Market Dynamics and Financial Trajectory of Acthar Gel
Introduction to Acthar Gel
Acthar Gel, a formulation of adrenocorticotropic hormone (ACTH), is a critical drug in the pharmaceutical portfolio of Mallinckrodt plc. Approved in 1952, it has been used to treat various conditions, including infantile spasms, acute exacerbations of multiple sclerosis, and several other disorders.
Historical Pricing and Revenue
Acthar Gel has undergone significant price increases since its acquisition by Questcor Pharmaceuticals in 2001. Initially priced at less than $40 per vial, Questcor raised the price to over $31,000 per vial by 2007. After Mallinckrodt acquired Questcor in 2014, the price was further increased to approximately $39,864 per vial, a staggering 140,000% increase from its original price[1].
This aggressive pricing strategy has been a key driver of Mallinckrodt's revenue. From 2014 to 2019, Acthar Gel generated nearly $6 billion in net sales, accounting for nearly one-third of Mallinckrodt's total net sales during that period[1].
Financial Performance
Recent Financial Results
In recent years, Acthar Gel's financial performance has shown mixed trends. In the second quarter of 2023, Acthar Gel net sales declined by 4.0% compared to the prior year quarter, primarily due to scrutiny on specialty pharmaceutical spending and competition. However, the company noted that Acthar Gel sales improved sequentially and expected a decline of 15% to 20% for the year[2].
In contrast, the third quarter of 2024 saw a positive turn with Acthar Gel achieving its third consecutive quarter of growth, driven by increasing prescriber referrals and patient demand. Net sales for Acthar Gel in the third quarter of 2024 were $126.4 million, a 3.5% increase over the prior year quarter. The company now expects full-year 2024 Acthar Gel net sales to grow approximately 10%[3].
Impact of New Delivery Systems
The launch of new delivery systems, such as the Acthar Gel SelfJect™ device, has been a significant factor in the recent growth. This device, launched in the second half of 2024, has received enthusiastic feedback from physicians and patients, contributing to the increased demand and sales of Acthar Gel[3].
Market Dynamics
Market Size and Growth
The adrenocorticotropic hormone (ACTH) market, which includes Acthar Gel, is projected to expand at a CAGR of 3.9% from 2021 to 2031, reaching a market size of approximately $1.91 billion by 2031. This growth is driven by the rise in prevalence of chronic diseases and increased investments in research and development[4].
Competitive Landscape
Mallinckrodt plc operates in a competitive landscape that includes other major pharmaceutical companies such as Pfizer, Inc., Novartis AG, Merck KGaA, and Ferring B.V. The market is segmented by indication, distribution channel, and region, with North America dominating the global ACTH market[4].
Regulatory and Public Scrutiny
Acthar Gel has faced significant regulatory and public scrutiny due to its high price. In 2019, Mallinckrodt paid $15.4 million to settle claims that Questcor had paid illegal kickbacks to doctors to induce prescriptions for Acthar Gel. Additionally, internal data has shown that price increases were not justified by other expenses such as manufacturing costs, which have remained relatively stable[1].
Business Strategies
Aggressive Marketing and Sales
Mallinckrodt has driven sales of Acthar Gel through aggressive marketing to physicians. The company has emphasized the high clinical value of the drug and its favorable position with prescribers. The growth potential of Acthar Gel has been directly linked to the size and aggressiveness of the specialty sales force[1].
Product Innovations
The company is focused on innovation, as evidenced by the launch of the Acthar Gel SelfJect™ device. This new delivery system is expected to enhance patient and physician experience, contributing to the drug's continued market presence[3].
Challenges and Opportunities
Affordability and Access
One of the significant challenges facing Acthar Gel is affordability. The high price of the drug has impacted patient access, with slower-than-expected returning patient volumes attributed to affordability issues[2].
Expanding Indications
Acthar Gel is used for multiple indications, including infantile spasms and acute exacerbations of multiple sclerosis. The company's strategy to expand sales volume in current and new on-label indications continues to be a key opportunity for growth[1].
Key Takeaways
- Historical Price Increases: Acthar Gel has seen a 140,000% price increase since its approval in 1952.
- Revenue Contribution: Acthar Gel has been a significant revenue generator for Mallinckrodt, accounting for nearly one-third of the company's total net sales from 2017 to 2019.
- Recent Financial Trends: Acthar Gel sales have shown mixed trends, with declines in 2023 but growth in 2024 driven by new delivery systems and increased demand.
- Market Growth: The ACTH market is expected to grow at a CAGR of 3.9% from 2021 to 2031.
- Regulatory Scrutiny: The drug has faced regulatory and public scrutiny over its pricing and marketing practices.
- Innovation: The launch of new delivery systems like the SelfJect™ device is a key factor in the drug's recent growth.
FAQs
What is Acthar Gel used for?
Acthar Gel is used to treat various conditions, including infantile spasms, acute exacerbations of multiple sclerosis, and several other disorders.
How much has the price of Acthar Gel increased since its approval?
The price of Acthar Gel has increased by approximately 140,000% since its approval in 1952, from less than $40 per vial to around $39,864 per vial.
What are the main drivers of the ACTH market growth?
The ACTH market growth is driven by the rise in prevalence of chronic diseases and increased investments in research and development.
How has the launch of the SelfJect™ device impacted Acthar Gel sales?
The launch of the SelfJect™ device has contributed to the growth of Acthar Gel sales, with enthusiastic feedback from physicians and patients.
What regulatory challenges has Acthar Gel faced?
Acthar Gel has faced regulatory challenges, including a $15.4 million settlement for illegal kickbacks to doctors and scrutiny over its high pricing and marketing practices.
Sources
- Mallinckrodt—HP Acthar Gel | Drug Pricing Investigation. Oversight Democrats.
- Mallinckrodt plc Reports Second Quarter 2023 Financial Results. PR Newswire.
- Mallinckrodt plc Reports Third Quarter 2024 Financial Results. PR Newswire.
- Adrenocorticotropic Hormone [ACTH] Market Overview 2031. Transparency Market Research.
