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In 2015, two small children of Rockford employees were treated with Acthar, a drug that's been on the market since 1952. It's used to treat a rare and potentially fatal condition called infantile spasms that afflicts about 2,000 babies a year.
The drug works – it's considered the gold standard for infantile spasms. But as he discovered it wasn't always so expensive. In 2001, Acthar sold for about $40 a vial. Today: more than $40,000. An increase of 100,000 percent. He wanted to know how that could've happened. But for two years he kept running into a brick wall.
Surely, there must be competition for a drug used since 1952, right? Well, yes, but:
To keep the price high, the FTC found that they did something else: they bought another drug that was Acthar's main competitor, a drug called Synacthen, that's been sold in Europe and Canada for years. For how much?
Don Haviland: Synacthen cost $33 in Canada. $33.
Lesley Stahl: The Acthar company bought the other drug?
Don Haviland: The competitive drug, yes. That's anti-trust, and that's why the Federal Trade Commission went after them. Because they took the only competitive product, paid a lot of money for it, and put it on the shelf.
Lesley Stahl: So they bought their only competitor, and then never sold it?
Don Haviland: Correct.
And, once you have a monopoly, just expand the market:
We were able to find an old press release that said as much: the company was going to "...Expand our existing markets (and) find new therapeutic uses for Acthar." And so the company began to market the drug for several chronic conditions like rheumatoid arthritis that affect adults.
Dr. Peter Bach: What's shocking to me is half a billion dollars spent on this drug for seniors where there's no evidence that it's the right drug for any of them.
But, it's the right one for the bottom line.
It turned out to be ineffective for RA, but cost Medicare some half billion dollars anyway.
There you have it: A perfect example of why medical care in the USA costs double and triple what it costs other nations. Just thought you might want to know.
Source: 60 minutes