Jeff Gelles: Probing the mystery of drug-supply disruption

Rheumatoid arthritis can be a painful, debilitating disease. But like some of its victims, Fred LeStourgeon was lucky enough to find long-term relief through drug therapy - in his case, with a combination of two widely available generic drugs.

Then something odd happened, and LeStourgeon has been asking questions ever since. Last fall, one of the medications he relied on, leflunomide, nearly vanished from the market - only a much higher-priced brand version, Arava, remained available. And when leflunomide returned, the price had jumped more than tenfold - from about $70 for a three-month supply at his Acme Markets pharmacy to $942.

LeStourgeon is covered by Medicare Part D, so it wasn't a financial hardship for him. But he was concerned, as he puts it, about "the costs to us all" from steep price increases he knows are largely born by private and public insurance. And his suspicions were heightened when his pharmacist explained the increase by saying the generic was available only from a single manufacturer, Teva Pharmaceutical Industries Ltd.

"It's a decades-old generic, and all of a sudden there's nothing there, and then it comes back at a higher price?" LeStourgeon says. "It may not be technically illegal, but it's immoral. And it's certainly not in the best interests of health care in the United States."

LeStourgeon's concerns are heightened by his gratitude for leflunomide, even though it is a drug that must be closely monitored for adverse effects. A former Navy officer and manager at Atlantic Richfield and Sunoco, LeStourgeon's last job was building post-and-beam homes - an avocation-turned-vocation that would sound miraculous to many an arthritis sufferer.

At LeStourgeon's urging, I decided to try to unravel what happened with leflunomide, a drug whose roughly $20 million in U.S. sales - before the price increases, that is - would hardly merit a footnote in a Big Pharma annual report.

As it turns out, this small-market drug offers a big window onto some worrisome trends in the pharmaceutical industry, including manufacturing problems and drug shortages that can result not just in price spikes, but in big disruptions in patient care - sometimes even deaths.

It's not entirely clear why leflunomide became scarce, or who benefited from the price increases. The good news is that at least they appear to have been temporary.

Last week, a Philadelphia CVS still quoted a high price, $220, for a 30-day supply of 10-milligram tablets, LeStourgeon's dosage. But at Nisenholtz Pharmacy, an independent pharmacy on Castor Avenue, the price had dropped from the stratosphere to about $30.

One clear factor in the shortage was a suspension in imports by Apotex, the U.S. arm of a Canadian maker of generics, after inspectors from the U.S. Food and Drug Administration found problems at two of its Toronto facilities in September 2009.

Steve Giuli, Apotex's director of U.S. government affairs, says the company resumed U.S. manufacturing this year and recently restarted U.S. imports.

It's less clear what has happened with other manufacturers, including Teva, which did not respond to repeated messages, and Sandoz, whose spokeswoman said Friday that it was "looking into the issue" and still had a shortage of 20mg tablets of leflunomide.

Some clues come from the list of drug shortages tracked by the American Society of Health-System Pharmacists (ASHP).

In January, ASHP said that Teva had reported shortages of leflunomide because of the "unavailability of raw material," and that Sandoz had reported a similar shortage "due to increased demand and delay of raw material."

Who supplies the raw material?

That's a key question, according to consumer advocates such as Larry Sasich, a pharmacist who consults with Public Citizen's Health Research Group and who says control over an active ingredient, even temporarily, could allow a manufacturer of generic drugs to price "like a monopolist." But the answer is something no manufacturer willingly wants to disclose.

To doctors and pharmacists, the biggest issue raised by drug shortages isn't price. It's patient safety. And one irony is that legitimate concerns over safety may contribute to at least some of the shortages.

Apotex left the U.S. market because of concerns raised by the FDA during a period of heightened focus on sloppy practices.

In 2008, dozens of deaths were attributed to contaminated heparin, a blood thinner, made from raw material imported from China. Problems found during inspections have hit many major drugmakers, which rely heavily on imported ingredients.

Hospital pharmacists are especially concerned about shortages of injectable drugs and electrolyte solutions, which can be crucial to the care of critically ill patients, says Erin R. Fox, who manages the drug-information service for the University of Utah Hospital and oversees ASHP's list of shortages, which contains 260 drugs, nearly four times as many as in 2006.

"We spend hours trying to jump through hoops to get drugs for our patients," says Fox, who calls the situation a crisis. If available at all, substitute drugs are second-best, she says, and the substitution process itself can pose risks.

"I think there is something fundamentally wrong here," she says. "Our normal free market, where supply and demand usually work, isn't working."

In a later column, I'll tell you more about what's gone awry.