In late August, Questcor Pharmaceuticals raised the price Acthar, which is used to treat infant spasms, from $1,650 a vial to more than $23,000 a vial, sending the price for an average patient to $100,000 or more. The price hike stunned some caregives.

“It’s an obscene increase. I could almost see doubling or tripling the price but [14] times seems ridiculous,” Sarah Erush, clinical manager of pharmacy at the Children’s Hospital of Philadelphia, tells The Philadelphia Inquirer. Robert Clancy, a neurologist who directs the hospital’s Pediatric Regional Epilepsy Program, adds: “Everyone understands it’s a business and they need to have a fair profit. But to go from $1,600 to $23,000 strikes me as old-fashioned greed.”

But Questcor says it had no choice, because it was losing nearly $1 million a month and derived more than 90 percent of its revenue from Acthar. Last year, total company revenue hit $12.8 million. “We had to take this kind of a pricing increase to ensure that Acthar remains available,” Steve Cartt, Questcor’s executive vp corporate development, tells the paper. “The company was in a bad situation.”

Although Questcor revamped a patient-assistance program to make more Acthar available at no cost to help uninsured parents, and started two co-pay assistance programs, the price increase caused at least one insurer to put in a more stringent pre-authorization process. And the paper claims experts say it is likely that many patients will find it harder to get this drug.

“It’s highly unusual to have such an old drug have a huge price increase,” says Maria Hardin, vp of patient services for the National Organization for Rare Disorders. “We’re thrilled when these companies develop drugs, but not when they crunch the numbers” and come up with stiff increases.

Unlike new biologics, for example, Acthar is an old drug that was first synthesized in the 1940s by Armour, the canned-meat firm, which harvested it from pigs’ pituitary glands. The drug was made by Rhone-Poulenc Rorer and then by its successor, Aventis. It was never a big seller, and the former owner nearly stopped making it in the mid-1990s - only to see it brought back after a storm of pediatricians complained that there was no substitute.

Questcor bought the rights to the drug in 2001 and sought FDA approval for infant spasms, but received a “non-approvable” letter in May. The agency didn’t think the existing clinical trials were good enough, Cartt said, adding that the firm is exploring what kind of tests the FDA will need. Even without formal FDA approval, Acthar remains the drug of choice since it’s the most likely drug to end seizures.

Cartt estimates that only about 1,000 to 1,500 children a year need Acthar. (An additional 100 children use Acthar for an even rarer neurological condition called Opsoclonus-Myoclonus.) The average insurer “may see one or two of these cases” a year, he says. “It’s just insignificant. Even at the current pricing, it doesn’t show up. We’re seeing greater than 90 percent insurance coverage at the new pricing.”

Prescription drugs are “a legal monopoly. We expect monopolists to behave like monopolists,” says Mark Pauly, a health economist at the Wharton School. “The argument is the higher profits will stimulate further beneficial research.”