Pharma Company Forced To Backtrack After Suddenly Raising Drug’s Price 20-Fold

BY SAM P.K. COLLINS SEP 22, 2015 11:20AM

Amid outrage about sudden price hikes of specialty drugs, a company has reneged on its recent acquisition of a tuberculosis medication, a deal that would have increased the cost of the treatment more than 20-fold. Just three weeks after purchasing the rights to the drug, Rodelis Therapeutics has agreed to return the medication to the nonprofit that previously owned it.

The medicine, named Cycloserine, treats a form of tuberculosis that’s resistant to multiple drugs usually used to treat it — in other words, a serious form of the ailment. There are nearly 90 cases of drug-resistant tuberculosis annually in the United States.

Last week, Rodelis Therapeutics, the company at the center of the controversy, defended its decision to increase the price of the tuberculosis drug, saying it needed to invest and ensure the drug maintained its effectiveness. But the Purdue Research Foundation, the Indiana nonprofit that sold the drug to Rodelis, remained unconvinced, taking back Cycloserine on Monday.

“We discovered literally on Thursday the strategy that had been undertaken [by Rodelis],” Dan Hasler, president of the Purdue Research Foundation, told the New York Times. “We said this was not what we had intended.”

The price of the drug, originally $500 for 30 capsules, would have been $10,800 under the new arrangement with Rodelis. That meant patients would shell out more than $500,000 for the full course of treatment, a situation that threatens access to the lifesaving treatment. Public health officers said the price hike would burden Medicaid agencies that would pay more than $780,000 in a two-year span. Under a new deal, Purdue now charges $1,050 for the batch — more than double than the original price, but relatively less than what Rodelis would have demanded.

Rising prescription drug costs have become a topic of heated discussion among lawmakers, patients, and presidential candidates in recent months. In 2014, spending on medicine increased by 13 percent, totaling $374 billion. Experts and patient advocates largely blame pharmaceutical companies, saying they overprice name-brand drugs and place specialty drugs in a special categorization that allow them to bypass requirements in the Affordable Care Act. These strategies have come to light thanks to recent price hikes for generic, HIV, and Hepatitis C medications.

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http://thinkprogress.org/health/2015/09/22/3704183/drug-company-gives-back-rights/