By Christopher Irons for GeoInvesting

Mallinckrodt’s Acthar Gel may turn out to be the most appalling story in all of price gouging and it has gone completely unnoticed by politicians and the main stream media

Price of the drug has gone from $40 per vial in 2001 to $28,000, an over 70,000% increase

A good portion of Mallinckrodt’s sales come from this 64 year old drug that has skirted modern FDA trials, recently failed a pilot study, and lacks double blind clinical trials versus (a much cheaper) synthetic

The company is in the same district as Sen. Claire McCaskill and is a donor to her campaign – perhaps this has helped them avoid scrutiny thus far

When the mainstream media and the public learn the truth about Acthar, I predict outrage that will make the Mylan saga look like a fairy tale

The Most Appalling Pharmaceutical Story in History?

Mallinckrodt’s Acthar Gel may turn out to be one of the most appalling pharmaceutical stories in history. The nearly 64-year-old drug now reportedly sells for 70,000% more than it was being offered for in 2001 and has little to no randomized double blind clinical data available for most indications for which it is being prescribed. This isn’t just price gouging; it’s price gouging on a product that has once already once been discontinued, recently failed its one company sponsored pilot study and hasn’t been proven to have efficacy in randomized double blind clinical trials versus synthetic and placebo. It’s a story that makes the EpiPen saga look like a fairy tale.

If there has been one running theme to this election cycle so far, it has been keeping pharmaceutical companies in check and holding their respective feet to the fire when it comes to egregious price gouging and abuse of insurers and government subsidies.

But the most odious stench coming from the pharmaceutical industry has yet to be realized by the public, the mainstream media, and the government. Mallinckrodt is riding the coattails of a drug called H.P. Acthar Gel that, as stated, has little to no clinical data results for many of its main indications, is frowned upon by insurers, and has never been tested against a synthetic or placebo for most indications.

From $40 Per Vial to $28,000 Per Vial in 15 Years

The drug used to belong to Sanofi Aventis, who was selling it for about $40 per vial in 2001, according to FiercePharma. Questcor Pharmaceuticals acquired the drug in 2001 for $100,000 and Acthar promptly turned Questcor Pharmaceuticals into a “one drug business” that they ultimately sold to Mallinckrodt for $5.6 billion. Questcor, the original owners of H.P. Acthar Gel, raised the price from $1,650 a vial to $23,000 a vial in 2007, according to the New York Times. They built a multi-billion dollar business around one drug that they bought for $100,000. FiercePharma reports that Acthar now costs $205,681 per U.S. patient per year.

But that’s not all.

Mallinckrodt is marketing the drug for indications where it has “little evidence that it is more effective than alternatives that are far cheaper,” according to the New York Times.

Moreover, the tiny “orphan” market soon became much bigger. Before long, Questcor began marketing the drug for multiple sclerosis, nephrotic syndrome, and rheumatologic conditions, even though there is little evidence that Acthar is more effective for those other conditions than alternatives that are far cheaper. And the company did so without being required to prove that the drug actually works. That is because Acthar was approved for use in 1952, before the Food and Drug Administration required clinical trials to show a drug is effective for a particular disease. Acthar is essentially grandfathered in.

Acthar, the drug in question, was approved by the FDA in 1952 — Harry Truman was president, the Dow Jones was at around 275 and Mickey Mantle had just hit his first career grand slam.

A lot has happened in those 64 years, including the development of synthesizing steroids like prednisone. These synthetics “became the treatment of choice” for the same health problems that Acthar was treating at the time. Acthar was actually discontinued in 1995, when the FDA found quality control problems at the factory manufacturing the drug, according to the New York Times. It was reported that Aventis then only manufactured the drug for a small group of patients that wanted it for infantile spasms. It was a money-losing drug that was made in limited supply for infantile spasms or acute MS exacerbations. Aventis helped Questcor set up facilities to produce the drug after they purchased it, according to the New York Times.

The rest of the story on how Questcor became a billion dollar business is history.

So Questcor began hiring sales representatives to promote the drug for that use. Then it hired a sales force to promote the drug as a treatment for nephrotic syndrome, a kidney injury that can lead to kidney failure. In June [of 2012], it began selling to rheumatologists. For all these diseases, there are cheaper alternatives. Oral prednisone, which might be used for some rheumatological diseases, can cost $10 a month. Intravenous steroids, used to treat multiple sclerosis flares, cost several hundred dollars. Because Acthar was approved for these conditions decades ago, Questcor has not had to do large clinical trials to show that the drug works. It has paid for some small studies, mainly by individual doctors, who then publish a paper that the sales force can present to doctors.

The lack of double blind clinical trials on Acthar versus synthetic and placebo could be costing the healthcare system billions of dollars.

Mallinckrodt did recently run one “eight-week, double-blind, randomized placebo-controlled trial that assessed the clinical efficacy of repository corticotropin injection (RCI) in 38 patients with persistently active SLE involving skin and/or joints despite moderate dose corticosteroids” in 2015.

The study failed to meet its primary endpoint.

But that hasn’t stopped Mallinckrodt from aggressively continuing to market Acthar for Lupus flares and maintenance, among more than 15 other indications.

Batches Tested in 2014 Reportedly Showed “Little to No” Active Ingredient

The active ingredient in Acthar is supposed to be adrenocorticotropic hormone (“ACTH”). In 2014, financial research firm Citron Research claimed to have performed independent lab testing on “at least two separate batches” of Acthar and produced a report claiming that “there is almost no detectable ACTH in any of the Acthar” they tested. They submitted their results to the FDA who have, to date, not taken public action.

Even the chemical makeup of the drug as its being sold, along with its potential side effects, seem to be up in the air.

When questioned about why Acthar isn’t at risk from synthetics, former Questcor CEO Don Bailey seems to allude that the drug contains some sort of trade secret that can’t be disclosed:

Yet Questcor is now arguing that its studies show that Acthar, despite the “highly purified” in its name, actually contains other substances from the pig pituitary glands that account for some of its effectiveness. The company does not intend to say what those other ingredients are, thus making it extremely hard for a generic company to copy Acthar. “Coca-Cola is not going to tell you what Coke contains, either,” Mr. Bailey says.

It wasn’t until 2013 that Questcor really talked about the adverse effects of the drug, noting that “1,022 patients reported 3,100 adverse events while on Acthar” between January 1, 2011 and December 31, 2013. According to the New York Times, “the total number of events in 2013 reported by patients, who can experience multiple ill effects, was almost 14 percent of prescriptions, up from 9.1 percent in 2011.”

Perhaps all of this controversy is why Questcor and Mallinckrodt have both been the focus of regulators for some time. Questcor, the company Mallinckrodt acquired to obtain Acthar, received subpoenas from the United States Attorney’s Office for the Eastern District of Pennsylvania in 2012 — an investigation Mallinckrodt says they’re still “cooperating” with four years later in their last 10-K.

Where’s the Outrage from the Public, Government and Main Stream Media?

Why have we not seen action from outspoken Senators, like Clair McCaskill, who seemingly have no issues taking on other pharmaceutical companies guilty of far less? Could it be because Mallinckrodt (along with Express Scripts) is a campaign contributor to the Senator and Mallinckrodt has its U.S. Headquarters in her district? Watching what is happening with the Mylan scandal while this issue goes coincidentally unnoticed has us wondering: Will Mallinckrodt ever get the government and public scrutiny it deserves?