Beginning in July, Teva Pharmaceuticals and Prinston Pharmaceuticals rolled out a series of recalls on the high blood pressure and heart failure medicine valsartan after a probable carcinogen was found in the drug. Another company, unaffected by the issue, saw a rare opportunity. Alembic Pharmaceuticals rushed to hike the prices of its similar drugs anywhere from 329 percent to 469 percent.
And when the same potentially cancer-causing impurity was found in another high blood pressure medication, irbesartan, Alembic hiked the price of its irbesartan, too. The tactic proved an overwhelming success for the company, which reported “massive growth” in U.S. sales from July through September.
The company set out to “create a nimble supply chain that can react quickly to market opportunities,” said Pranav Amin, managing director of Alembic, during a conference call with analysts in October. “So, we could respond very fast to the valsartan opportunity and we could ramp up our supplies and we could get on the market at a high price and that is what is sold.”
Hundreds of lots of the high blood pressure and heart failure drug valsartan were recalled due to the impurity, leading to a shortage of the medication.
Valsartan is in a class of drugs called angiotension II receptor blockers, or ARBs. The Food and Drug Administration (FDA) launched an investigation, adding more valsartan-containing medications to the recall list when the impurity, called N-nitrosodiethylamine, or NDEA, was found. As the FDA expanded its investigation to other ARBs, recalls were issued for the drugs irbesartan and losartan due to the same issue.
Alembic wasn’t alone in hiking its ARB prices to take advantage of the shortfall due to the recalls. MacLeods increased the price of four of its valsartan drugs in August, with the largest increase at 305 percent.
“How do you convince them from a public health perspective to do the right thing?” Peter J. Pitts, president of the Center for Medicine in the Public Interest told USA Today. “I don’t believe any company that makes any drug, whether it is an innovative biotech cancer drug or a generic drug that’s been around for 50 years, should take advantage of the marketplace to a degree that causes significant financial pain for patients.”