Mallinckrodt Pharmaceuticals (NYSE:MNK) issued a response today to Sen. Claire McCaskill (D-Mo.) and her probe into the company’s pricing strategies for its injectable pain-killer, Ofirmev.
McCaskill wrote to the company at the end of May, suggesting that that the company’s price increases could have cost hospitals millions and may have pushed healthcare practitioners to use cheaper painkillers, including highly addictive opioids.
Today Mallinckrodt responded to her questions, outlining the context surrounding its price increase for Ofirmev.
The company acquired Ofirmev in March 2014 when it bought Cadence Pharmaceuticals. At the time, the drug had “for several years been losing tens of millions of dollars annually”, Mallinckrodt said, and that to “stabilize Ofirmev’s financial situation” it decided to raise the drug’s list price from $14.75 to $35.40 per vial.
Patients who are undergoing surgery for which Ofirmev is applicable are traditionally prescribed less than 4 vials, Mallinckrodt pointed out, which totals $150 in cost, not including discounts.
The company also acknowledged the senator’s reference to BJC Healthcare, a hospital system that discontinued its use of Ofirmev after the company raised its list price in 2014. McCaskill wrote in her initial letter that BJC estimated that it would have incurred an extra $2.2 million in annual expense related to the company’s price hike.
But Mallinckrodt said that BJC’s decision to stop using Ofirmev did not cause them to increase use of opioids in their surgical department – and the company said that BJC has confirmed this with the senator’s staff.
Mallinckrodt added that it expects to meet with senior-level officials at BJC in the next 90 days.
When McCaskill wrote to the company, she pointed out that Ofirmev sales dropped after its price went up in 2014 and suggested that the drop in sales could have meant that healthcare providers pursued other cheaper, more addictive pain-relievers in place of Ofirmev. But Mallinckrodt described the drop in sales as “temporary but significant” and added that the product’s sales have fully recovered to pre-2014 levels.
The company also said that it has invested in efforts to demonstrate Ofirmev’s value, conducting 6 retrospective health economic and outcomes research studies. Mallinckrodt referenced an analysis of health economic data that showed that use of Ofirmev in combination with a 1-level reduction in opioid use was tied to shorter hospitals stays and lessened opioid-related complications and related costs for the treatment of acute surgical pain.
“To truly make an impact on opioid abuse, all stakeholders must better understand the various interrelated causes and contributors to the problem, and work together to address all of them in a comprehensive, thoughtful manner,” Mallinckrodt wrote. “We continue to work to be part of the solution.”
