A few weeks ago, another huge datapoint was disclosed in
regard to the status of health insurers' reimbursement policies for clinical
use of Questcor's primary drug Acthar. United Healthcare, the largest health carrier
in the US, has issued new guidelines for 2013, specifically
tightening scrutiny on Acthar, and taking it to the highest of all scrutiny
levels
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Prior Status for
2012
|
Tier 3
|
Medications that
offer the least health care value (either clinically and/or financially) than
similar medications in their therapeutic classes. No prior notification of the insurer was
required.
|
|
New Status for
2013
|
Tier 3 plus
Notification
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Above definition
plus "required to provide additional clinical information to verify
member benefit coverage". No
grandfathering.
|
Note: No grandfathering is permitted. Patients on existing therapy are not
exempt.
This ratchets up scrutiny of Acthar even further -- from
the most restrictive class of drugs to a case-by-case basis at the largest
single health carrier in the United States.
Note: This is a notification document, not a
conditions of coverage document. That
is proprietary to the company, and might or might not be released. It
doesn't speak at all to the medical conditions under which Acthar is
prescribed, but only to the increased scrutiny such prescriptions will be
subject to prior to reimbursement.
So here's what we know:
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Best Case Scenario:
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EVERY prescription for MS and Nephrotic Syndrome get
scrutinized on a case by case basis, including each patient's prior medical
records
|
|
Worst Case
Scenario:
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United is aligning with Aetna and leading thinkers from
the country's top clinical institutions to restrict Acthar use because there
is no clinical data to support its use, beyond Infantile Spasms.
|
Some may spin this as good news – the "nothing is
changed" justification – the argument is the company is already accustomed
to having to get individual prescriptions approved for reimbursement.
Citron asks: How
can the company justify a growth path when it is obligated to pre-authorize every single prescription by submitting
individual patient medical records while under an open investigation from the
Department of Justice on its sales and marketing practices ?
Conclusion
It is Citron's opinion that Questcor is a hand-holding
operation on how to skirt insurance company reimbursement procedures and
policies, and it is finally catching up with them. Citron
also notes that the sell-side analysts again demonstrate that relying on them
to keep abreast of this story is risky.
It is Citron's opinion that this business model is the
very definition of not sustainable, that it should not be conferred valuation
predicated on a "customary" multiple, and restates its opinion that
it is headed to single digits in the next twelve months.
And worst, why didn't the company disclose this ?
It's never a
problem, until it’s a problem.
