News from the Yahoo message board - Very telling
mastered: "QSC now a CASH COW with blockbuster drug in captive market."Read my previous posts for more information regarding Questcor's use of Orphan Drug Status and claims of Income Losses to justify the price increase from ~$1600 per vial to $23,265 per vial.
From the 3rd quarter earnings report:Demand by patients utilizing Acthar for infantile spasms (IS) and opsoclonus myoclonus syndrome (OMS) has remained at approximately the same levels experienced prior to the implementation of the new strategy.
Notice the lack of reference to MS patients. I can't speak for other MS doctors, but Acthar is off-the-table now for use in exacerbations in my neurologist's office directly due to the price increase. Solumedrol IV is the preferred drug anyway. But I'm sure that Questcor knows this already.
Questcor has also seen a positive pattern of insurance coverage and expanded use of the safety net programs [ie. NORD] for Acthar patients.
So...insurance companies are paying the 1500% increased price? Where's the cost control? Negotiated rates anybody? Out-of-pocket maximums or benefit limits? And if Questcor is not directly funding the safety-net programs 100% at NORD, then they are sucking resources away from other programs, or are draining the financial reserves of the patients.
As a result, Questcor is not aware of a single IS or OMS patient requiring Acthar that has been denied treatment.
Ahh...now doesn't that make you feel good? Not!
Being denied treatment is not the same as being denied coverage, being denied assistance, being denied reimbursement, or simply being denied the prescription in the first place. Perhaps doctors are choosing alternatives even if they have to be purchased from Canada.
BTW: Questcor moved the manufacturing of Acthar to Canada.
While the trend in ordering and insurance reimbursement has resulted in higher net sales, as Questcor expected, since the implementation of its new business model, overall unit demand for Acthar has decreased significantly.
Net sales of Acthar were $14.6 million and $21.8 million, respectively, for the three and nine month periods ended September 30, 2007 as compared to $3.8 million and $9.0 million for the same periods in 2006.In June 2006 Questcor submitted a Supplemental New Drug Application (sNDA) to the Food and Drug Administration (FDA) and is currently pursuing formal agency approval for Acthar in the treatment of IS. Previously, the FDA granted Orphan Designation to Acthar for the treatment of IS. As a result of this Orphan Designation, if Questcor is successful in obtaining FDA approval for the IS indication, Questcor will also qualify for a seven year exclusivity period during which the FDA is prohibited from approving any other ACTH formulation for IS unless the other formulation is demonstrated to be clinically superior to Acthar.
Ahh...the power of evidence-based medicine to provide market exclusivity and tie the government's regulatory hands.
On November 9, 2007, Questcor met with the FDA to further discuss its sNDA seeking approval of Acthar for the treatment of IS. At the meeting, the FDA concurred with Questcor’s suggested pathway to preparing a complete application for FDA review.
Shouldn't the original application have been complete? Come on.
Since the implementation of the new Acthar strategy, Questcor estimates that end user demand for Acthar has been 425 to 475 vials per month. Of this demand, Questcor estimates that approximately 30 percent of vials are used by patients covered by Medicaid and other government related programs.
Ok. Let's make some assumptions here and use 450 vials for demonstration purposes only.
$23,265 price per vial x 450 vials = $11.05 million
Plus 4 extra days at new price in August...maybe 65 vials = $1.51 million
Total net sales for Acthar in Q3 = $14.6 million
Net sales for Acthar in 8 weeks July/August = $2.0 million?
$2.0 million / $1600 price per vial = 1250 vials
So from ~625 per month demand down to ~450 per month, significant decrease AND Questcor was able to match 2006 total sales of $12.1 million in only one month.
Shouldn't the payors be concerned? I know the investors are happy.For periods after September 30, 2007, the amount of Medicaid rebates and government chargebacks that reduce Questcor’s net sales may result in minimal, if any, net sales revenue to Questcor from products used by Medicaid patients and certain government entities. As discussed above, Questcor has experienced a consistent level of ordering and insurance reimbursement for Acthar since the inception of the new strategy.
Good...Questcor will not be allowed to drain government funds in a greedy manner. But I'm still curious to know how the level of ordering and insurance reimbursement compares before and after the new strategy.
More interesting discussion from the Yahoo message board last night:
chopper: Keep in mind they STILL have not told the public why the FDA rejected their proposal last March, and what/if any outcome from the conversations they said the FDA requested. This company is not big on making information public.
jillp: Does it really matter today. It is about making money. It is time to get an advantage from positive news. the last year has been painful.