October 22, 2015
By Alex Keown, BioSpace.com Breaking News Staff
NEW YORK – Responding to a New York Times article that caused Irish drugmaker Horizon Pharmaceuticals ’ stock to drop more than five points this week, the Dublin-based company said it has no stake in any “specialty pharmacy” that doles out its medications.
The Times zeroed in on Horizon’s $1,500 price tag of its pain reliever Duexis, which it described as a combination of the generic equivalents of Motrin and Pepcid. According to the Times’ article, Horizon encourages physicians to submit prescriptions for the high-priced medication to a mail-order pharmaceutical company associated with Horizon. That pharmacy sends the medication to the patient and then directly deals with the insurance company – a practice called “prescriptions made easy.” The Times said the practice frees up doctors from having to worry about any reimbursement issues “that might otherwise discourage them from prescribing such an expensive drug.” Horizon told the Times if an insurance company refuses to pay for Duexis, the patient already has the drug and Horizon absorbs the cost. Additionally, the pharmaceutical company said patients receiving Duexis have co-pays of no more than $10. If the two generic equivalents were prescribed for pain, the Times claims the price would range between $20 and $40.
Since 2011, Horizon has increased the cost of Duexis about ten-fold, the Times said. Additionally, in 2013, Horizon acquired Vimovo, the main competitor to Duexis, and increased the cost nearly 1,200 percent. Both drugs are now about equally priced, the Times said.
In a response to the Times’ article, Horizon said any pharmacy that distributes its medication is independent of the parent company.
“Horizon does not own or have an ownership stake in any pharmacy and does not possess an option to purchase any pharmacy. In addition, the relationship with these pharmacies is non-exclusive where each of these pharmacies may also fulfill prescriptions for other drug manufacturers,” the company said in a statement.
The specialty pharmacies have been used for a while, most often to dispense costly treatments for cancer and rare genetic disorders. Ronny Gal, a pharmaceutical analyst at Bernstein, told the Times the specialty pharmacies began as a way to administer costly drugs “has been co-opted as a sales/marketing tool to drive the growth of minor differentiation standard retail drugs.”
The Times’ report on Duexis came on the heels of another expose of drug pricing by Canada-based Valeant Pharmaceuticals . The Times excoriated Valeant Pharmaceuticals for the amount the company spends on research and development versus the amount it spends on mergers and acquisitions after the Quebec-based company quadrupled the price on a 55-year-old drug that treats Wilson Disease, a genetic disorder. The Times highlights a 66-year-old retiree on Medicare who will now have to pay more than $1,800 out of pocket each month for the medication. Before the price increase he had to pay about $366 per month for the half-century old Cuprimine. After the price increase, the price per pill is about $260, the Times said.
According to a Deutsche Bank report, Valeant increased prices on its brand-name drugs an average of 66 percent, about five times more than its other competitors, the Times said. Valeant, the article says, spends only about three percent of sales generated revenue on research and development, “which it views as risky and inefficient compared with buying existing drugs.” That amount was about $246 million in 2014. The article compares that amount to 15 to 20 percent other companies spend on research and development.
In addition to the price increases, the Times said Valeant also engages in the “prescriptions made easy” practice with its own specialty pharmacy called Philidor Rx Services, based in Pennsylvania. Valeant, the Times said, purchased an option to acquire Philidor late last year.
