Skip to main content

Business and Markets

Catalyst and Jacobus and LEMS: The Latest Chapter

I last wrote about the situation with Catalyst Pharmaceuticals here last December when Firdapse, their drug for Lambert-Eaton myasthenic syndrome, was approved by the FDA. If you know the story, though (or follow the links in that post) you’ll see that referring to it as “their drug” is a rather legalistic way of looking at things. Firdapse is 3,4-diaminopyridine, and it’s been used as a therapy for LEMS for many years. It was, in fact, provided free to the (few) patients with the disease by a small company called Jacobus Pharmaceuticals, until Catalyst saw a regulatory opportunity and hopped in with a chance to take an old generic compound and get marketing exclusivity by taking it through the modern FDA process.

Whereupon they announced a price of $375,000 for the treatment. This has caused a great deal of uproar, and it should, but in that December post I laid a good chunk of the blame right on the FDA for allowing this sort of thing to happen by awarding such generous prizes for un-grandfathering the approval of older drugs. I still think Catalyst are slime for doing this, of course, but it’s the FDA that have held the door open for them and asked if they could hold their coat. Thank you Mister Slime, glad you could join us, can I get you anything to drink?

Well, there’s been an interesting twist in the story, as detailed here at STAT‘s Pharmalot column. Jacobus was also working on getting their 3,4-diaminopyridine approved, and that came through this week. This was a pediatric approval, as opposed to use in adult patients – but physicians are free to prescribe the Jacobus drug off-label. And since the Jacobus trial also included adults, it’s not very far off-label at all. One also needs to consider the fact that the compound has been in actual human use since the 1980s, so it’s not like we’re talking some out-on-a-limb experimental therapy here.

The question is what the Jacobus drug will be priced at, and as I write this, no price has been announced. My guess is that it will be substantially less than the Catalyst price, giving insurance companies even more of an incentive to allow the off-label usage. This is apparently what investors think, too, because Catalyst shares fell off a cliff at the market open yesterday. But at the same time, I don’t think that the drug’s going to be given out for free any more, either. And although I think that the FDA has done the right thing here, it’s only after generally doing the wrong thing by rewarding companies too generously to start with, and that reward system is still in place.

32 comments on “Catalyst and Jacobus and LEMS: The Latest Chapter”

  1. Anon says:

    These greedy people are the reason why the chemists are getting pilloried and losing their job right and left. Shameless shenanigans! Sigma-Aldrich price for this item is at 5 Gm for 116.00!

    1. A Nonny Mouse says:

      That’s a rip off as well! $220/100g at Combi Blocks

    2. Nate says:

      To be fair, this item is not GMP grade / suitable for human use – and I can assure you it will cost quite a lot more than $116 to manufacture and distribute a drug product.

      1. PhotoDeTox says:

        Nonsense! Then why are there plenty of drugs you can get for a couple of bugs a package? Paracetamol? Ibuprofene?…. It’s a total rip-off.

        1. Isidore says:

          Because the market for paracetamol is in the hundreds of millions if not billions, whereas there are about 1000 LEMS patients in this country. This is a classic example of economies of scale.

          1. PhotoDeTox says:

            Yes, economics of scale certainly play a big role for. But how big? We are not talking 1000$/treatment for 3,4-diaminopyridine, we’re talking 400’000! That is a classic example of rip-off.

        2. Isidore says:

          There is, of course, a huge range between the price of paracetamol and what Catalyst charges for Firdapse. My sense is that Jacobus will not be able to take the price of 3,4-diaminopyridine down to the level of paracetamol or similar, given the costs of GMP manufacturing and the size of the market over which such costs will have to be spread. However, I suspect that their price will be much closer to paracetamol than to Firdapse and the company management has been reported to be promising to do just that.

      2. OldChemist says:

        Analytical grade is actually better than GMP.

  2. Bob Seevers says:

    Query: does the fault lie with FDA or with Congress? Remember what Will Rogers said, “Don’t pick on Congress, they’re the best men money can buy.”

    1. loupgarous says:

      Ultimately, FDA takes their orders (and funding) from Congress. I know, not that simple, and having a very highly technical mission, FDA has the right wattage scientific lasers to blind Congress but good.

      Or, I should say, did blind Congress with science. The Epipen Follies were something almost everyone in Congress could understand – FDA offering protected markets to a favored few Big Pharma firms to sell really old medicine for really high prices.

      (I’m waiting for nitroglycerin’s turn to be re-tested, so its package inserts can say “WARNING! Do NOT drop heavy things on or near Blowyerhandoff (nitroglycerin)!” and marked up a hundred dollars a dose, mostly for the new foam rubber safety packaging).

      This is something the new House can do to earn bipartisan praise – slam its own budgetary Mjollnir down on the price gouge-a-looza.

      FDA, after all, doesn’t need to subcontract safety testing to Big Pharma in exchange for letting them tell insurance companes “Fork over $100,000 or the kid DOESN’T get treated!” Congress can just appropriate the cash for those studies directly to CROs.

      1. LiberalPhD says:

        If Congress decides to pay for trials of new drugs itself, you’ll create new incentives for companies to totally clog the system and test all kind of crap since they’re not paying for the trials anyway.

        1. zero says:

          That can be managed. Require company-funded preliminary trials. Give the research board the power to reject a requested study and a mandate to use that power if submissions are abused. Partially (or fully) fund the cost of trials through industry fees that scale based on number of submissions.

          The average quality of clinical trials is very likely to improve if the people running them are trained statisticians and scientists who don’t have to answer to shareholders or a marketing department. Rigorous application of proper experimental design and well-powered statistical analysis should lead to far fewer incidents of underpowered studies, binning, p-hacking, etc., which is good for almost everyone.

          As with anything complex, the potential for abuse exists. The mechanism to establish this system will need to be robust and flexible enough to deal with idiots and financial hacks without killing off promising lines.

          How many startups might make it all the way to approval without getting snapped up if they don’t have to self-fund later phase trials? This one change alone could help diversify the market and reverse the trend of consolidation. That in turn could lead to more demand for research staff, leading to more candidate compounds.

  3. Nick K says:

    Catalyst deserve to be tarred and feathered. Despicable.

    1. a. nonymaus says:

      As Catalyst is a legal fiction, I’ll settle for tarring and feathering each member of Catalyst’s board of directors and scientific advisory board. None of these people were under duress when they decided to do this.

  4. Charles H. says:

    My personal beef is with the way the FDA removed generic availability of colchicine. All you can buy now is a trade marked version with considerably higher cost. But it’s essentially the same problem.

    This corruption is wide ranging, and affects a lot more people than are aware of it.

  5. Dapsonium fever says:

    Kind of ironic that Jacobus is pushed into the situation where they now need to earn money for something that they previously gave away. Good for them I say!!!
    Good karma for doing your dharma, or something like that.

    1. OnceaChemist says:

      Yes, but they are going to delight in being able to cut Catalyst off at the knees.
      Competition is good, and with Jacobus back in the market I predict the treatment price will stabilize much closer to ‘free’ than to $375,000.

  6. JustAnEngineer says:

    Few are going to care about how much the FDA are to blame when the inevitable “Drug company charges 400k for formerly free drug!” headlines hit.
    Swine like Catalyst are spooling out the rope for the entire industry and we’re all going to lose when the trap door opens.

  7. tnr says:

    I’m curious how Jacobus got the pediatric approval. CNN reports that there are estimated to be fewer than 20 pediatric subjects in the US with this disorder. So impossible to do any trial. I know there are some FDA provisions for an approval when the patient population is minuscule. I have just never seen that done. Maybe all they had to do was give the drug to 1 or 2 subjects and show it had some benefit with no adverse events. I have to admit – that is a pretty clever strategy.

  8. Anonymous says:

    I wonder if any Catalyst investors are thinking, “Unfair! The FDA undercut our smart investment with a surprise approval of a copycat drug! We invested in good faith hoping to make big bucks and now we are being screwed!” and if they thought about the LEMS patients who, a few months ago, were thinking, “Unfair! The FDA approval process is costing each of us $375,000 a year when it used to cost us zero! We are being screwed!”

  9. NMH says:

    Nothing will change. Congress is completely in the pocket of Pharma lobbying. So Derek’s job is safe…..

    1. anon the II says:

      It’s interesting that you say Derek’s job is safe considering that he’s lost it twice since I started reading his “blog”.

  10. Michael Richie says:

    Per the FDA statement, the study used for the Jacobus approval was not one that “also included adults”. It was a single double-blind with ONLY adult subjects. This was supplemented by “some” (unspecified) pediatric safety data, and computer modeling of pharmacokinetics in children and adolescents. Anyone who is concerned about the safety and efficacy of pediatric medications should be very disturbed by this FDA action.

    Compare this Jacobus approval to the Catalyst approval process. Firdapse is not simply the molecule Jacobus compounded for a few LEMS patients. For example, it does not require refrigeration. The approval process took years, involving two PIII trials and satisfaction of manufacturing practice standards, and required expenditure of substantial at-risk capital. Catalyst received a RTF from the FDA on their initial NDA which, on its face had more complete data than Jacobus approval was based on. (By the way, does anyone know when Jacobus submitted their NDA or ANDA, and when they were granted Priority Review, Fast Track, and Orphan status? The FDA statement says they granted them, but is there any evidence of this occurring prior to the approval statement release.)

    If the Jacobus approval is to be the new FDA standard, why should anyone bother running clinical trials using children and adolescents for any disorder where adult patients also exist? For that matter, why didn’t the FDA suggest that Catalyst extend its approval to pediatrics by running a computer simulation and providing some anecdotal safety examples? IMO, it was correct not to do so, and it was wrong to grant Jacobus approval on such a basis.

    The Jacobus approval represents scientific, clinical, and regulatory malpractice.

    1. Scott says:

      And how does one do an ethical trial when there are something like 20 pediatric patients TOTAL in the US (and maybe 500-1000 total *in the entire world*!) that would be treated by approving the drug for pediatrics?

      I would argue that it would be unethical to utterly deny approval due to size of study.

      I would also require several years of study-level tracking post-approval, though, and a particularly high level of attention to adverse reactions.

      1. Michael Richie says:


        I agree fully with your statement: “I would argue that it would be unethical to utterly deny approval due to size of study.”

        What’s objectionable is not that the study cited for approval was small, but rather that it included zero pediatric subjects. Derek’s comment in the blog that the study “also included adults” (implying some subjects were children/adolescents) is misleading – all subjects were adults.

        If it is unnecessary to actually run a pediatric trial, then what’s the justification for FDA limiting Firdapse (or any other medication) approval to adults?

    2. Comment says:

      How is your Catalyst stock doing?

      1. johnnyboy says:

        ‘zactly. Someone’s angry they lost their meal ticket.

    3. drsnowboard says:

      Pretty sure a working fridge costs less than 400K…

  11. Anonymous says:

    How about this idea. I see reasons why it could work and why it couldn’t work.
    Find some places in the world where an expensive or overpriced drug is available as a high quality approved Rx at an affordable price. Let’s say Acapulco or Johannesberg or Kuala Lumpur. The insurance company might say, “$375,000 OR we can pay for the entire family to take a 5-day vacation to Destination Rx, 5 star hotel, 1st class flight, and even cover the breadwinners’ missed salaries for a week away from work and it will still only cost us less than $50k. They can see a local doctor, get the Rx and buy a years supply of the Rx out of pocket and return to the US.” Insurance co. saves over $300k.

    In that scenario, the insurance co isn’t paying for anything medical or Rx-ical, only providing a free trip. If the insurance co DID say they were paying for something medical, a patient could argue that they have approved a treatment and a drug and agreed to pay for it. It’s not fair to add “but only if obtained outside the US.” The patient (or US drug co) could say, “If you approved the treatment and the Rx, I want it right here, where I am, In The Pipeline, even tho’ it costs $375,000.”

    Legal opinions, anyone? Financial opinions?

    1. Anon2 says:

      The only issue I see is that you can only bring back a 60 day supply of a med purchased internationally. I pick up my desloratadine at the Costco in Canada when I’m there…

      1. Anonymous says:

        Once every 60 days? Patient and assistive traveling companion only; 2 days only on-site; 3-star hotel; economy class travel; … probably still less than $50k/year and a lot less than $375k. Would insurance industry regs allow that?

  12. biotechtoreador says:

    The FDA clearly bent over backwards to approve Jacobus’ drug and, to be fair, CPRX are scumbags. I wonder what precedence this sets? Is this a backdoor to let other companies subvert ODD?

Comments are closed.