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 , 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.)