Drug maker Questcor Pharmaceuticals (QCOR), maker of multiple sclerosis drug Achtar, has been on a wild ride as of late. Shares sunk earlier this week after insurance provider Aetna (AET) announced it will no longer provide reimbursement for Achtar as a primary treatment option due to a lack of efficacy. Shares zigzagged during the week, though the firm announced Aetna will continue to pay for treatments already authorized. However, the company disclosed a U.S. government probe into the firm’s marketing practices.
Our biggest concern is whether Aetna’s decision to drop reimbursement coverage for the drug will extend to the rest of the industry. Questcor only receives about 5% of its Achtar revenue from Aetna, but there’s a chance several other healthcare providers will begin to question the drug’s efficacy. However, Achtar gel therapy remains one of two FDA approved therapies to deal with MS exacerbations, so there’s sufficient reason to believe the decision will not become the industry-wide standard. Additionally, the drug is used to treat infantile spasms and nephrotic syndrome—the former of which Aetna will still provide coverage for. Yet, the company itself acknowledges that Achtar doesn’t compete with primary MS treatments such as IV steroids.
Nevertheless, the situation remains very much undetermined. The company’s admission that its drug isn’t as good as primary treatments coupled with a government investigation casts a shadow of doubt over the worthiness of the drug. Testimonials suggest it works for some patients, but with healthcare providers constantly looking for efficient outcomes, we see the potential for providers to steer its customers towards IV steroids. We’re remaining on the sidelines during this situation.