Mallinckrodt’s (MNK) Acthar is one of the country’s most-expensive drugs and Express Scripts (ESRX) has provided distribution muscle for the drug. That appears to be changing, however. Monday Express Scripts announced it was selling United BioSource, a unit tied to helping distribute Acthar:
Express Scripts Holding Co. is trimming some of its ties to a $35,000-a-vial medicine made by Mallinckrodt Plc by finding a private-equity buyer for its unit that helps patients access some high-priced drugs.
Avista Capital Partners will buy Express Scripts’ United BioSource division, the firms said in a statement. United BioSource’s website says it helps “maximize product access and commercialization,” helps drug companies “overcome access and adherence challenges” and provides drug testing services.
United BioSource also runs a program that gives away Acthar to patients who have a hard time affording it. How much in Acthar sales the unit represents is unclear.
The Situation
Per Business Insider, from 2001 to today the price of the Acthar increased from $748 per vial to $40,000. Most of those price increases came after Questcor acquired the drug in 2001. Mallinckrodt continued price increases after it acquired Questor in 2014. It likely had to in order to justify the $5.6 billion acquisition. Of the drugs reimbursed by Medicare/Medicaid it is considered one of the most expensive.
Citron’s Andrew Left has criticized the drug for its ineffectiveness for illnesses outside of infantile spasms which it was originally indicated for. Earlier this year Citron suggested an alliance between Express Scripts and Mallinkrodt was helping to keep prices high for Acthar by convincing employers and insurers to pay for its use beyond infantile spasms. These claims appeared to have fallen on deaf ears. Something might have changed in Q3 2017 when Per Business Insider, fell 6% Y/Y. The drug still accounts for over 35% of the company’s total revenue, so as Acthar goes so goes Mallinckrodt.
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