Issue: The prescription drug price increases recently publicized in the media have become a presidential campaign issue. Democratic members of the House Oversight and Government Reform Committee have requested an investigation into two specific companies and their rapid price increases. Republicans are wary of interfering with the free market.

Solution: Investigate a drug whose price increase has not been publicized and the resolution can be created within the realms of Congress without interfering with the free market.

Xyrem: An orphan drug whose price has increased faster than any other drug until 2015 because of federal government-sponsored monopoly.

• Use: Xyrem is used to treat narcolepsy, a condition causing excessive daytime sleepiness.
• Xyrem’s generic name is gamma hydroxybutyrate, or GHB.

History:

• 1980s: GHB was available at health food stores.
• 1990s: DSHEA made GHB a dietary supplement, and still available at health food stores.
• 2000: Chemicals that can be used for date rape are made Controlled Substances subject to regulation by DEA. GHB is made a Schedule I Controlled Substance, the same level as heroin, illegal to possess and unavailable for medical use.
• 2002: Xyrem is approved by the FDA for narcolepsy. FDA and DEA work out a deal to make Xyrem Schedule III for narcolepsy only. It is still a Schedule I otherwise.
  • Orphan Pharmaceuticals makes a deal with Express Scripts’ pharmacy, SDS Pharmacy, to be the only distributor of Xyrem.
  • A complete monopoly is created.
• 2005: Jazz Pharmaceuticals acquires Orphan Pharmaceuticals and the rights to Xyrem.

Price Increase:

• Xyrem’s price increased 841% during the period 2007 to 2014. Of all the thousands of drugs on the market, its price increase was the highest percentage increase in the industry for the period of 2007-2014.
  • In 2014, Xyrem cost $19.40 per 1-milliliter dose, up from just $2.04 in 2007.
  • $150,000 is the price of one year of therapy with Xyrem.
    • Xyrem used to be available for $1-2 per day on the street.
    • Now it is $195 per day!
  • Jazz Pharmaceuticals made half a billion dollars in 2015 from Xyrem

Government Created a Monopoly: Xyrem is distributed with no competition, no generic versions, no middle man, no other manufacturers, distributors, or pharmacies. It is the only drug given this kind of government-created and -protected monopoly. The manufacturers have abused this monopoly by consistently and egregiously raising the price with no justification. The federal government can investigate, intervene, and dismantle the monopoly it created.

How does Xyrem compare to other expensive prescription drugs?

• Xyrem does not cure narcolepsy or cataplexy.
  • Expensive Hepatitis C medications like Harvoni, Sovaldi, etc. cure hepatitis C with a 99% cure rate.
• Xyrem is not a short-term therapy.
  • Xyrem is needed for the life of the patient with narcolepsy. Cancer drugs, hepatitis C drugs, and others are used short-term and the company will only be paid for a short period of time for their research and development.
• Xyrem does not prevent the progression of narcolepsy.
  • HIV medications prevent HIV from progressing to AIDS.
• Xyrem does not prolong the life of patients with narcolepsy.
  • Cancer medications may prolong life. Xyrem patients need this for the rest of their lives to improve their daily quality of life and function.
• Xyrem did not cost much to research and develop.
  • Rheumatoid arthritis and medications used for gastrointestinal disorders are biologic. Many molecules were investigated before one is found effective. Studies cost a lot of money to perform on these disease states. Xyrem’s R&D was done by the National Institutes of Health and the manufacturer simply did the last phase of clinical trials.
• Xyrem is not the only medication needed to control the symptoms of narcolepsy.
  • Other expensive medications are the only treatment necessary, like Harvoni for hepatitis C. Most patients with narcolepsy will need stimulants such as Adderall or Provigil to function on a daily basis.
• Xyrem’s REMS program does not cost that much to administer.
  • Clomipramine has a REMS program and it is a generic medication that costs less than $1,000 per month.
• Xyrem causes side effects.
  • New medications in an existing drug class justify their higher price because they have fewer side effects. An example is Xarelto and Eliquis replacing the dangerous Coumadin for blood clots. Many patients who take Xyrem will develop obstructive sleep apnea and will need a CPAP breathing machine for the rest of their lives.
• Xyrem does not cost much to manufacture.
  • Biologic medications like rheumatoid arthritis, cancer, and even insulin and other molecules have extensive processes for manufacturing their product. Xyrem when available over the counter cost $1-2 per dose. The manufacturer is charging patients 95 times what it cost them to manufacture.

Xyrem’s manufacturer is charging too much money for a drug that it cost little to research, develop, or manufacture. Xyrem’s manufacturer has no incentive to stop the unjustified price increases as it is protected by a government-created and -protected monopoly. The federal government can investigate, intervene, and dismantle the monopoly.

Archway Clinical Pharmacy Services is dedicated to building bridges between patients and providers, between patients and insurers, and between medical and pharmacy data.