminded yearly of how bad it is getting. LOL. On MRI, from 1994 through 2000, I had active 16 brain lesions - very little changes on MRI.

In 2002, after my regimen had been in place almost two years, I had 3 active lesions. In 2004, one active lesion. In 2006, no active lesions. Because my brain isn't behaving iitself lately, I am concerned there will be active lesions again. My neuro is cool with the fact that I don't want any MS drugs and agrees to just follow me. I think something absolutely DRASTIC would have to happen to me for me to consider any MS therapies....like total shutdown where nothing works anymore. Even then I guess I'd have to think about it...if I could think still.

Oh well, you've got the general idea of how I manage with MS. Mental stimulation is foremost with me and I believe it keeps me sharp. No one has said so, but I myself do notice that my brain is slipping in the past six months or so. I often have to retrace steps, which is a key indicator! LOL

Sorry for this long email. I sometimes think I have to justify why I choose to treat my MS the way that I do, when so many are treating with various injections.

Certainly there are many ways to treat Multiple Sclerosis, but one which Anne mentioned, ACTH, is no longer an economical option since it's manufacturer, Questcor Pharmaceuticals raised the price 14-fold last August. It is more commonly used off-label for Infantile Spasms, a rare epileptic disorder, and one vial now costs $23,239 wholesale when it was $1650 previously. With Infantile Spasm a typical course of treatment requires 5 vials of medication bringing the cost to $145,431 retail.

The following story illustrates that our politicians are listening and willing to act on your complaints.


Price Gouging in Extremely Vulnerable and Captive Market
By 9:00 AM, the line of those waiting to enter Room 106 of the Dirksen Senate Office Building in Washington, D.C., had grown longer than the velvet rope gate established to organize such a line.

"What's being lobbied for today?" asked a congressional staffer who passed by the table covered with handouts of the witnesses' testimonies.

The topic of the morning was pharmaceutical "price gouging" from drug companies with effective monopolies within an "extremely vulnerable and captive market." Thus on July 24, 2008, Senator Amy Klobuchar (D-MN) opened the Joint Economic Committee hearing to discuss, "Small Market Drugs, Big Price Tags: Are Drug Companies Exploiting People With Rare Diseases?"

Even Before It Began

While a friend held my place in the waiting line, I was allowed to sit in one of the chairs at that press sign-in and handout-laden table. I asked the staffer sitting next to me, "Is this a larger turn-out than normal?" She laughed and told me that she had "never seen people line-up for a JEC hearing before."

From that chair, I was able to witness a public relations representative who arrived to leave fact sheets provided by one of the drug companies who was mentioned specifically. That company is Questcor Pharmaceuticals, Inc., who manufacturers the drug H.P. Acthar (r) Gel which is FDA-approved for the treatment of periodic flairs in multiple sclerosis. However, the drug is more commonly used in the treatment of Infantile Spasms (IS) which is a rare seizure disorder found in only an estimated 2000 infants each year in the United States.

The PR rep was told that someone else in charge would need to be asked, but I certainly asked to have a copy. After reading the fact sheet and when he returned to the table, I asked him some questions as well as introducing myself by name. But of course, he had no idea exactly how much I have researched Questcor's historical financial information.

Just a little later, a messenger from PhRMA, Pharmaceutical Research and Manufacturers of America, the industry's lobby firm, also came by the table with copies of a Press Release prepared to accompany today's hearing. Funny thing. She looked a lot like a drug sales rep. You know, that former cheerleader look.

But she couldn't stick around for the hearing as she was on her way to a different one, perhaps the one during which Medicare Part D Reform was discussed. Another funny thing about PhRMA - why is it that so many of their press releases tout "more than 300" drugs in development for name-the-disease-category, such as Mental Illness or Orphan Drugs.

Inside Room 106

A long conference table was facing Senator Klobuchar's seat upon which were three name tags, several bottles of water, and timing boxes which counted down the amount of time allotted for each witness to speak. I chose a seat on the second row so as to be able to hear the speakers better.

Joining me in attendance were 75-80 others in the room. Huge turnout I'm told for a Joint Economic Committee hearing. Staying to listen to the testimonies was Questcor's pr guy who sat a few rows behind me.

Senator Klobuchar opened the meeting by introducing the topic and thanking the three witnesses about to testify. On the docket were an academic economist from the PRIME Institute at the University of Minnesota, a physician who is the CEO/president of Children's Hospitals and Cinics of Minnesota, and a mother of an Infantile Spasm patient who was also in attendance.

Although I do believe that little Trevor slept for most of the event and only needed to be escorted out of the room once, upon returning he was happy enough with his bottle. Sitting next to his daddy and little baby brother was also Tobey, the big brother, who enjoyed some time on his Nintendo. Sorry, I didn't get a good look at what game he was playing.

Before excusing himself to attend another meeting, Senator Charles Schumer, Chairman of the Joint Economic Committee, presented a statement addressing the topic of the day. It is known that Senator Schumer has been "a staunch advocate of lower priced drugs and a competitive pricing market."

The Economist

Madeline Carpinelli, research fellow at the PRIME Institute which focuses its research on policy issues related to pharmaceutical economics and drug expenditures at all levels in the marketplace. Madeline explains that ordinary annualized price increases for branded drugs has been two to three times the rate of general inflation which has become routine.

"This rate of inflation is not necessarily acceptable, or even reflective of an economically efficient pharmaceutical market, but it has come to be expected in recent years."

The study at hand centers around drugs experiencing extraordinary price increases which was defined as "any price increase that is equal to, or greater than, 100% at a single point in time." This refers to a drug which doubles in price from one day to the next overnight. Primarily these drug products are not among the top 100-500 drugs on the market and the huge price increases may have been "flown under the radar" in small patient populations.

The Doctor

Dr. Alan Goldbloom is the president and CEO of Children's Hospitals and Clinics of Minnesota which is "the 7th largest pediatric heath care system in the nation." Dr. Goldbloom made clear that his testimony is not a rant against the entire pharmaceutical industry, but is focused on the practices of some specialty pharma companies and their questionable pricing of some older drugs now used in rare disease populations. His personal experience comes from two companies in particular, Ovation and Questcor, but notes that they are not the only ones and that this practice is not confined to pediatric pharmaceuticals.

Dr. Goldbloom discussed the drug indomethacin (Indocin) which was discovered over 30 years ago to be a safe and effective, non-surgical treatment of patent ductus arteriosus (PDA) found in some premature babies. Dr. Goldbloom testified that before Ovation purchased exclusive rights to Indocin (and several other drugs) from Merck in 2005, the cost of Indocin was just over $108 per unit, truly a low-cost alternative to surgery. But then in January 2006 the price jumped up 1278% to $1500 per unit.

"Indocin is an old drug. It has been on the market for more than three decades, so this dramatic price increase cannot be attributed to the high cost of research and development."

Presented was data on three other drugs which Ovation had purchased from pharmaceutical giant Merck and the amounts of price increases for these drugs which include Cosmegan (up 3437%), Diuril Sodium (up 864%), and Mustargen (up 979%). Please keep in mind that an extraordinary increase was previously referred to as being only 100%.

Dr. Goldbloom turned his attention to H.P. Acthar(r) Gel which experienced a 1410% increase in August 2007 from $1650 per vial to $23,269 per vial. I have previously discussed historical data related to Acthar and Questcor's justification for the rise in price.

After the close of stock trading today, Questcor released their 2nd Quarter Results in 2008 and held a conference call. I was unable to listen to the call at that time and will have to listen to the replay on their website later. Questcor reports Net Sales of $24.9 million and a profit margin of 91%. "We continue to successfully execute our Acthar-centric business strategy," said Don M. Bailey, President and Chief Executive Officer of Questcor in the Press Release.

It looks like Questcor had initially published a Statement Regarding the July 24 Senate Hearing on their website, but the item has been withdrawn and the link goes nowhere.

The Mommy

Danielle Foltz is mother to Trevor Foltz who at 7 1/2 months began exhibiting seizures which resembled "a newborn startle reflex." This was in November 2007 just before Thanksgiving. The Foltzes were preparing to return to their ministry work and home in Tanzania, East Africa when Trevor's jerky, odd movements were noticed. Danielle has shared their story on her
blog Dear Trevor.

Originally the Foltzes insurance company denied coverage of Acthar stating that it is not FDA approved in the treatment of Infantile Spasms. Questcor filed an sNDA for that very indication in August 2006 but announced that they received a "not approvable" letter from the FDA in May 2007.

Mr. Foltz spent days on the phone with the insurance company fighting for coverage for Trevor. Mrs. Foltz called the Acthar patient assistant program but was told that it would take "a minimum of 3 business days" for the approval process and that approval was not guaranteed even in financial situations such as their's.

Ultimately treatment for Trevor was delayed six days before they were given the go-ahead to start treatment. Being quoted a price of $30,000 per vial the medication, and with a round of treatment for Trevor requiring 5 vials, the cost for medication alone approached $150,000 for their drug plan.

"Because ACTH must be injected into the thigh, a nurse had to teach us how to administer it once we went home. When she asked my husband if he was nervous about giving Trevor the shot for the first time, he answered that he was more nervous about holding $5000 in a single syringe. Or worse, dropping the vial!!"
Just imagine. With an insurance plan having 10-20% copays on medication, Trevor's treatment would cost $15,000-30,000 to the insured patient. Insurance policies can be structured in so many ways that it is very difficult to ascertain what the typical cost to the insured customer is. What I pay out-of-pocket is different from what you pay out-of-pocket which is different from what your neighbor pays out-of-pocket, all for the very same drug.

In Conclusion

It was fascinating to attend the meeting and learn a few things I didn't already know. It was a tiny bit frustrating to be sitting in the audience and know that I could supply much greater detail than was presented in such a short period of time. In fact, two of the drugs I take in relation to having multiple sclerosis were mentioned during the question/answer session.
  • Effective Monopolies
  • Vulnerable and Captive Markets
  • Old Drugs - New Prices
  • Orphan Designation
  • Anti-competitive Behavior
  • Price Gouging
These were the topics discussed today. Senator Klobuchar stated that this is only the beginning of the research to come. The Federal Trade Commission and the General Accounting Office have been asked to investigate further the business strategies and executive decisions which have led to such extraordinary price increases in recent years.

From 100% to 10,000%, drug prices in niche markets have soared
and ultimately we all pay for that. The question is - Who Benefits? and Who Suffers?

I look forward to following the developments of such research and the conclusions of the researchers.

After the hearing concluded, I spoke with Mr. Foltz before introducing myself to Ms. Carpinelli. Unlike the Questcor guy, she immediately knew who I was. "I've read your blog. It's great! And the research you've done... Going through and actually reading SEC filings... Impressive. I wouldn't do that. (lol)"

Well, then again. I'm an odd duck and heard for about the fourth time this week that I should start a secondary career. What do you think?
  • Passionate Patient Advocate
  • Financial Researcher and Analyst
  • Strategy Consultant
  • Freelance Writer/Author/Blogger
Which hat do you think might look good on me?

Transcripts and Video can be seen here.

This concludes the 16th edition of the Carnival. I apologize if I've left your blog out. Please consider submitting again for the next installment.

The next Carnival of MS Bloggers will be hosted here on August 14, 2008. Please remember to submit a post (via email) from your blog of which you are particularly proud, or which you simply want to share, by noon on Tuesday, August 12, 2008.

Thank you.
Read comments for this post here.

Wednesday, July 30, 2008

I Have a Voice and I'm Learning How to Use It

How often do you feel as though nobody really listens to what you have to say?

When was the last time you thought to yourself, "if only the people in charge had talked to me" ?

Or "that sounds fine and dandy" BUT............

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Well recently I had an opportunity to share my voice with some pharmaceutical executives. After reading a few posts from right here on this very blog which discussed a drug, yet-to-be FDA approved, for use in multiple sclerosis, the Vice President of Corporate Communications at Acorda Therapeutics, Inc., Tierney Saccavino, emailed me.
"I have checked out your blog periodically, and I have found it to be articulate, well-written and thoughtful. I’ve been impressed with the detailed research that has gone into your posts."
This wasn't the first time someone from Acorda had contacted me. In May Jeff Macdonald from the communications office emerged from lurking long enough to inform me that Acorda would soon be announcing results from the second Phase III drug trial testing Fampridine-SR in treatment of multiple sclerosis.
"I saw your post from last week [ed. May 14] about getting “pitched” by a PR person, so completely understand that you might be wary of another call. That said, I’d really like to talk to you about what we’re doing, what you’re doing and get your thoughts about how I can work with MS bloggers while being respectful—I completely understand that a lot of folks will not be interested in communicating directly with someone from the pharmaceutical industry."
In my email response, I asked lots of questions including some related to Acorda's motives in contacting me. The email reply I received seemed too short and dodged my pointed questions. [Note to self - When reading email responses, scroll down through the part of the sender's email which includes your original message. You might find that the responder has added answers to your questions WITHIN THAT space.] I didn't discover that Jeff had provided answers to my questions until roughly a month later as I was cleaning up my inbox.

But before simply posting information regarding results from a Phase III drug trial, I wanted to know what exactly we were talking about. I researched the drug Fampridine-SR (a patented sustained-release formulation of 4-Aminopyridine). I researched the research on said drug in its use in spinal cord injury and multiple sclerosis. I also researched Acorda and its Founder/CEO/President Ron Cohen. I wanted to make sure that any information I presented was accurate.
"We've been very impressed with the thoroughness and with the detail on your blog," said Dr. Ron Cohen, CEO of Acorda.
This was said at the beginning of a two and a half hour phone conversation which took place July 17, 2008. I found myself listening to Cohen's firsthand account of how he chose medicine, then how he came to be in the biotech field. You can find much of this story in The Bioentrepreneur and Fampridine. Something I did learn was that his father was a physician and his mother was a classical violinist. What Cohen learned is that published material which might have thought to be long-forgotten can be found in this age of vast digital repositories of information and clever researchers (me).

With that said, I felt fairly confident that my research was accurate and that I had a reasonable grasp of the information regarding Fampridine-SR which I've shared in previous posts. However there were questions not answered by simply reading the literature and press releases. I had an opportunity to ask some of those questions and the execs had an opportunity to listen to my opinions, perceptions, and learn from my experiences as a patient with multiple sclerosis.

Please note that this post is in no way an endorsement for Fampridine-SR nor for Acorda. It is an extension of the information previously shared regarding these topics and questions which a few readers had posed in addition to my own.

**********

In MS there are three types of pharmaceutical treatment commonly in use: disease-modifying, exacerbation rescue, and symptomatic. Fampridine-SR does not change the course of the disease nor does it diminish the length or intensity of relapses in multiple sclerosis. Thus Fampridine-SR is a symptomatic treatment which helps to improve nerve conduction in demyelinated areas of the central nervous system in some patients. (Yes, I'm using qualifiers cause, well honestly, nothing works for everybody in the same way.) It does so by plugging some of the holes through which potassium ions escape in damaged nerve fibers. It does not remyelinate, it temporarily plugs the holes at the individual nerve fiber level to allow more electric current to flow through the damaged areas as long as the nerve itself is not dead.

When asked about possible drug interactions, Cohen responded that they have not found indication of drug interactions. "90% of the molecule is not metabolized and thus excreted. It is not competing with the same enzyme [of other drugs] nor inducing the same enzyme."

What about trial participants/patients with cardiac issues? "With 1500 people in all trials dating back to the '90s [ed. pre-Acorda involvement], there has been no indication of a relationship of fampridine with any cardiac events." The FDA requires that clinical trial drugs undergo a thorough QT study. Acorda completed a 200-patient QT study in 2007 which showed that Fampridine-SR doesn't affect heart rhythm.

Have you found that fampridine causes potassium levels to fluctuate? "There is no association with potassium levels. No mechanistic or theoretical reason to as it is not changing potassium in the blood. It is blocking the molecular potassium channel, one out of hundreds, and has nothing to do with potassium in the body."

Did you eliminate any trial participants due to an increased risk of seizure? For the inclusion/exclusion criteria, patients with a history of seizure were excluded as were those with EEGs which showed epileptic foci. No MRIs were conducted to determine if a patient had substantial cortical-subcortical lesion load which might have a seizure focus. When asked if seizure risk would be a contraindication, Cohen stated that they will discuss that with the FDA.

When asked about long-term side effects, Cohen provided lots of statistics regarding number of participants in the various trials and number of people who have continued on long-term safety studies, currently at 500 people. Common side effects have included dizziness, insomnia, tingling, nausea, light-headed. The most common side effects in the recent trial were urinary tract infection and falls. Acorda is currently analyzing data from all trials to develop an integrated summary of safety which apparently is a rather involved process.

**********

Why the 25-ft timed walk? Why not a 500-meter walk? Or how about measuring walking steadiness not speed? I believe that MS patients could undergo a timed walk five times in a row and get five different results. Such is the variability of multiple sclerosis. This is a major problem I had with the trial description and one of the first questions I asked Jeff Macdonald back in May.

Cohen shared that the biggest challenge in designing the trials came from trying to show exactly how patients were benefiting from the drug and then determine how to prove it. In order to identify the specific benefits, Andrew Blight, now Acorda's Chief Scientific Officer, traveled to ms centers around the country and interviewed patients, patients' families, doctors, and nurses to help formulate the hypotheses related to the drug. What Dr. Blight was told was that patients using 4-AP experienced improvements with stamina, fatigue, visual, bowels, and strength. The most frequent benefits related to walking, strength, and stamina.

Again why the 25-ft timed walk? "In the literature there is research regarding the use of the 500-meter walk, the 6 minute walk, and the 25-ft walk. Centers had tested these methods and found there was an extremely high correlation between the 25-ft walk and the long walks." So the 25-ft timed walk has become the "gold standard."

What about the variability in walking in MS patients? For me, I can start out a little stiff going at a moderate speed. Then I hit the wall so to speak and things slow down to molasses with 50-pound weights attached to each leg. But if I stop and rest until I can feel my legs again, I can walk again often more easily than I began. Cohen replied, that in the placebo group in walks that were measured over 21 weeks, they found that the natural variability was up to 70%!
"The issue is not the amount of change, consistency is the real issue. MS is characterized by inconsistency. If you have a treatment that is really doing something, it ought to show that it is doing something consistently over time." said Cohen.
So Acorda devised an algorithm to show consistency which they plan to publish separately because they feel it is an important method to use in measuring consistency over time.

Note: I may come back and insert a description of the methodology. But for now I'll move on.

What does the 25% improvement in walking speed mean for me in my life? Cohen responded that the FDA recommended another test to show that the improvement was meaningful to the patient. In the UK at Kings College, they have developed the MSWS12 which is a 12-Item MS Walking Scale questionnaire related to daily life activities that rely on ambulation. When comparing this questionnaire with a battery of other tests, the MSWS12 correlated highly with other clinically relevant instruments. The FDA required Acorda to show that the timed walk benefit for responders correlated with the MSWS12 scores which they said it has.

One other test they used was the LEMMT which is the Lower Extremity Manual Muscle Test. MSers you know the one where your doctor asks you to resist their pushing on your legs in various directions. Cohen said that with improved scores on the LEMMT it showed that the drug is working the way it was thought to work. He added, "Overall, many people who take the drug are demonstrably better, even spasticity was improved even though we didn’t recruit people based on spasticity."

**********

Earlier in the teleconference, I had asked about the company's decision to focus on multiple sclerosis rather than continue to place focus in spinal cord injury?

"MS is an overlapping condition with SCI. They both address the need to restore neurological function." and that focusing on MS fits "squarely with the mission statement."

How much did the booming market for MS drugs in the past 10 years affect their decision to move forward in phase III trials for MS? "We’re targeting orphans. If you have something that really makes a difference, it will find a market and provide a good return on investment. In the 1990s, other drugs came out, so we didn’t have to fight a battle to get investors interested."

Cohen also explained that when he first decided to focus on SCI that he was advised against it. He was told that the "market is too small." Although he didn't say it directly, it was implied that the larger MS market certainly did affect their choices. High risk, high reward.

**********

Finally the most important issue to me: Cost?


I started taking Baclofen for spasticity which works well, helps my walking ability, and is cheap. Why would a patient want to switch?

"You may not want to and that's fine. It is important to distinguish the drugs. Baclofen is for symptomatic effects. It's a mixed bag. Fampridine-SR is a drug that improves conduction."

In the trials, 60% of the participants were taking immuno-modulators. The vast majority had to be walking disabled which EDSS score of 5.5-6.0. Others had EDSS score as low as 2.5 and we found that they could benefit from drug regardless of baseline walk.

When asked about Patient Assistance Programs, Cohen said they are interested in establishing a PAP and will be working closely with NORD (National Organization for Rare Disorders). They are looking to model it after their program for Zanaflex which provides coupons to help patients with drug copay.

Here is where my voice was heard!!!

I shared my experience with various assistance programs and explained how my insurance works (or better yet doesn't work well). I described how my income was too high for help with Copaxone in 2006 and how my income had to reach below 200% FPL to fully qualify. I described how I am disqualified for help with Provigil because I have insurance although it may be exhausted.

They asked me questions related to the types of insurance I thought that most MSers have. What were some of the issues related to paying for medications. What percent of MS patients you know have coverage? How do typical MS patients get their insurance? Etc. I answered as best I could. Group vs. Individual Policies. Moving to Part-time Work. Losing access to Group Insurance. and more....

"These are excellent education points for us."

"Our goal is make the drug as accessible as possible and must balance that against other imperatives. Shareholders comprise …. If people don’t have access to the product, we’re not fulfilling our mission. Our commercial team is working on this."

"Wider issue with our health insurance system, especially for those who take expensive drugs for chronic disease."

"It is frustrating to the company as well. And how to fairly compensate investors and shareholders for taking the risk."

"Love to hear more from you as part of a constituency panel of patients, insurance, doctors, etc."

So how about that? Not only has my voice been heard online, it may be heard in person as well. If that helps to make sure that all patients have access to the drug without great out-of-pocket expense, then I will have made a difference for others.

I've often thought that I've gone through such financial struggles and disappointments for a reason. Maybe that is the force which is driving me. I sincerely don't want other patients to have the same experiences I've had. We don't need that stress and certainly don't need the insecure financial future which comes with it.


Before ending the two and a half hour conversation, I asked a bold question.

What have you done with the proceeds from selling your stocks which has totaled $6.7M since October 2006? Cohen replied that some went to gov’t and other paid for options, pay off mortgage held in cash, renovation, education accounts for the girls, 8 and 6, and diversified.

I shared that I dream of owning a house someday.


At the end of the teleconference, Cohen invited me to come up to the company and share my thoughts with his team, perhaps as part of that constituency panel.

What do you think dear readers - Should I share more of my thoughts with a pharma company who actually wants to listen and who was apparently shaken up with my personal take on some of their pre-launch activities?

As always, please leave your thoughts below in the comments. I look forward to hearing what you have to say.

Sunday, July 27, 2008

Going Incognito....

Humorous Pictures

...means fitting in and going unnoticed.

The benefits of such may not be seen immediately,
but at a later date and time.

Learning how to belong is the greatest benefit. IMHO.

Saturday, July 26, 2008

Carnival Submissions Due

Just a reminder that submissions for this week's Carnival of MS Bloggers are due Tuesday morning, July 29, 2008!! You may submit a recent post from your blog via blogcarnival or email.

I look forward to seeing what great stuff you wish to share. Thank you.

Friday, July 25, 2008

Open Letter to Isaac and Jocelyn

Dearest Jocelyn,

Your prayers were heard a year before you ever spoke them and He sends the following to you. Please read to the end.

On August 9, 2007, my brother forwarded a fundraising email to me regarding a longtime friend of his (maid of honor in his wedding 12 years ago) who was praying for the final necessary funds for an adoption trip to Liberia to bring home their three new children. The mother's name is Candace and her family was already blessed with five children and one more came along in the spring of this year.

I took the opportunity to catch up on her family's life and to follow her story on her blog. In addition to funds, she was asking for prayers that the director of the orphanage would be able to present their case to the new Consular. I believe that you probably have direct knowledge of the difficulties which families were experiencing in obtaining visas for their adopted children.

I asked Candace to share the details of their difficulties, and wrote to me a lengthy email with lots of information. I then called a friend (father of a piano student) asking who would be the appropriate office or person at the State Department to try to get them some assistance at the U.S. Embassy in Liberia. My friend happens to be the Ambassador-at-Large in the TIP (trafficking in persons) Office here in Washington, D.C.

He knew and had worked with the Liberian Ambassador (LA) and asked me to send along 'simply the facts'. He then contacted LA inquiring as to the situation there, on an unofficial basis. Emails passed (many which I was able to read) between them and my friend hoped that he had done some good. I thanked him greatly.

The email traffic on this end was concluded on Monday the 13th. On Tuesday, Patty Anglin met with the new Consular and had a rather productive meeting I'm told. On Thursday, Pastor Wesley met with the Consular and the children received clearance to travel.

"Are you ready to go pick up your babies?" said the voice on the phone.

Somewhere in all this, I discovered your blog The Boy Who Found Me. I must apologize for being a lurker for so long but I wanted to see how Isaac's surgery went after arriving in the States. I have also been wishing to find a good way to share the message of Redeeming Waters International.

Jocelyn, I have multiple sclerosis and many of my bloggerly friends also have MS. Some with mobility difficulties, some without. But almost universally, we have dealt with struggles, uncertainties, fear, and rage. Some have undergone intensive therapy to relearn how to walk, successfully. Some have developed such positive messages of perseverance and hope that I am often in awe of their spiritual natures.

Multiple Sclerosis and Spinal Cord Injury have some similarities, especially in that the electrical messages sent through the central nervous system get messed up. I can't help you or Isaac with the struggles of spinal cord injury. But perhaps I, and my readers, can lend support in dealing with the frustrations of both of you during this time of recovery.

You as the caregiver (and mommy) have unique issues to deal with as you watch Isaac struggle so. It is a horrible pain to watch a loved one in such pain and get sucked into the dark waters of depression. I have never been confined to a wheelchair, but I have traveled those dark waters. I have undertaken intensive therapy to regain muscle strength and control in a hand/arm of which one finger had gone completely limp. For a musician, that was frightening.

Isaac is experiencing something which very few would understand, maybe only those who had been there before. If Isaac has undergone high-dose steroid treatments to help his spine recover more quickly, then there are many MS readers here who understand what that's like and the effects linger.

Please tell Isaac that although his leg feels like a lump of flesh and bone, that he WILL be able to make it move again. It's kinda like a beaver build a dam across a river, slowing the water flow down to a trickle. The water is still there; the river is still there. The water pushes against that beaver dam until it breaks a tiny hole in the tangle of debris or it begins to move around the dam clearing a new passageway.

As long as the ducks living downstream continue to call the waters down each day and celebrate each dip, the river will find a way to the ducks so that they can swim on that fresh water from above.

Many Blessings,
Lisa

P.S. To readers who come by here, perhaps you have something to share which may help Jocelyn and Isaac through this journey of healing.

The Boy Who Found Me

Redeeming Waters International

Thursday, July 24, 2008

Price Gouging in Extremely Vulnerable and Captive Market

By 9:00 AM, the line of those waiting to enter Room 106 of the Dirksen Senate Office Building in Washington, D.C., had grown longer than the velvet rope gate established to organize such a line.

"What's being lobbied for today?" asked a congressional staffer who passed by the table covered with handouts of the witnesses' testimonies.

The topic of the morning was pharmaceutical "price gouging" from drug companies with effective monopolies within an "extremely vulnerable and captive market." Thus on July 24, 2008, Senator Amy Klobuchar (D-MN) opened the Joint Economic Committee hearing to discuss, "Small Market Drugs, Big Price Tags: Are Drug Companies Exploiting People With Rare Diseases?"

Even Before It Began

While a friend held my place in the waiting line, I was allowed to sit in one of the chairs at that press sign-in and handout-laden table. I asked the staffer sitting next to me, "Is this a larger turn-out than normal?" She laughed and told me that she had "never seen people line-up for a JEC hearing before."

From that chair, I was able to witness a public relations representative who arrived to leave fact sheets provided by one of the drug companies who was mentioned specifically. That company is Questcor Pharmaceuticals, Inc., who manufacturers the drug H.P. Acthar (r) Gel which is FDA-approved for the treatment of periodic flairs in multiple sclerosis. However, the drug is more commonly used in the treatment of Infantile Spasms (IS) which is a rare seizure disorder found in only an estimated 2000 infants each year in the United States.

The PR rep was told that someone else in charge would need to be asked, but I certainly asked to have a copy. After reading the fact sheet and when he returned to the table, I asked him some questions as well as introducing myself by name. But of course, he had no idea exactly how much I have researched Questcor's historical financial information.

Just a little later, a messenger from PhRMA, Pharmaceutical Research and Manufacturers of America, the industry's lobby firm, also came by the table with copies of a Press Release prepared to accompany today's hearing. Funny thing. She looked a lot like a drug sales rep. You know, that former cheerleader look.

But she couldn't stick around for the hearing as she was on her way to a different one, perhaps the one during which Medicare Part D Reform was discussed. Another funny thing about PhRMA - why is it that so many of their press releases tout "more than 300" drugs in development for name-the-disease-category, such as Mental Illness or Orphan Drugs.

Inside Room 106

A long conference table was facing Senator Klobuchar's seat upon which were three name tags, several bottles of water, and timing boxes which counted down the amount of time allotted for each witness to speak. I chose a seat on the second row so as to be able to hear the speakers better.

Joining me in attendance were 75-80 others in the room. Huge turnout I'm told for a Joint Economic Committee hearing. Staying to listen to the testimonies was Questcor's pr guy who sat a few rows behind me.

Senator Klobuchar opened the meeting by introducing the topic and thanking the three witnesses about to testify. On the docket were an academic economist from the PRIME Institute at the University of Minnesota, a physician who is the CEO/president of Children's Hospitals and Cinics of Minnesota, and a mother of an Infantile Spasm patient who was also in attendance.

Although I do believe that little Trevor slept for most of the event and only needed to be escorted out of the room once, upon returning he was happy enough with his bottle. Sitting next to his daddy and little baby brother was also Tobey, the big brother, who enjoyed some time on his Nintendo. Sorry, I didn't get a good look at what game he was playing.

Before excusing himself to attend another meeting, Senator Charles Schumer, Chairman of the Joint Economic Committee, presented a statement addressing the topic of the day. It is known that Senator Schumer has been "a staunch advocate of lower priced drugs and a competitive pricing market."

The Economist

Madeline Carpinelli, research fellow at the PRIME Institute which focuses its research on policy issues related to pharmaceutical economics and drug expenditures at all levels in the marketplace. Madeline explains that ordinary annualized price increases for branded drugs has been two to three times the rate of general inflation which has become routine.

"This rate of inflation is not necessarily acceptable, or even reflective of an economically efficient pharmaceutical market, but it has come to be expected in recent years."

The study at hand centers around drugs experiencing extraordinary price increases which was defined as "any price increase that is equal to, or greater than, 100% at a single point in time." This refers to a drug which doubles in price from one day to the next overnight. Primarily these drug products are not among the top 100-500 drugs on the market and the huge price increases may have been "flown under the radar" in small patient populations.

The Doctor

Dr. Alan Goldbloom is the president and CEO of Children's Hospitals and Clinics of Minnesota which is "the 7th largest pediatric heath care system in the nation." Dr. Goldbloom made clear that his testimony is not a rant against the entire pharmaceutical industry, but is focused on the practices of some specialty pharma companies and their questionable pricing of some older drugs now used in rare disease populations. His personal experience comes from two companies in particular, Ovation and Questcor, but notes that they are not the only ones and that this practice is not confined to pediatric pharmaceuticals.

Dr. Goldbloom discussed the drug indomethacin (Indocin) which was discovered over 30 years ago to be a safe and effective, non-surgical treatment of patent ductus arteriosus (PDA) found in some premature babies. Dr. Goldbloom testified that before Ovation purchased exclusive rights to Indocin (and several other drugs) from Merck in 2005, the cost of Indocin was just over $108 per unit, truly a low-cost alternative to surgery. But then in January 2006 the price jumped up 1278% to $1500 per unit.

"Indocin is an old drug. It has been on the market for more than three decades, so this dramatic price increase cannot be attributed to the high cost of research and development."

Presented was data on three other drugs which Ovation had purchased from pharmaceutical giant Merck and the amounts of price increases for these drugs which include Cosmegan (up 3437%), Diuril Sodium (up 864%), and Mustargen (up 979%). Please keep in mind that an extraordinary increase was previously referred to as being only 100%.

Dr. Goldbloom turned his attention to H.P. Acthar(r) Gel which experienced a 1410% increase in August 2007 from $1650 per vial to $23,269 per vial. I have previously discussed historical data related to Acthar and Questcor's justification for the rise in price.

After the close of stock trading today, Questcor released their 2nd Quarter Results in 2008 and held a conference call. I was unable to listen to the call at that time and will have to listen to the replay on their website later. Questcor reports Net Sales of $24.9 million and a profit margin of 91%. "We continue to successfully execute our Acthar-centric business strategy," said Don M. Bailey, President and Chief Executive Officer of Questcor in the Press Release.

It looks like Questcor had initially published a Statement Regarding the July 24 Senate Hearing on their website, but the item has been withdrawn and the link goes nowhere.

The Mommy

Danielle Foltz is mother to Trevor Foltz who at 7 1/2 months began exhibiting seizures which resembled "a newborn startle reflex." This was in November 2007 just before Thanksgiving. The Foltzes were preparing to return to their ministry work and home in Tanzania, East Africa when Trevor's jerky, odd movements were noticed. Danielle has shared their story on her
blog Dear Trevor.

Originally the Foltzes insurance company denied coverage of Acthar stating that it is not FDA approved in the treatment of Infantile Spasms. Questcor filed an sNDA for that very indication in August 2006 but announced that they received a "not approvable" letter from the FDA in May 2007.

Mr. Foltz spent days on the phone with the insurance company fighting for coverage for Trevor. Mrs. Foltz called the Acthar patient assistant program but was told that it would take "a minimum of 3 business days" for the approval process and that approval was not guaranteed even in financial situations such as their's.

Ultimately treatment for Trevor was delayed six days before they were given the go-ahead to start treatment. Being quoted a price of $30,000 per vial the medication, and with a round of treatment for Trevor requiring 5 vials, the cost for medication alone approached $150,000 for their drug plan.

"Because ACTH must be injected into the thigh, a nurse had to teach us how to administer it once we went home. When she asked my husband if he was nervous about giving Trevor the shot for the first time, he answered that he was more nervous about holding $5000 in a single syringe. Or worse, dropping the vial!!"
Just imagine. With an insurance plan having 10-20% copays on medication, Trevor's treatment would cost $15,000-30,000 to the insured patient. Insurance policies can be structured in so many ways that it is very difficult to ascertain what the typical cost to the insured customer is. What I pay out-of-pocket is different from what you pay out-of-pocket which is different from what your neighbor pays out-of-pocket, all for the very same drug.

In Conclusion

It was fascinating to attend the meeting and learn a few things I didn't already know. It was a tiny bit frustrating to be sitting in the audience and know that I could supply much greater detail than was presented in such a short period of time. In fact, two of the drugs I take in relation to having multiple sclerosis were mentioned during the question/answer session.
  • Effective Monopolies
  • Vulnerable and Captive Markets
  • Old Drugs - New Prices
  • Orphan Designation
  • Anti-competitive Behavior
  • Price Gouging
These were the topics discussed today. Senator Klobuchar stated that this is only the beginning of the research to come. The Federal Trade Commission and the General Accounting Office have been asked to investigate further the business strategies and executive decisions which have led to such extraordinary price increases in recent years.

From 100% to 10,000%, drug prices in niche markets have soared
and ultimately we all pay for that. The question is - Who Benefits? and Who Suffers?

I look forward to following the developments of such research and the conclusions of the researchers.

After the hearing concluded, I spoke with Mr. Foltz before introducing myself to Ms. Carpinelli. Unlike the Questcor guy, she immediately knew who I was. "I've read your blog. It's great! And the research you've done... Going through and actually reading SEC filings... Impressive. I wouldn't do that. (lol)"

Well, then again. I'm an odd duck and heard for about the fourth time this week that I should start a secondary career. What do you think?
  • Passionate Patient Advocate
  • Financial Researcher and Analyst
  • Strategy Consultant
  • Freelance Writer/Author/Blogger
Which hat do you think might look good on me?

Transcripts and Video can be seen here.

Wednesday, July 23, 2008

Small Patient Population - Big Drug Prices

Information regarding Questcor and H.P. Acthar Gel compiled and analyzed by Lisa Emrich, blogger/writer at brassandivory.blogspot.com, multiple sclerosis patient and patient advocate with direct experience dealing with NORD and other patient assistance programs. Prepared for Senate Joint Economic Committee Hearing in support of Danielle Foltz's testimony.

Upon learning of the steep increase which Questcor Pharmaceuticals implemented in their lead drug, H.P. Acthar Gel on August 27, 2007, I became furious. Not because I am familiar with Infantile Spasms (IS), but because the families affected by IS will be facing an outrageous financial battle not too unlike my own financial battles stemming from multiple sclerosis.

Acthar was developed in the 1950's for the treatment of exacerbations in multiple sclerosis and became useful in treating the epileptic condition known as West Syndrome or Infantile Spasms. In 1997, the FDA recognized the need to continue manufacturing without interruption of H.P. Acthar Gel by Rhone-Poulenc for use in the treatment of Infantile Spasms.
For several months in 1996, Rhone-Poulenc stopped making Acthar because of manufacturing difficulties. A crisis resulted, with insufficient supplies to treat patients with West's syndrome and other diseases.
While the company worked with the Food and Drug Administration to fix problems in its plant, the nonprofit National Organization for Rare Disorders helped dole out the very limited supplies for emergency cases of infantile spasms and other conditions. "During the shortage, even some people with severe pain from rheumatoid arthritis couldn't get the drug in favor of babies with life-threatening West's syndrome," says NORD president Abbey Meyers.

In July 2001, Questcor acquired H.P. Acthar Gel from Aventis (formerly Rhone-Poulence) for the cost of $400,000. In November 2002, the FDA approved Questcor's application to extend the labeled shelf life of H.P. Acthar Gel from 12 months to 18 months. In October 2003, the FDA grants 'orphan drug' status to H.P. Acthar Gel for the treatment of Infantile Spasms. In November 2003, Questcor and IDIS enter into an exclusive agreement for distribution outside of the U.S. Between 2001 and 2005, Questcor made several strategic moves to consolidate Acthar manufacturing and distribution. In May 2004, neurologists from the American Academy of Neurology (AAN) and the Child Neurology Society (CNS) who specialize in diseases of the brain and central nervous system publish new guidelines presenting options for treating infantile spasms. A brief article regarding the new guidelines can be found here.

In February 2005, James Fares took the helm as CEO and proceeded to redirect Questcor to focus in the field of neurological disorders. Between May 2005 and September 2005, Questcor hires Craig Chambliss as Vice President of Sales & Marketing, Gregg Lapointe to the Board of Directors, and George Stuart as Chief Financial Officer. In October 2005, Questcor sells three of their products for $28.3 million earning them enough money to pay off much debt and focus on realizing their grand vision. In May 2006, Questcor acquires Doral(R) giving them a second product for the national neurology sales force. Ultimately the CEO's intent to revitalize the use of Acthar in MS market was not successful as IV Solumedrol is the preferred choice in treating multiple sclerosis flairs.

In August 2006, Questcor submitted an sNDA for FDA approval to include treatment of IS on the label of H.P. Acthar Gel. In December 2006, Questcor presents data on Acthar at the American Epilepsy Society annual meeting. On May 14, 2007, Questcor announced that the FDA did not approve the sNDA. One week later, Questcor CEO James Fares resigns. Followed by a number of colleagues in the months which followed.

Albert Hansen, Chairman of the Questcor Board of Directors, commented, "We appreciate Jim's service over the past two years and wish him well in the future. Our goal is to increase shareholder value through a continued focus on Acthar, consistent progress in our development pipeline, and a more rapid transition to profitability." Questcor will announce additional adjustments to its efforts shortly.

...a more rapid transition to profitability.”

During June and July 2007, Questcor makes strategic moves to consolidate supply by choosing Curascript, a subdivision of Express Scripts, as the sole distributor for Acthar. On August 27, 2007, Questcor board announces the New Strategy and Business Model for H.P. Acthar Gel.
UNION CITY, Calif.--(BUSINESS WIRE)--Aug. 27, 2007--Questcor Pharmaceuticals, Inc. (AMEX:QSC) announced today that its Board of Directors has approved a new strategy and business model for H.P. Acthar Gel(R), a natural form of adrenocorticotropic hormone (ACTH). This change may affect the usage of Acthar in the treatment of certain diseases, including multiple sclerosis (MS) and infantile spasms (IS), an extremely rare form of epilepsy. Specifically, Questcor will initiate a new pricing model, create an expanded safety net for patients using Acthar, and provide a group of Medical Science Liaisons to work with health care providers who are administering Acthar.

Don M. Bailey, Questcor's Interim President commented, "the goal of Questcor's new strategy is to make manufacturing and distribution of Acthar economically viable on a stand-alone basis, so that Questcor can continue to ensure the availability of Acthar for those patients who need it most and fund projects which can contribute to the growth of the company."

Acthar is currently approved in the U.S. for the treatment of MS exacerbations and other conditions. No drug is approved in the U.S. for the treatment of IS, a potentially life-threatening disorder that typically begins in the first year of life. However, pursuant to guidelines published by the American Academy of Neurology and the Child Neurology Society, many child neurologists use Acthar to treat infants afflicted with this condition. In June 2006 Questcor submitted a Supplemental New Drug Application to the Food and Drug Administration (FDA) and is currently pursuing formal agency approval for Acthar in the treatment of IS. Previously, the FDA granted Orphan Designation to H.P. Acthar Gel for the treatment of IS. As a result of this Orphan Designation, if Questcor is successful in obtaining FDA approval for the IS indication, Questcor will also qualify for a seven year exclusivity period during which FDA is prohibited from approving any other ACTH formulation for IS unless the other formulation is demonstrated to be clinically superior to Acthar. Questcor anticipates incurring significant additional costs in its further pursuit of a formal FDA-approved indication for Acthar in the treatment of IS.

The implementation of this new strategy includes a change in the method of distribution for Acthar and a significant increase in treatment cost. In addition, Questcor has changed its support program for health care professionals and reinforced its safety net for patients using Acthar. Questcor previously announced that the change in distribution from multiple distributors to a single specialty distributor is complete. Acthar is now being distributed only through its specialty distributor, Curascript. This new distribution system provides seamless support for Acthar including providing necessary information to health care providers and families, assisting with reimbursement, and distributing product faster. As of the end of July, this transition had virtually eliminated all Acthar inventories held by wholesalers. The new pricing is effective Monday, August 27 and brings Acthar in line with the cost of treatments for other very rare diseases. Based on Questcor's understanding of the usage of Acthar, the cost for a course of treatment could approach $80,000-$100,000.

Questcor acquired Acthar in 2001. Since then, to ensure that this drug remains available on a consistent basis for the patients who need it, Questcor has incurred significant costs to transfer and modernize Acthar's complex manufacturing process to assure continued compliance with FDA standards. Questcor net losses were $10.1 million in 2006 and $5.5 million for the first six months of 2007.

Questcor's new strategy is intended to create an economic model that will allow Questcor to support ongoing efforts to manufacture and distribute Acthar, to conduct any FDA-required studies, to continue development of QSC-001, and to develop or acquire other drugs or drug candidates for neurological disorders or for rare diseases.

Questcor continues to focus on the need to work with patients who are attempting to secure reimbursement from their insurance companies and has expanded its participation with the National Organization for Rare Disorders (NORD), an advocacy group for patients afflicted with rare disorders and a sponsor of patient assistance and co-pay assistance programs for patients who are otherwise unable to afford their treatments. The combination of the change to a specialty distributor, the availability of Medical Science Liaisons, the expanded participation with NORD, and existing government programs -- Medicaid and the federally-funded State Children's Health Insurance Program -- is intended to provide a safety net to make Acthar available to all patients who need it.

The term 'orphan drug' refers to a product that treats a rare disease affecting fewer than 200,000 Americans. The Orphan Drug Act was signed into law on January 4, 1983. The intent of the Orphan Drug Act is to stimulate the research, development, and approval of products that treat rare diseases. However, Questcor did not research and develop H.P. Acthar Gel, they purchased it from Aventis for $400,000 in 2001. But yet they want to bring the cost inline with other expensive drugs used to treat rare disorders which did result from huge R & D expenses.

Now the issue of 'rare diseases' is one which I do have personal knowledge. I have MS and I use an expensive self-injectable drug. The safety net for that drug is administered by National Organization for Rare Disorders (NORD), which is the same safety net Questcor uses for H.P. Acthar Gel. However, this 'safety net' has big holes and many families may likely fall right through. If you've read my other posts (at brassandivory.blogspot.com), you are aware that NORD finally awarded full assistance in receiving that $21,000 drug after my earnings sunk below $20,000. I do not know the details of the Acthar program, but if it is anything like the Copaxone program, the family's earnings will need to be below 200% Federal Poverty Level in order to qualify.

So with the August 2007 announcement, Questcor also claims that the price increase is necessary due to the company's net losses of $10.1 million in 2006 and $5.5 million for the first six months of 2007. The following information comes from research I conducted and published on my blog in October 2007. Some of the numbers were not made public at the time, so corrections have been incorporated.

...each time I contemplate the wonder of drug discovery and the ways in which I personally benefit from the investment in research, I am reminded that pharmaceuticals mean big business. Don't be fooled into thinking otherwise, especially when a company points to the bottom line when discussing the need to adjust business strategy and raise drug prices, as Questcor has done.

Since learning that Questcor raised the price for H.P. Acthar Gel, an injectable drug used primarily to treat the seizures associated with Infantile Spasms and the acute relapses of Multiple Sclerosis, I have been plagued with Questcor's justification for raising the price almost from $1650 to $23,265 per vial in August. Outrage spread quickly throughout patient support systems for families affected by Infantile Spasms and throughout the Multiple Sclerosis community.

What has been the PRICE OF ACTHAR?


Even the United Stated Securities and Exchange Commission (SEC) expressed concern in 2005 with the accounting methods Questcor applied in recording expenses related to the exchange or rebate of expired Acthar stock held by drug wholesalers. After Questcor reintroduced the distribution of Acthar through major drug wholesalers, thousands of vials (~5000) and over $4.5 million worth of drug expired in 2003- 2005 without reaching patients who may have benefited from its use. During this time period, Questcor recorded the value of these exchanges against gross revenue of product sales, which affects the company's perceived operating margin. Questcor's explanation to the SEC refers to the representation of company growth to please the investors. (Not being an accountant, I don't completely understand their justifications.) In addition to concerns over the exchange accountings, the SEC expressed difficulty in determining the assigned value of each vial of Acthar.

The SEC's correspondence can be read here:

In 2003, Questcor replaced/exchanged 2653 vials of Acthar valued at $2.3 million. The return rate for expired drug was 18-20% according to their annual report.

One vial = ~$867

In 2004 and 2005 combined, Questcor replaced/exchanged 2109 vials of Acthar valued at $2.228 million.

One vial = ~$1057

Using information provided in Questcor's annual reports, the following amounts may have been the per vial prices during 2003, 2004, 2004 amended, 2005, 2006.

  • 2003: $867

  • 2004: $928 (sales up 2%, demand up 7%, price up 7%)

  • 2005: $1058 (sales down 2%, demand down 13%, price up 14%)

  • 2006: $1185 (sales up 20%, price up 12%)

  • 2007: $1658 (2nd q. price up 41% over 2nd q. 2006)

August 2007: $23,265 (price up 1400% over June 2007)


Questcor has more recently revealed that the list price for one vial of H.P. Acthar Gel was $1650 before they raised the list price to $23,265 in August 2007, giving it an increase of 1410% over the June 2007 price.

$1650 x 1410% = $23,265

In the following, the italicized excerpts are taken from Questcor's 2007 Annual Report.

What are Questcor's expenses for Cost of Goods (in millions)?

  • 2002: $2.822

  • 2003: $3.573 (inc. $467K write-off)

  • 2004: $3.730 (inc. $606K write-off)

  • 2005: $3.110 (inc. $103K write-off)

  • 2006: $3.000 (inc. $726K for Acthar increase in volume)

$908,000 spread = 32% difference low-to-high

  • 2007: $5.295 (inc. $1.83M for royalties based on Acthar net sales)

$2.3M increase = 77% increase over 2006

Cost of product sales for the year ended December 31, 2007 increased $2.3 million from the year ended December 31, 2006. Cost of product sales includes material cost, packaging, warehousing and distribution, product liability insurance, royalties, quality control (which primarily includes product stability testing), quality assurance and reserves for excess or obsolete inventory. Stability testing is required on each production lot of Acthar and is conducted at third party laboratories at periodic intervals subsequent to manufacturing. Stability testing costs are expensed as incurred. We incur a royalty of 3% on total net sales of Acthar to a third party and a royalty of 1% of annual net sales over $10.0 million to another third party.

The increase in cost of product sales was due primarily to an increase of $1.4 million in royalties on Acthar due to the increase in net sales during the year ended December 31, 2007 as compared to the same period in 2006. Increases of $308,000 in product stability testing and $254,000 in distribution costs also contributed to the increase of cost of product sales in the year ended December 31, 2007 as compared to the same period in 2006. Cost of product sales as a percentage of total net product sales was 11% for the year ended December 31, 2007, as compared to 23% for the year ended December 31, 2006. The decrease in cost of product sales as a percentage of total net product sales in the year ended December 31, 2007 as compared to the same period in 2006 was due primarily to the increase in net product sales resulting from the new Acthar pricing level implemented in August 2007. We estimate that cost of sales as a percentage of sales for 2008 will be approximately 10%.

What are Questcor's modest expenses for R & D (in millions)?

  • 2002: $2.295

  • 2003: $2.267 (inc. $821K for site transfer fees and sublease)

  • 2004: $2.181 (inc. $580K for site transfer fees)

  • 2005: $2.227 (inc. $560K for site, legal, and consulting fees)

  • 2006: $3.033

$852,000 spread = 39% difference low-to-high

  • 2007: $4.758 (inc. $333K for legal fees and $1.3M for increased head-count

  • unknown non-cash (stock option) compensation expected to be $1M in 2008

$1.725M increase = 57% increase over 2006

Research and development expense for the year ended December 31, 2007 increased $1.7 million from the year ended December 31, 2006. The costs included in research and development relate primarily to our product development efforts, outside services related to medical and regulatory affairs, compliance activities, costs associated with our medical science liaisons, and our preliminary evaluation of additional product development opportunities. The increase in research and development was due primarily to the addition of our clinical and development leadership team during the fourth quarter of 2006 and our medical science liaisons in the second quarter of 2007. Headcount-related costs increased by approximately $1.3 million in the year ended December 31, 2007 as compared to the same period in 2006. An increase totaling approximately $333,000 for regulatory fees and patent-related legal fees also contributed to the increase as compared to the same period in 2006.

We estimate that our research and development expenses (excluding non-cash SFAS No. 123(R) share-based compensation expense) will be approximately $10.0 million to $14.0 million during 2008 resulting from our efforts related to the Acthar submission to the FDA for the treatment of IS and the continued development of QSC-001. The higher end of the range would only result in the event that we were to successfully advance QSC-001 to clinical trials. We estimate that total non-cash SFAS No. 123(R) share-based compensation expense for 2008 will be approximately $4.5 million of which we estimate approximately $1.0 million will be incurred in research and development expense.

What are Questcor's expenses for Depreciation and Ammoritization (in millions)?

  • 2002: $1.138

  • 2003: $1.157

  • 2004: $1.208

  • 2005: $0.995

  • 2006: $0.316

  • 2007: $0.498

Depreciation and amortization expense for the year ended December 31, 2007 increased to $498,000 from $316,000 for the year ended December 31, 2006. The increase in depreciation and amortization was due primarily to amortization expense related to the Doral purchased technology. In May 2006 we purchased the rights in the United States to Doral. Our total purchase price, including acquisition costs, allocated to the Doral product rights was $4.1 million. In addition, in January 2007, we made a $300,000 payment to IVAX to eliminate the Doral royalty obligation that was also recorded to purchased technology. Purchased technology is being amortized on a straight-line basis over fifteen years, the expected life of the Doral product rights.
What are Questcor's Other Income/Expenses?

  • 2002: $(.382)

  • 2003: $(.457)

  • 2004: $(.566)

  • 2005: $9.642 (inc. divesting of non-CNS products)

  • 2006: $.734

  • 2007: $1.439 (inc. divesting of Emitasol)

What are Questcor's Administrative/Sales Expenses (in millions)?

  • 2002: $10.715 (inc. $1.5 for officers, and $5.9 sales/marketing)

  • 2003: $10.400 (inc. $2.3 for officers, sales/marketing not distinct)

  • 2004: $11.551 (inc. $3.6 for officers, severance, and accounting)

  • 2005: $10.019 (inc. $2.6 for officers, severance, and accounting)

  • 2006: $17.282 (inc. $4.9 for officers, directors, severance, and accounting; as well as $5.6 for additional sales force)

  • 2007: $17.662 (inc. $6.9 for officers, directors, severance, etc. based on $2M increase; $4.0 for additional sales force which was let go based on $1.6 decrease in head-count)

$7,263,000 spread from 2005 to 2006....WHOA!!!

From my October analysis:

In 2006, Questcor adopted a new accounting standard to include the value of stock options in operating expense and specified the amounts paid to each member on the board of directors. These two amounts alone account for $1,250,000. The amounts paid to officers in salary, bonuses, and other expenses totaled $3,895,000.

The $5.6 million expansion in sales force accounts for approximately 35 employees paid $160,000 each. Coincidentally, these employees are many of the same ones which have been eliminated in Questcor's new strategy in 2007 to cut costs. From my viewpoint, it seems that Questcor invested $5.6 million to leverage their position as the sole source for Acthar to patients and to justify an outrageous increase in price to maintain the financial viability of the drug company.

Selling, general and administrative expense for the year ended December 31, 2007 was consistent with selling, general and administrative expense for the same period in 2006. Increased share-based compensation expense, costs associated with the reduction of our field organization and the departure of our former Chief Executive Officer and an increase in management compensation were offset by lower sales and marketing headcount-related costs resulting primarily from the reduction of our field organization in the second quarter of 2007.

We incurred a total non-cash charge of $1.8 million for SFAS No. 123(R) share-based compensation for the year ended December 31, 2007. Of this amount, $1.5 million was included in selling, general and administrative expenses, an increase of $523,000 as compared to the same period in 2006. For the year ended December 31, 2007, management bonuses related primarily to our 2007 profitable results contributed to a $757,000 increase in bonus expense as compared to the same period in 2006. We recorded $272,000 of severance and other associated costs in the second quarter of 2007 related to the departure of our former Chief Executive Officer in May 2007. In addition, during the second quarter of 2007 we reduced our field organization from 45 sales representatives to 10 product service consultants and 3 medical science liaisons and incurred a one-time expense of $451,000 for severance benefits and other associated costs. We currently have 10 product service consultants and 4 medical science liaisons. The expenses associated with our medical science liaisons are included in Research and Development expense in the accompanying Consolidated Statements of Operations. Sales and marketing headcount-related costs for the year ended December 31, 2007 decreased by approximately $1.6 million as compared to the same period in 2006 due primarily to the reduction of our field organization in the second quarter of 2007.

We estimate that our selling, general and administrative expense (excluding non-cash SFAS No. 123(R) share-based compensation expense) for 2008 will be in the range of approximately $15.0 million to $17.0 million. We anticipate the addition of selective key new hires and investment in customer service and marketing initiatives. We estimate that our total non-cash SFAS No. 123(R) share-based compensation expense for 2008 will be approximately $4.5 million of which we estimate approximately $3.5 million will be incurred in selling, general and administrative expense. The increase from 2007 results from new option grants and higher non-cash SFAS No. 123(R) expense associated with our employee stock purchase plan.

What are Questcor's Total Assets (in millions)?

  • 2002: $12.766

  • 2003: $22.929

  • 2004: $28.173

  • 2005: $31.348

  • 2006: $29.635

  • 2007: $78.448

2007 increase $48.813 in total assets with net sales of $48.7 for H.P. Acthar Gel

From my October estimates:

Coincidentally, Questcor's total assets equal $24.024 million at the end of the 2nd quarter 2007. According to my math, this seems to be just about $5.6 million less than their stated total assets at the end of 2006.

If Questcor's new business strategy (raising the price of Acthar) is successful, they are well-positioned to significantly increase gross revenues while incurring no significant increase in Cost-of-Goods-Sold. Even if they are able to sell a limited supply of 5500 vials of Acthar at the full $23,000 price, while 'giving away' 4500 vials, their gross revenue would exceed $126.5 million, about 10 times their 2006 net product sales.

Interesting prediction because Questcor now estimates that - “if annual Acthar demand remains in the annualized range of 5,100 to 5,700 vials experienced since the implementation of the new Acthar strategy, we estimate that this would result in 2008 annual net sales of approximately $80.0 million to $89.0 million.” This forecast allows for the “estimate that Acthar gross sales resulting from our reported shipments will be reduced by approximately 30% related to Medicaid rebates and government chargebacks.”

Basically, all of the preceding analysis is to dispel the argument that Questcor was incurring such income losses necessary to justify the 1400% increase in price of H.P. Acthar Gel. What they incurred was an increase in recognition of high salaries, bonuses, and stock options awarded to directors and executives.

Ultimately, the patients who cannot afford the drug suffer and the health insurance system bears the burden only to pass it on to their customers in higher costs. Questcor states that they have given away $10 million worth of Acthar free to patients in need since the implementation of the new pricing strategy. This accounts for approximately 430 vials of drug which would cover 70-100 courses of treatment.

However, does a drug which costs less than $250 to manufacture really need to be marked up by $23,000?