FDA approval of ancient remedy sends price soaring

From CBS News:

Scott McGrath, 24, suffers from a painfully inflamed lining of the heart. Four months ago, the price of his medication suddenly went through the ceiling.

Sixty tablets of Colchicine used to cost him $34.83, and cost his insurance company nothing.

CBS News medical correspondent Dr. Jon LaPook reports the medication is now called Colcrys, and costs McGrath $62.16. "Almost doubled the amount I paid, and it cost my insurance company $244.74," McGrath said.

"The drug is no longer being sold by anyone but a single company, and that explains the price increase," McGrath said. 

Colchicine has been used to treat gout and other inflammatory conditions for thousands of years. How could one company gain a monopoly?

There are about 1,000 medications on the market that predate the existence of the Food and Drug Administration and therefore were never approved. 

Hundreds of thousands of people take Colchicine each year. The FDA said over the past 40 years, 169 deaths have been linked to the medication. A company called URL Pharma decided it would take the ancient drug, sold for 10 cents a pill, and test it as part of an FDA program to either approve these drugs or get them off the market.

Unlike companies that develop drugs from scratch and study thousands of patients for years, URL Pharma started with a pre-existing drug. Its research did clarify safety and dosing information. In return for the studies, the FDA granted URL exclusive rights to sell the medication.

"The reward that they got seems far out of proportion to the work that they did," said Dr. Edward Fundman, a rheumatologist who's been prescribing Colchicine for 30 years.

Fundman said the conversations among his colleagues was, "Just outrage that a company could take advantage of this FDA process and basically appropriate the drug for its own purpose. Even if a patient's not paying the full price out of pocket, their insurance company's paying it. Medicaid and Medicare have to pay for it. We're all paying for it."

IMS Health gave CBS News the number of Colchicine prescriptions nationwide. Add it all up and the cost of URL's price hike - over just one year - could exceed half a billion dollars.

URL's exclusive right to Colchicine for the most common indication - gout - expires next July. There are about 1,000 other unapproved medications currently on the market. Since the FDA does not control drug pricing, there's little to stop similar price hikes from happening again.

Posted: 10/11/2011 12:38:00 PM

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