Limit Subsidy for Expensive, Overprescribed Drug

pharmacists mortar

Target: Paul Spitalnic, Chief Actuary with the Centers for Medicare and Medicaid Services

Goal: Urge the Medicare program to impose strict limits on reimbursement for H.P. Acthar Gel and to instead encourage less expensive, clinically proven treatment options

When patients seek professional advice from their doctors they might expect that advice to be based on up-to-date medical research and the treatments proven most effective. Too often sway from giant pharmaceutical companies directly impacts the options presented to patients. A particularly glaring example is that of the drug H.P. Acthar Gel, prescribed to a relatively small number of people at a cost to taxpayers of more than $141 million a year according to ProPublica.

Despite the fact that many experts have found less costly treatments to be at least as effective, doctors with close ties to Questcor, the drug’s manufacturer, have billed the Medicare program an exorbitant amount to cover its costs for elderly and disabled patients. ProPublica reports that a five-dose vial of Acthar costs $32,000–a price tag dubbed “actually…pretty inexpensive” by one executive now involved in a mega-merger with Questcor.

Because of when Acthar first appeared on the market, manufacturers had to prove only that the drug was safe and not that it was also effective. After acquiring Acthar Questcor aggressively marketed it to treat as many as 50 diverse conditions. Without any limitations imposed by Medicare doctors with a vested interest in the company have essentially forced a subsidy on the backs of taxpayers. Among all doctors prescribing the drug to Medicare patients, the top four have worked for Questcor as promotional speakers or researchers…or both.

This conflict of interest is both fiscally and ethically irresponsible. While Medicare can’t guarantee the priorities of all doctors, it can better regulate how drug costs are reimbursed and look after patients’ wellbeing by reimbursing only those treatments proven to be effective. Call on the program to impose strict limitations on its subsidy for expensive and questionably effective drugs, such as Acthar.


Dear Mr. Spitalnic,

Questcor Pharmaceuticals received a de facto Medicare subsidy of $141 million for prescriptions of its H.P. Acthar Gel product in 2012 alone. Several doctors at the top of the list for prescriptions of the drug to Medicare patients have worked as researchers and promotional speakers for the company. Many medical experts have stopped prescribing Acthar because of its hefty price tag ($32,000 for a five-dose vial) and questionable effectiveness. Why, then, does Medicare lack any limitations on reimbursing the drug’s costs?

Prior to Questcor’s “promotional push” the drug was used mainly to treat severe muscle spasms in infants, according to ProPublica. The company has since urged its use to treat dozens of conditions, without having to demonstrate its effectiveness because of when it was initially approved for sale. Questcor also dramatically increased the price for consumers. The cost to Medicare has ballooned in recent years, from $7 million in 2008 to $141 million in 2012.

Numerous state Medicare programs have limited access to the drug, as has the United States military. It’s time for the federal government to intervene. I urge you and your colleagues to impose strict limitations on how and when the cost of expensive, questionably effective drugs like Acthar are reimbursed by the Medicare program.


[Your Name Here]

Photo credit: PHenry via Wikimedia Commons

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