For a dad whose infant son was afflicted with a rare seizure disorder, a drug invented in 1952 was indispensable for his boy. It was also indispensable to executives at the pharmaceutical firm that acquired the drug in 2014 — not because it was a cure, but because it was a "cash cow," according to documents released at a House hearing Thursday.
The firm, Mallinckrodt Pharmaceuticals, got ahold of the venerable drug called H.P. Acthar gel by buying the company that owned it before, Questcor, for $5.8 billion in 2014.
According to the documents obtained and released by the House Oversight Committee in a broad probe of drug pricing practices, Mallinckrodt targeted Questcor primarily because of Acthar, a so-called orphan drug that helps 2,500 kids a year in the U.S. afflicted by infantile spasms.
Acthar was a "premium-priced product" with a "robust cash flow profile" that would help the company "achieve aspirational goals with a single transaction," according to the company's internal discussions.
The premium price when Mallinckrodt acquired the drug was $31,626 for a single vial, after Questcor had hiked it from around $100 in 2000, according to the committee investigation. Mallinckrodt continued the trend, hiking the price five times to ultimately reach $39,864.
