After 1400% Price Hike, Generic Cancer Drug in Spotlight

Megan Brooks

April 10, 2018

NextSource Biopharmaceuticals, a subsidiary of Tri-Source Pharma, has increased the price of the 40-year-old, off-patent cancer drug lomustine (Gleostine) by 1400% over the last 4 years, and three US senators want to know why.

Lomustine was first approved by the US Food and Drug Administration (FDA) in 1976. It is approved for treatment of glioblastoma and Hodgkin's lymphoma and is also used off-label to treat other forms of cancer.

Senators Susan Collins (R-ME), Claire McCaskill (D-MO), and Catherine Cortez Masto (D-NV) have sent a letter to Robert DiCrisci, the CEO of Tri-Source Pharma, asking him to explain the huge price hike.

"[W]e want to learn more about NextSource Biotechnology LLC's acquisition of the rights to sell lomustine, a prescription drug used to treat brain tumors and Hodgkin lymphoma," Senators Collins, McCaskill, and Cortez Masto wrote. "In particular, we would like to better understand the factors contributing to the rising cost of lomustine, which has increased nearly 1,400 percent since 2013 for the highest dose."

In response to media coverage of the lomustine price hikes, NextSource issued a statement saying the subject of drug pricing is "an important one" and is "more complex than many realize." Specifically for lomustine, the manufacturer said the price reflects several factors:

  • "Substantial" increases in the cost of raw materials, including a key manufacturing component;

  • The cost of providing the drug at "little to no cost" to the federal government for use in Medicaid and the government drug discount program for as little as 5 cents per bottle of five capsules;

  • FDA and health authority annual licensing fees that have quadrupled over the past 3 years;

  • Providing lomustine at a significantly reduced cost to uninsured patients and patients who lack the resources to pay for the product; and

  • Maintaining an inventory of 12 months' safety stock in the US market at a substantial cost to ensure adequate product distribution and availability.

The company also notes that lomustine is one of only four FDA-approved treatments for glioblastoma and among this class of drug products, Gleostine is priced within the "mid-to-low-end range compared to the other treatments."

Skyrocketing prices for generics have garnered increased attention lately. In 2015, Senators Collins and McCaskill launched a bipartisan investigation into "abrupt and dramatic price increases for prescription drugs whose patents expired long ago."

The results of their investigation were released in 2016 in a report titled, "Sudden Price Spikes in Off-Patent Prescription Drugs: The Monopoly Business Model That Harms Patients, Taxpayers, and the U.S. Health Care System."

"Through close examination of the monopoly business model used by four pharmaceutical companies to exploit market failures, the report examines how companies acquired decades-old, off-patent, and previously affordable drugs and then raised the prices suddenly and astronomically at the expense of patients," the Senators wrote in a news release.

"We must work to stop the bad actors who are driving up the prices of drugs that they did nothing to develop at the expense of patients just because, as one executive essentially said, 'because I can.'" Collins said in that release.

Lack of competition may be driving generic price hikes, and following their investigation, Senators Collins and McCaskill authored a bill to improve generic competition and increase the affordability and accessibility of prescription drugs, which was signed into law as part of the FDA Reauthorization Act.

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