I looked into the Ampligen issue–the exorbitant 267% price increase by Hemispherx–some more. Here is one thing that patients who are currently enrolled in the trial can do. They can contact Schulman Associates, the Institutional Review Board (IRB) for this trial at: Schulman Associates Institutional Review Board, Inc., 4445 Lake Forest Drive, Suite 300, Cincinnati, Ohio, fax: 866.377.3359. The IRB was “established to help protect the rights of research subjects” and encourages trial participants to write to the IRB “[i]f [they] have any questions about [their] rights as a research subject, and/or concerns or complaints regarding this research study….”
I also sent a follow-up message to FDA’s Dr. Woodcock with additional information regarding the distressing new price for Ampligen. I submitted that message together with my message to Dr. Woodcock from two days ago as official comments for the CFSAC meeting next week urging CFSAC, especially its FDA ex officios, to follow up with Dr. Woodcok. My CFSAC comments are reproduced below. (My new message to Dr. Woodcock starts under “August 13, 2015 Letter.”)
CFSAC Meeting August 18th-19th, 2015
Public Comments by Jeannette Burmeister
Submitted on August 13, 2015
I would like to urge CFSAC, particularly its FDA ex officio members, Drs. Maynard and Hall, to follow up with Dr. Woodcock regarding Hemispherx’s enormous price increase for Ampligen. Since FDA has regulatory authority over cost-recovery programs such as the Ampligen trial, I am asking that FDA exercise its authority to audit the justification of the new price and to re-assess its authorization of the increased price.
Below are two letters I sent to Dr. Woodcock on August 11, 2015 and today (August 13, 2015) with more details about the situation, which is dire and urgent.
August 11, 2015 Letter:
You can read my August 11 letter at 267% Price Increase for Ampligen.
August 13, 2015 Letter:
Dear Dr. Woodcock,
As a follow-up to my letter of August 11, 2015 regarding the enormous price increase for Ampligen by Hemispherx Biopharma, Inc. (“HEB”), I wish to raise a few additional issues.
As you know, FDA may allow drug companies to recover certain costs for investigational drugs in accordance with 21 C.F.R. 312.8, as it has done in the case of HEB and Ampligen. In order for a drug manufacturer, a so-called sponsor, to charge for certain costs for a drug undergoing clinical investigation, certain requirements have to be met.
In accordance with 21 C.F.R. 321.8(d)(1), a sponsor may recover only the direct costs of making its investigational drug available, not the indirect costs. The regulations further provide:
“Direct costs are costs incurred by a sponsor that can be specifically and exclusively attributed to providing the drug for the investigational use for which FDA has authorized cost recovery.“
“Indirect costs include costs incurred primarily to produce the drug for commercial sale (e.g., costs for facilities and equipment used to manufacture the supply of investigational drug, but that are primarily intended to produce large quantities of drug for eventual commercial sale) and research and development, administrative, labor, or others costs that would be incurred even if the clinical trial or treatment use for which charging is authorized did not occur.”
In March of this year, Hemispherx announced the completion of an $8 million facility-enhancement project in New Brunswick, N.J. to allow for a higher-capacity manufacturing process for both Ampligen and the company’s other drug, Alferon N. In the same month, HEB announced plans to commence distribution of Ampligen in Australia and New Zealand. This week, HEB announced that it was getting ready to supply Ampligen to patients in Europe and Turkey. As Australia, New Zealand, Europe and Turkey are currently completely untapped markets for Ampligen, it seems likely that the upgrades to the New Brunswick facility were made in anticipation of commercially selling the drug in these large new distribution areas, especially given the timing; the completion of the enhanced facility nearly coincided with the announcement regarding Australia and New Zealand and was followed, only a few months later, by the announcement with respect to Europe and Turkey. HEB will need to produce Ampligen in much larger quantities now in order to satisfy the demand in the new markets and with its upgraded facility will have the capacity to do so. In addition, HEB, by its own admission, is still actively and diligently pursuing FDA approval in the U.S. If it is successful with that endeavor, the new facility will be used to produce large quantities of Ampligen for commercial sale in the U.S. Consequently, the facility-enhancement project is likely an indirect cost and not recoverable under FDA regulations. Therefore, should HEB have included it in the cost justification for the price increase in the U.S. market, that would constitute an improper cost calculation and, given the magnitude of the project, even if depreciated or amortized, it alone may account for the Ampligen price increase.
Moreover, HEB has incurred manufacturing costs for the study of Ampligen treatment of other indications, e.g., Ebola, HPV, HIV, hepatitis and influenza. Were the costs for those efforts included in the cost justification for the open-label-trial price increase?
I also want to make you aware of the fact that the documentation that patients had to sign in order to enter the trial makes the express representation that the charge for the drug is “expected to be $2,100 for the first eight (8) weeks and $2,400 for each additional eight (8) week period.” Obviously, modest, justifiable price increases are to be expected and not objectionable. Dramatic increases—certainly those in the ballpark of 267% (an increase of $26,000 per year, from $15,600 to $41,600)—are not; they are inconsistent with the terms on which patients agreed to participate in the trial. In an FDA-regulated trial, such seeming price gouging ought to be impermissible, especially given the concerns as to the cost calculation and the representations made to the participants in the trial, many, if not most, of whom have made substantial personal sacrifices, financial and other, to participate and have also, over all these years made contributions, often at a price to their health, to HEB’s FDA-approval efforts for Ampligen by frequently completing extensive paperwork, undergoing large blood draws, performing stress tests twice a year, traveling to D.C. to testify in support of the approval of the drug, etc.
These and potentially other concerns raise serious questions as to whether the tremendous price increase for Ampligen was implemented properly and is otherwise permissible. Since FDA has regulatory authority over cost-recovery programs such as this one, I am asking again that FDA exercise its authority to audit the justification of the new price and to re-assess its authorization of the increased price. I do not purport to speak for anybody other than myself, but please be aware that the situation is a top priority for many in the patient population.
Dr. Stephen Ostroff, FDA Acting Commissioner (via email)
Nancy McGrory, Hemispherx Patient Advocate (via email)
Schulman Associates Institutional Review Boards (via fax)