BIG PHARMA POLITICS: Consumers pressure politicians to do something about rising drug prices. Read More
Rockford, Illinois, mayor Larry Morrissey set out to understand why his city was bleeding money. The answer: one drug’s high cost.
The city pays for employee health care. To cover the cost of Acthar, which treats infantile spasms, for just two babies, Rockford paid nearly $500,000, squeezing city spending on essential services like police and fire, according to a recent report on 60 Minutes.
Acthar isn’t a new drug – it’s been around since 1952. But drug-makers raised the price from $40 a vial in 2001 to $40,000 today – an increase of 100,000 percent. Making matters worse, the drug-maker Mallinckrodt, which bought the drug from Questcor in 2014, also bought the only competitor for Acthar but shelved it, according to the 60 Minutes report.
The Federal Trade Commission unmasked the practice, finding that Mallinckrodt violated antitrust laws to “maintain extremely high prices for Acthar,” 60 Minutes reported.
That competitor drug? It sells for just $33 a vial in Canada.
Mallinckrodt settled with the FTC and paid $100 million. It’s a mere drop in the bucket compared to the billion dollars the company makes annually on Acthar.
As for Rockford, it’s hired an attorney to sue Mallinckrodt for price fixing. The drug company denies wrongdoing, blaming the drug’s previous owner.
Meanwhile, the drug’s cost remains sky high for families that need the life-saving medication for their babies.
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