Mallinck­rodt just got its hand slapped for il­le­gal­ly pro­tect­ing an 85,000% price hike

The view from End­points

More than three years ago, Quest­cor paid No­var­tis $135 mil­lion to gain US rights to a ther­a­py that posed a di­rect threat to its Ac­thar drug fran­chise. It was the deal of the decade, block­ing a com­peti­tor that could have carved in­to a block­buster fran­chise. An­drew Pol­lack at The New York Times laid it all out in sim­ple terms in a venue that no one who cared about drug pric­ing could have missed.

There was al­so no doubt what the deal on Syn­ac­then De­pot — a syn­thet­ic ver­sion of Ac­thar — meant to Quest­cor, which had been jack­ing up the price of Ac­thar by an as­tro­nom­i­cal amount that helped jus­ti­fy Mallinck­rodt’s $5.6 bil­lion ac­qui­si­tion a year lat­er. Its stock jumped 15% when the news came down.

“We be­lieve the ac­qui­si­tion re­moves a key over­hang as a po­ten­tial com­peti­tor to Ac­thar is re­moved,” not­ed an­a­lyst Biren Amin at the time.

Over 15 years the price on Ac­thar has gone up 85,000%, ac­cord­ing to the FTC, which just won a $100 mil­lion set­tle­ment from Mallinck­rodt for il­le­gal­ly main­tain­ing a drug mo­nop­oly. To put that set­tle­ment in per­spec­tive, it’s the about same amount as the an­nu­al in­crease of Ac­thar net sales in fis­cal 2016, when the drug earned $1.16 bil­lion — mak­ing it eas­i­ly the biggest drug in their port­fo­lio.

When Mallinck­rodt bought Quest­cor, Ac­thar cost $28,000 a vial. To­day, a lit­tle more than two years lat­er, the FTC says it’s $34,000 a vial.

Mallinck­rodt, for its part, has been scram­bling to shed a rep as a price grout­ing bio­phar­ma com­pa­ny, joined the pric­ing pledge that Al­ler­gan’s Brent Saun­ders start­ed, vow­ing to keep an­nu­al price hikes to sin­gle dig­its.

That would still al­low a price hike on Ac­thar that would equal what the FTC is get­ting in the set­tle­ment.

The com­pa­ny is al­so swear­ing to dou­ble its R&D bud­get, which hit $262 mil­lion in its last fis­cal year.

Per­haps the biggest penal­ty the com­pa­ny faces is an or­der to sell the li­cense on the com­pet­ing ther­a­py in a mat­ter of months. That su­per­vised trans­ac­tion will set up an even­tu­al com­peti­tor, but it will not nec­es­sar­i­ly do any­thing to sig­nif­i­cant­ly re­duce the price of the ther­a­py, as even a dis­count stick­er could still com­mand a price wild­ly high­er than the old list price for Ac­thar.

De­vel­op­ment al­so can take time, and the agree­ment does noth­ing im­me­di­ate to re­duce the cost of the drug.

Iron­i­cal­ly, Mar­tin Shkre­li is get­ting cred­it as the whis­tle blow­er in the case, which oc­curred when short sell­ers were try­ing every­thing to top­ple Quest­cor’s stock price. (Shkre­li’s Retrophin was out­bid on the No­var­tis drug, which he had his own plans for.) Shkre­li knows a thing or two about price goug­ing on old drugs, which he prac­ticed at Retrophin and Tur­ing. He’s now pri­mar­i­ly oc­cu­pied with a fed­er­al fraud case, which is com­ing up for tri­al this sum­mer.

But the fed­er­al case has noth­ing to do with price goug­ing Dara­prim or any oth­er drug. Shkre­li’s 5,000% price hike re­mains in force, as it was com­plete­ly le­gal. And he con­tin­ues to seek out high pro­file in­ter­views that al­low him to de­fend the price.

For now, goug­ing re­mains a lu­cra­tive and large­ly non-threat­en­ing en­deav­or which the feds have lit­tle pow­er to con­trol. It re­mains to be seen if new in­com­ing Trump ad­min­is­tra­tion will change that. PEO­TUS fa­mous­ly ac­cused phar­ma com­pa­nies with “get­ting away with mur­der” on drug prices.

Mallinck­rodt and the FTC helped make that case for him.

Health­care Dis­par­i­ties and Sick­le Cell Dis­ease

In the complicated U.S. healthcare system, navigating a serious illness such as cancer or heart disease can be remarkably challenging for patients and caregivers. When that illness is classified as a rare disease, those challenges can become even more acute. And when that rare disease occurs in a population that experiences health disparities, such as people with sickle cell disease (SCD) who are primarily Black and Latino, challenges can become almost insurmountable.

So what hap­pened with No­var­tis' gene ther­a­py group? Here's your an­swer

Over the last couple of days it’s become clear that the gene therapy division at Novartis has quietly undergone a major reorganization. We learned on Monday that Dave Lennon, who had pursued a high-profile role as president of the unit with 1500 people, had left the pharma giant to take over as CEO of a startup.

Like a lot of the majors, Novartis is an open highway for head hunters, or anyone looking to staff a startup. So that was news but not completely unexpected.

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David Meek, new Mirati CEO (Marlene Awaad/Bloomberg via Getty Images)

Fresh off Fer­Gene's melt­down, David Meek takes over at Mi­rati with lead KRAS drug rac­ing to an ap­proval

In the insular world of biotech, a spectacular failure can sometimes stay on any executive’s record for a long time. But for David Meek, the man at the helm of FerGene’s recent implosion, two questionable exits made way for what could be an excellent rebound.

Meek, most recently FerGene’s CEO and a past head at Ipsen, has become CEO at Mirati Therapeutics, taking the reins from founding CEO Charles Baum, who will step over into the role of president and head of R&D, according to a release.

Jacob Van Naarden (Eli Lilly)

Ex­clu­sives: Eli Lil­ly out to crash the megablock­buster PD-(L)1 par­ty with 'dis­rup­tive' pric­ing; re­veals can­cer biotech buy­out

It’s taken 7 years, but Eli Lilly is promising to finally start hammering the small and affluent PD-(L)1 club with a “disruptive” pricing strategy for their checkpoint therapy allied with China’s Innovent.

Lilly in-licensed global rights to sintilimab a year ago, building on the China alliance they have with Innovent. That cost the pharma giant $200 million in cash upfront, which they plan to capitalize on now with a long-awaited plan to bust up the high-price market in lung cancer and other cancers that have created a market worth tens of billions of dollars.

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Who are the women su­per­charg­ing bio­phar­ma R&D? Nom­i­nate them for this year's spe­cial re­port

The biotech industry has faced repeated calls to diversify its workforce — and in the last year, those calls got a lot louder. Though women account for just under half of all biotech employees around the world, they occupy very few places in C-suites, and even fewer make it to the helm.

Some companies are listening, according to a recent BIO survey which showed that this year’s companies were 2.5 times more likely to have a diversity and inclusion program compared to last year’s sample. But we still have a long way to go. Women represent just 31% of biotech executives, BIO reported. And those numbers are even more stark for women of color.

When ef­fi­ca­cy is bor­der­line: FDA needs to get more con­sis­tent on close-call drug ap­provals, agency-fund­ed re­search finds

In the exceedingly rare instances in which clinical efficacy is the only barrier to a new drug’s approval, new FDA-funded research from FDA and Stanford found that the agency does not have a consistent standard for defining “substantial evidence” when flexible criteria are used for an approval.

The research comes as the FDA is at a crossroads with its expedited-review pathways. The accelerated approval pathway is under fire as the agency recently signed off on a controversial new Alzheimer’s drug, with little precedent to explain its decision. Meanwhile, top officials like Rick Pazdur have called for a major push to simplify and clarify all of the various expedited pathways, which have grown to be must-haves for sponsors of nearly every newly approved drug.

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Jay Bradner (Jeff Rumans for Endpoints News)

Div­ing deep­er in­to in­her­it­ed reti­nal dis­or­ders, No­var­tis gob­bles up an­oth­er bite-sized op­to­ge­net­ics biotech

Right about a year ago, a Novartis team led by Jay Bradner and Cynthia Grosskreutz at NIBR swooped in to scoop up a Cambridge, MA-based opthalmology gene therapy company called Vedere. Their focus was on a specific market niche: inherited retinal dystrophies that include a wide range of genetic retinal disorders marked by the loss of photoreceptor cells and progressive vision loss.

But that was just the first deal that whet their appetite.

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Lat­est news: It’s a no on uni­ver­sal boost­ers; Pa­tient death stuns gene ther­a­py field; In­side Tril­li­um’s $2.3B turn­around; and more

Welcome back to Endpoints Weekly, your review of the week’s top biopharma headlines. Want this in your inbox every Saturday morning? Current Endpoints readers can visit their reader profile to add Endpoints Weekly. New to Endpoints? Sign up here.

Next week is shaping up to be a busy one, as our editor-in-chief John Carroll and managing editor Kyle Blankenship lead back-to-back discussions with a great group of experts to discuss the weekend news and trends. John will be spending 30 minutes with Jake Van Naarden, the CEO of Lilly Oncology, and Kyle has a brilliant panel lined up: Harvard’s Cigall Kadoch, Susan Galbraith, the new head of cancer R&D at AstraZeneca, Roy Baynes at Merck, and James Christensen at Mirati. Don’t miss out on the action — sign up here.

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FDA hands ac­cel­er­at­ed nod to Seagen, Gen­mab's so­lo ADC in cer­vi­cal can­cer, but com­bo stud­ies look even more promis­ing

Biopharma’s resident antibody-drug conjugate expert Seagen has scored a clutch of oncology approvals in recent years, finding gold in what are known as “third-gen” ADCs. Now, another of their partnered conjugates is ready for prime time.

The FDA on Monday handed an accelerated approval to Seagen and Genmab’s Tivdak (tisotumab vedotin-tftv, or “TV”) in second-line patients with recurrent or metastatic cervical cancer who previously progressed after chemotherapy rather than PD-(L)1 systemic therapy, the companies said in a release.