Members of Prescirption Access Litigation’s coalition are plaintiffs in a national class action lawsuit that alleges the Cephalon (Nasdaq:CEPH) illegally took steps to keep a less expensive generic version of its narcolepsy drug Provigil off the market, including paying off generic drug companies that challenged Cephalon’s patents on Provigil to not try to bring a generic to market. So we follow news about Provigil quite closely.

Back in September, we wondered aloud “Why did Cephalon close its Provigil Patient Assistance Program.” We speculated:

Cephalon jacked up the price of Provigil 14% back in March [2008], according to a Bloomberg News report. US sales of Provigil for the first half of the year were $417 million. Given that Provigil’s total 2007 sales were $744 million, the drug’s sales are growing….

Provigil is clearly a money maker for Cephalon, approaching the magic $1 billion “blockbuster” market. Provigil has on the one hand deprived consumers of a more affordable generic and on the other hand told uninsured patients seeking assistance that they’re out of luck halfway through the year….

One can’t help but wonder if the Patient Assistance Program’s closure has anything to do with the anticipated introduction next year of Nuvigil, a “successor drug” to Provigil. Nuvigil (armodafinil) is the “single isomer” formulation of Provigil (modafinil), which means that Nuvigil is just one half of the molecule that gives Provigil its kick.

The Wall Street Journal reported this week in How a Drug Maker Tries to Outwit Generics:

Twice this year, Cephalon Inc. has sharply raised the price of its narcolepsy drug Provigil. The drug is now 28% more expensive than it was in March and 74% more expensive than four years ago…The Frazer, Pa., company has said in investor presentations that it plans to continue to raise the price.

The Provigil price increases — the drug’s average wholesale price is now $8.71 a tablet — are an extreme example of a common tactic pharmaceutical companies employ in the U.S. to boost profits and steer patients away from cheaper generics.

It works like this: Knowing that Provigil will face generic competition in 2012 as its patent nears expiration, Cephalon is planning to launch a longer-acting version of the drug called Nuvigil next year. To convert patients from Provigil to Nuvigil, Cephalon has suggested in investor presentations it will price Nuvigil lower than the sharply increased price of Provigil.

By the time copycat versions of Provigil hit the market the company is banking that most Provigil users will have switched to the less-expensive Nuvigil, which is patent-protected until 2023. In the meantime, Cephalon will have maximized its Provigil revenue with the repeated price hikes.

“You should expect that we will likely raise Provigil prices to try to create an incentive for the reimbursers to preferentially move to Nuvigil,” Chip Merritt, Cephalon’s vice president of investor relations, told a Sept. 5 health-care conference, according to a transcript of the meeting.

A more cynical statement by a pharmaceutical spokesperson is hard to find, and that’s saying a lot. What this statement means is that Cephalon is apparently willing to force patients to pay more — for no reason other than to boost sales of its new drug, Nuvigil, and get patients and physicians to switch to it – all before a generic version of Provigil hits the market, which likely will cost 70-80% less than Provigil within a year of a generic being available.

Increasing drug prices, of course, are apparently par for the course in the U.S. But, as the WSJ points out, “Provigil’s price increase over the past four years has been almost four times steeper than the 4% compound annual growth rate of the average drug price during that period, according to a DestinationRx analysis of 2,570 brand-name drugs.”

We at PAL hear from patients on a daily basis who cannot afford Provigil. These include people who are uninsured, people who are in the Medicare Part D “donut hole,” people who have qualified for Social Security Disability Income (SSDI) but who are stuck in the ridiculous 2 year waiting period to get on Medicare, and people whose insurance won’t pay for Provigil.

For many of these people, they need Provigil in order to have functioning daily lives — we’re not talking about, as the WSJ describes, people take Provigil for uses not approved by the FDA, “as a ‘lifestyle drug’ to help them stay awake during work or leisure activities.” We’re talking about people like Jessica, who described her inability to afford Provigil in Jessica’s story: No help from Cephalon for cost of Provigil.

Making payoffs to keep generic Provigil off the market, raising its price at a rate four times higher than other drugs, closing its patient assistance program halfway through the year — all we can say is shame on Cephalon.

(Got a Provigil story to tell? Post a comment below.)

A reader of this blog recently wrote to us here at Prescription Access Litigation and reported that the Cephalon (Nasdaq:CEPH) had closed its Patient Assistance Program for Provigil, its prescription drug for Narcolepsy and other sleep disorders.

Why would Cephalon deprive uninsured and low-income patients access to this drug?

For many patients, this adds insult to injury. Back in March, we posted Jessica’s story: No help from Cephalon for cost of Provigil, a heartbreaking story of a young woman with narcolepsy whose insurance dropped Provigil from its formulary. As Jessica described in that entry:

When my health insurance dropped Provigil from their formulary in 2007, my Provigil copay jumped from $50/month to $234/month in addition to a $500 brand name deductible and my $130 monthly premium…Desperate to find a way to get my medicine so I wouldn’t end up on welfare, I called Cephalon’s PROVIGIL Assistance Program and requested financial assistance. I was still willing to pay part of the costs, but I hoped they could give me some sort of rebate. Cephalon told me that because I had some form of insurance I didn’t qualify for any assistance, regardless of how high my co-payment is or my financial situation.

They told me that if I was uninsured they would pay up to $500 per month (which is the retail cost of a month supply for me). They actually suggested I drop my insurance plan. It seems strange (not to mention unethical) that they would rather I drop my insurance so they could give me $500/month instead of just helping me with a portion of my $234 co-pay…

I actually considered listening to them and dropping my insurance so I could get free medication, but that ultimately wasn’t an option because I have other health conditions and my pre-existing conditions would make it unlikely I could obtain new insurance in the future.

So Cephalon had some pretty stringent limitations in place to begin with on its Patient Assistance Program: If a patient had any insurance, even if that insurance wouldn’t cover Provigil at all, Cephalon wouldn’t help them. We heard from quite a few patients after we posted Jessica’s story who described being in the same situation. And then recently a reader alerted us to the fact that Cephalon had closed its Provigil assistance program for the rest of the year. Apparently, they closed it quite some time ago – the Brass and Ivory blog posted a link to Jessica’s story, and a commenter there reported back in June that the program was “full.” We called the Provigil assistance line and they confirmed that the program is indeed closed for the rest of the year.

Now, some may argue that Cephalon is not required to provide free drugs to anyone, and that it’s up to them to determine how much help to provide. While that’s true, it’s not the full picture. Cephalon has taken numerous active steps to deprive patients of affordable Provigil. For instance they’ve kept a more affordable generic version of Provigil off the market.

Cephalon filed patent infringement lawsuits against generic drug companies that tried to bring a less expensive generic version to market. Then Cephalon paid them off, to the tune of more than $130 million, not to sell generic versions of Provigil until 2011 at the earliest. PAL member AFSCME District Council 37 Health & Security Plan is a plaintiff in a national class action lawsuit challenging these payoffs.

And Cephalon jacked up the price of Provigil 14% back in March, according to a Bloomberg News report. US sales of Provigil for the first half of the year were $417 million. Given that Provigil’s total 2007 sales were $744 million, the drug’s sales are growing. (But apparently not enough for Cephalon, which just ended its Provigil co-promotion agreement with Takeda Pharmaceuticals North America, because sales didn’t reach an agreed-upon level) And as we reported back in March:

Cephalon’s CEO, Frank Baldino, got $13.5 million in compensation last year. This is much more than CEOs at other, much larger, drug companies earned last year, including Pfizer and Bristol Myers Squibb.

Provigil is clearly a money maker for Cephalon, approaching the magic $1 billion “blockbuster” market. Provigil has one the one hand deprived consumers of a more affordable generic and on the other hand told uninsured patients seeking assistance that they’re out of luck halfway through the year. (Note: Cephalon only said that the program is closed to new patients – it’s not clear whether patients who got on the program before it closed are helped through the year, or whether their help was cut off as well)

One can’t help but wonder if the Patient Assistance Program’s closure has anything to do with the anticipated introduction next year of Nuvigil, a “successor drug” to Provigil. Nuvigil (armodafinil) is the “single isomer” formulation of Provigil (modafinil), which means that Nuvigil is just one half of the molecule that gives Provigil its kick.

Introducing these single-isomer versions of drugs is a common tactic used by drug companies when they are facing generic competition: chop off one-half of the molecule, and aggressively market it as a “new” drug, regardless of whether it’s more effective or not. This is what Astra-Zeneca did when Prilosec’s patent was set to expire — Nexium is the single-isomer version of Prilosec. But it’s no more effective — just much more expensive. Cephalon’s timing is early, since the deals it cut with generic drug makers will keep a generic version of Provigil off the market until 2012. But when Cephalon submitted its application to the FDA for approval of Nuvigil, it was likely not clear how soon a generic Provigil would come on the market.

And the market for drugs like Provigil and Nuvigil is growing — although just approved for conditions like Narcolepsy, obstructive sleep apnea and shift-work sleep disorder, they’re being widely used “off label” for other purposes — such as by people who want to stay awake and increase their productivity over long hours. The San Jose Mercury News ran a story this week, “Pill that boosts productivity gaining favor in Silicon Valley”. Some choice snippets from that article:

The practice appears to have gotten at least a foothold in Silicon Valley, especially with Provigil…Provigil seems to be gaining favor among workers here, according to TechCrunch founder and influential Internet commentator Michael Arrington. In a blog posting titled “How many Silicon Valley startup executives are hopped up on Provigil?” Arrington declared in July that “I’ve spoken with one executive who says he uses it regularly to work 20-hour days, and the buzz lately is that it’s the ‘entrepreneur’s drug of choice’ around Silicon Valley.”

It’s not clear whether Cephalon is claiming that Nuvigil is an improvement over Provigil. Nuvigil’s FDA approved label’s only reference to this just says that Nuvigil is the “longer-lived enantiomer
of modafinil.” Single-isomer formulations are seldom significant improvements over the whole molecule, but are virtually always much more expensive and heavily promoted as though they are the next new wonder drug. It’s not uncommon for companies to begin winding down the marketing efforts behind an old drug when a new drug is on the horizon.

The press release that Cephalon issued back in June 2007, when FDA approved Nuvigil, gives some insight into where they intend to take this drug, and how they might be looking to expand the market for it:

Cephalon’s clinical program will evaluate the use of NUVIGIL as a treatment for serious medical conditions such as bipolar depression, cognition associated with schizophrenia, excessive sleepiness in medical conditions such as Parkinson’s disease, and fatigue in patients who are being treated for cancer. The company currently plans a commercial launch of NUVIGIL once additional clinical data has been amassed.

“The approval of NUVIGIL allows us to preserve our current leadership position in the area of wakefulness,” said Frank Baldino, Jr., Ph.D., Chairman and CEO, Cephalon. “More importantly, we now have a longer-term opportunity to further characterize the utility of this compound beyond wakefulness.” NUVIGIL is protected by a U.S. patent expiring in 2023.

One possibility, then, is that Cephalon is winding down its patient assistance program for Provigil in anticipation of a push on Nuvigil. Even though assistance programs typically provide people drugs for free or very cheaply, they can still serve a marketing purpose. Some of those uninsured patients will eventually get insurance or get on a public program like Medicaid or Medicare. If they’re already taking your more expensive and newer drug because they’re on your patient assistance program, then they’re likely to remain on that drug once they have insurance that will actually pay for it, and thus generate revenue for the company. It’s a similar logic to drug samples in the doctor’s office — the cost of the samples is an investment in future prescriptions.

But that’s awfully cynical. Could a company that has paid off generic drug makers to deprive consumers of a more affordable version of a drug that’s a necessity for many people with narcolepsy, that closes its patient assistance program halfway through the year, and that suggests to patients that drop their insurance in order to get on a patient assistance program, be that cynical? Surely not.