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The Obscure Drug With a Growing Medicare Tab

Posted on Aug 5, 2014

By Charles Ornstein, ProPublica

(Page 3)

Insurers Begin to Restrict Access

In the past few years, many commercial and public health plans have begun to take a less openhanded approach to Acthar than Medicare.

Insurers such as Aetna, Cigna and UnitedHealthcare have moved to restrict access to the drug, citing the lack of evidence that it works better than other treatments for many conditions. At a recent conference hosted by Sanford C. Bernstein, Dr. Ed Pazella, Aetna’s national medical director for pharmacy policy and strategy, explained the shift on Acthar.

Questcor’s “combination of aggressive marketing and aggressive price increases finally caused it to become a line item that a finance guy looked at and said: ‘What the hell are we paying for this? Why? What is it?’ And that’s when we started looking at what’s our policy around this stuff,” Pazella said. (A recording of Pazella’s remarks was shared with ProPublica.)

Such efforts are consistent with a broader push to control health costs that has led to a significant slowing in the rate at which those costs have risen in the last five years.


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Some public programs have come to similar conclusions about Acthar.

Last year, after seeing a dramatic rise in Acthar prescriptions, the military’s health system restricted the drug’s use to infantile spasm, the condition it was mainly prescribed for before Questcor’s promotional push. Research showed that too many prescriptions had been written for patients with conditions “for which there is little supportable evidence” that Acthar is effective, the Defense Health Agency spokesman Kevin Dwyer said in an email.

Acthar usage has plummeted since the new rules went into effect. Tricare covered 725 prescriptions for the drug last year, at a cost of $34.4 million (before rebates), according to data obtained under the Freedom of Information Act. Through the first five months of this year, it covered only 91 prescriptions.

Some state Medicaid programs for the poor have also limited Acthar’s use to infant seizures. Despite these restrictions, Medicaid’s spending on Acthar rose sharply last year after the government dropped rules requiring Questcor to give back almost the entire cost of the drug to states in rebates.

In his written response to questions, Albright, the Medicare spokesman, did not address whether Acthar’s rising cost had caught the attention of Medicare officials. The agency declined an interview request. The health insurers that administer Medicare’s drug program can impose restrictions, he said, but they are not required to do so. Some insurers’ rules are more restrictive than others.

Jonathan Blum, until recently the principal deputy administrator at the Centers for Medicare and Medicaid Services, said in an interview that the time may have come for Congress to rethink Medicare’s limited role in assessing drugs and the legal prohibition against Medicare’s negotiation of drug prices.

“I personally think over time, the program is going to face more demands by Congress and the public to intervene, or at least use moral persuasion, to challenge or counter-pricing strategies that don’t serve the best interests of the program,” he said.

Such changes would most likely face stiff opposition. When the Centers for Medicare and Medicaid Services tried to change the rules governing Part D this year to allow restrictions on certain categories of drugs, backlash from the pharmaceutical industry and patient groups was so fierce that the agency was forced to back down.

Gal, the analyst at Sanford C. Bernstein, said Acthar’s story was “just an extreme case of the fundamental tensions in the system,” with cost on one side and demand on the other. “At the end of the day, there’s a limited amount of money in the system, and medicine is being rationed.”

For more information about Medicare’s prescription drug program, read our story about how the program failed to monitor providers with questionable prescription patterns.

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