Front-line tuberculosis doctors in Canada were recently sticker shocked that the price of an essential medication for drug-resistant TB went through the roof for no apparent reason.

Cycloserine is a critical drug used to treat a rare and dangerous form of multidrug-resistant tuberculosis.

Overnight in North America, cycloserine went from $15 US per pill to $360 US.

"Everyone in the TB community in North America has been going crazy over the last week or so when they realized the price had gone up by over 2,000 per cent," said Amir Attaran, a professor of law and medicine at the University of Ottawa who specializes in drug policy.

It is people looking to make a quick buck. — Prof. Amir Attaran

It's part of a trend in the pharmaceutical industry of small companies buying up old, off-patent drugs and jacking up the price.

"It's people coming from hedge funds," said Attaran. 'It is people looking to make a quick buck."

The patent on cycloserine expired long ago. Elsewhere in the world, it sells for 22 cents US a pill. It is considered an essential medicine by the World Health Organization.

The drug company Lilly developed cycloserine in the 1960s. In 2007, the company gave the North American rights to sell the drug to the Chao Center, a non-profit associated with Purdue University in Indiana.

Last month, the Chao Center transferred the rights to Rodelis Therapeutics, which raised the price. On Monday following a New York Times story centred on the price increase for another infectious disease drug, the price fell of cycloserine fell to $35 US per pill.

The two organizations recently said the rights to the drug will be transferred back to the non-profit Chao Center.

Dr. Dina Fisher, medical director of the Calgary Tuberculosis Centre, originally thought an email about the price increase of cycloserine must have been a typo. (CBC)

Ottawa urged to regulate

Dr. Dina Fisher, medical director of the Calgary Tuberculosis Centre, currently has two patients on the medication.

Fisher said when she originally saw an email on the 2,000 per cent increase, she thought it was a typo.

"I was shocked at the percentage increase in a drug that's really essential for some of our patients," Fisher said.

People with multidrug-resistant TB typically take five or six drugs and are treated for 18 to 24 months, she said. They take two to three tablets of cyloserine a day.

Attaran is writing up what happened for the medical journals because he thinks it's important for doctors to know that a medicine a patient depends on to live can increase in price so much and so quickly.

"Ottawa needs to regulate the price of those unpatented medicines … to prevent this happening again," he said.

Deal being reversed

In an email to Attaran which was shared with CBC News, Lilly vice president Dr. Evan Lee said the company gave up all rights over cycloserine "including any pricing or access decisions" in its 2007 deal with the Chao Centre.

"The subsequent transfer to third parties is a decision over which we do not have control," Lee wrote.

The Chao Center, for its part, said in a statement to CBC News that, after the price of cycloserine went up, "it became clear that the Rodelis strategy was not consistent with the Chao Center's expectations or vision."

The Chao Center and Rodelis now appear to be reversing the deal.

The latter said in an email late Monday that both organizations "agreed last week that it is in the best interests of the patients to return the rights of Cycloserine to The Chao Center."

If it weren't for all of the negative publicity, Attaran says he thinks the original, 2,000 per cent price hike would still stand.

There have been multiple problems with access to TB medications in Canada, which can lead to spread of disease, Fisher said. That's why it's important the drug supply is protected and not subjected to random increases in cost that the health-care system can't continue to take, she said.

In Canada in 2012, nine cases of multidrug resistant TB were reported, according to the Public Health Agency of Canada.