Market Dynamics and Financial Trajectory for Acthar Gel
Introduction
Acthar Gel, a repository corticotropin injection, is a pivotal product for Mallinckrodt plc, a global specialty pharmaceutical company. This drug has been at the center of significant market and financial dynamics, particularly due to its pricing strategies, clinical applications, and economic impact.
Historical Pricing and Revenue
Acthar Gel's pricing has been a contentious issue. Before Mallinckrodt's acquisition of Questcor, the drug's price was raised from $40 per vial to over $31,000 per vial. Following the acquisition, Mallinckrodt further increased the price by more than $8,200 per vial, a 26% increase[1].
This aggressive pricing strategy has driven substantial revenue for Mallinckrodt. From 2014 through 2019, Acthar Gel generated nearly $6 billion in net sales, accounting for nearly one-third of the company's total net sales during 2017-2019[1].
Financial Performance
In recent years, Acthar Gel's financial performance has shown mixed trends. For the fourth quarter of 2023, Acthar Gel reported net sales of $104.4 million, with $47.4 million in the Predecessor period and $57.0 million in the Successor period. This reflects positive momentum and underlying business strength, despite fiscal 2023 net sales being slightly below guidance[2][5].
Mallinckrodt's overall financial health has been impacted by various factors, including significant operating losses and interest expenses. For fiscal 2023, the company reported a net loss of $1,669.5 million, with an Adjusted EBITDA of $571.9 million[2].
Market Segmentation and Growth
The adrenocorticotropic hormone (ACTH) market, which includes Acthar Gel, is expected to grow at a CAGR of 3.9% from 2021 to 2031, reaching a market size of US$ 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].
North America dominates the global ACTH market, and this trend is expected to continue during the forecast period. Key players in this market include Mallinckrodt plc, Pfizer, Inc., Novartis AG, and others[4].
Clinical Applications and Cost-Effectiveness
Acthar Gel is approved for two primary indications and may be used in 17 other diseases or disorders. Recent health economics analyses have provided insights into its cost-effectiveness for treating advanced symptomatic sarcoidosis and nephrotic syndrome.
From a payer perspective, Acthar Gel versus standard of care (SoC) resulted in an incremental cost-effectiveness ratio (ICER) of $134,796 per quality-adjusted life-year (QALY) over two years and $39,179 per QALY over three years. From a societal perspective, the ICER was $117,622 per QALY over two years and $21,967 per QALY over three years[3].
Pricing Strategies and Public Perception
Mallinckrodt has faced significant public criticism for the high price of Acthar Gel. To mitigate this, the company has explored strategies such as offering smaller vials at lower prices to make the drug appear less expensive. For instance, in 2018, Mallinckrodt's CEO directed efforts to emphasize that Acthar costs $25,000 rather than $38,000 per vial[1].
Future Outlook
Mallinckrodt expects Acthar Gel's net revenue to decline in the low single digits in fiscal 2024 compared to fiscal 2023, but anticipates improved performance as prescribing momentum grows. The company is also on track to launch SelfJect, a related product, in the second half of 2024 following FDA approval[2].
Health Economics and Outcomes
The health economics data presented by Mallinckrodt at the Academy of Managed Care Pharmacy (AMCP) Nexus 2023 highlights the drug's impact on clinical, economic, and real-world outcomes. These analyses are crucial for payers and healthcare providers in evaluating the cost-effectiveness of Acthar Gel compared to other treatment options[3].
Challenges and Concerns
Despite its financial success, Acthar Gel faces challenges such as potential side effects like bone loss, indigestion, and muscle weakness. Manufacturers are working to create awareness about managing these side effects, which is essential for maintaining patient trust and adherence to treatment[4].
Regulatory and Competitive Landscape
The ACTH market is highly competitive, with several key players. Regulatory approvals and compliance are critical for maintaining market share. Mallinckrodt's ability to navigate these regulatory landscapes and innovate within the therapeutic areas will be pivotal to its future success[4].
Key Takeaways
- Revenue Generation: Acthar Gel has been a significant revenue driver for Mallinckrodt, generating nearly $6 billion in net sales from 2014 to 2019.
- Pricing Strategies: The drug's high price has been a subject of controversy, with Mallinckrodt implementing strategies to mitigate public criticism.
- Market Growth: The ACTH market is expected to grow at a CAGR of 3.9% from 2021 to 2031.
- Clinical Applications: Acthar Gel is used for various indications, with recent analyses highlighting its cost-effectiveness in treating advanced symptomatic sarcoidosis and nephrotic syndrome.
- Future Outlook: Mallinckrodt anticipates a decline in Acthar Gel's net revenue in fiscal 2024 but expects improved performance as prescribing momentum grows.
FAQs
What is Acthar Gel used for?
Acthar Gel is approved for two primary indications and may be used in 17 other diseases or disorders, including advanced symptomatic sarcoidosis and nephrotic syndrome.
How much has the price of Acthar Gel increased over the years?
The price of Acthar Gel was raised from $40 per vial to over $31,000 per vial before Mallinckrodt's acquisition of Questcor. After the acquisition, the price was further increased by more than $8,200 per vial, a 26% increase.
What are the financial implications of Acthar Gel for Mallinckrodt?
Acthar Gel has generated nearly $6 billion in net sales for Mallinckrodt from 2014 to 2019 and accounts for a significant portion of the company's total net sales.
What are the health economics outcomes of using Acthar Gel?
Recent analyses show that Acthar Gel has an ICER of $134,796 per QALY over two years and $39,179 per QALY over three years from a payer perspective, and $117,622 per QALY over two years and $21,967 per QALY over three years from a societal perspective.
What is the future outlook for Acthar Gel's sales?
Mallinckrodt expects Acthar Gel's net revenue to decline in the low single digits in fiscal 2024 but anticipates improved performance as prescribing momentum grows.
Sources
- Mallinckrodt—HP Acthar Gel | Drug Pricing Investigation - Oversight Democrats.
- Mallinckrodt plc Reports Fourth Quarter and Fiscal Year 2023 Financial Results and Provides 2024 Guidance - PR Newswire.
- Mallinckrodt Presents Latest Health Economics Data on Acthar® Gel - PR Newswire.
- Adrenocorticotropic Hormone [ACTH] Market Overview 2031 - Transparency Market Research.
- Mallinckrodt plc Reports Fourth Quarter and Fiscal Year 2023 Financial Results and Provides 2024 Guidance - Investor Relations, Mallinckrodt.
