Armour Thyroid Price Increases: Is it Price Gouging?

armour thyroid, price increases, allergan, price gouging
Mary Shomon

The price of Armour Thyroid, a brand name of natural desiccated thyroid, is going up. How much more remains to be seen. But as of October 2015, the price has been skyrocketing, with a 50% increase in just the period from July through September of 2015. Interestingly, at this same time, the issue of drug company price gouging also came front and center with the news of Turing Pharmaceuticals and their astronomical price increase for a drug that treats infections in AIDS patients.

Turing's owner, former hedge-funder Martin Shkreli, bought the license for the drug Daraprim, and immediately raised its price by 5,455 percent - from $13.50 to $750 per tablet. Shkreli's story, and his unapologetic attitude toward making huge profits on otherwise inexpensive drugs, received a great deal of negative press coverage, and exposed to the public the underside of drug company price gouging, an issue that many patients face with various drug prices.

Following the news, Democratic presidential candidate Hillary Clinton posted on Twitter: "Price gouging like this in the specialty drug market is outrageous."

So what does this all have to do with Armour Thyroid? Well, Armour Thyroid, a brand name of natural desiccated thyroid, was owned for a many years by Forest Laboratories. Forest sold the drug to Actavis, which was then acquired and folded into the pharmaceutical giant Allergan. Allergan is known for some big-name drugs, including Botox, Latisse, Restastis, Atonel, and others.

And now, Allergan owns Armour Thyroid, the first and oldest thyroid hormone replacement drug on the market, and the top seller in the natural desiccated thyroid drug category.

CNBC analyst Jim Cramer spoke with Allergan CEO, Brent Saunders about the issue, and Clinton's campaign promise to limit price gouging in the drug industry if elected.

According to Saunders: "All of our intelligence says that it is going to be very hard for Hillary, or any other candidate, to really have a profound impact on drug pricing. That being said, we have to take this very seriously because it creates a lot of pressure on the system."

Saunders then told Cramer that Allergan does not take part in "egregious price increases." He also said: "What we have is a fantastic growth company. We have a company that is going to be growing top line double digit, expanding margins..."

Price Increases: All Natural Desiccated Thyroid, or Just Armour Thyroid?

In some cases, when prices of drugs rise, you see prices of all the drugs in that category rise, due to increased manufacturing costs, raw materials costs, and other issues that affect manufacturers across the board. But that has not been the case with Armour Thyroid.

As noted, Armour's price under new owner Allergan has gone up 50% in just three months during the summer of 2015. Meanwhile, the other key brands of natural thyroid drugs, Nature-Throid and Thyroid WP -- made by RLC Laboratories -- have not had cost increases. And while there have been shortages in some pill sizes, the generic natural thyroid drug, known as NP Thyroid, made by Acella, has also kept its costs steady.

So what accounts for only one particular NDT having such a dramatic price increase?

Allergan's "Explanation" for the Price Increases

I asked Allergan/Actavis for a comment regarding their price increases. (I had to make multiple inquiries before they agreed to respond.) I finally received the following statement, from Mark Marmur, the Director of Corporate Affairs:

Allergan does make business decisions that require a price increase of certain products because of the rising costs associate with producing medicines and ensuring they are available for patients. In the case of Armour Thyroid, Allergan has had to raise the price to support investments in the manufacturing process as well as development efforts for the product which are necessary to ensure supply to patients.

Allergan did increase the price of Armour Thyroid 50% on July 1st, 2015, bringing the weighted average cost (WAC) per pill to $0.63, while, Synthroid, has a WAC of $0.99 per pill. The price of Armour Thyroid is in line with the branded products in this category, and remains significantly lower than the average cost per pill of the other medicines in this space.

We encourage patients to speak with their doctors and insurance providers to find out more about their treatment options.

It's not clear what "space" Marmur means. The comparison pricing site finds discounted prices -- with in-store coupons or online purchase -- for various drugs. An October 2015 search at GoodRx showed that for Armour Thyroid, 30 tablets of 60 mg dosage, the prices ranged from $20 to $26. (60 tablets of 60 mg ranged from $39 to $44). The other brand name natural thyroid drug, Nature-throid, was $7.50 to $14 for 30 tablets, and $16.50 - $20.50 for 60 tablets. The generic NP Thyroid from Acella was $8 to $13 for 30 tablets, and $13 - $24 for 60 tablets.

It's hard to understand how "rising costs of producing medicines" would affect one drug company and not the others, requiring such a dramatic cost increase. And while I'm no math whiz, calculating the average cost per pill was pretty simple. I took the average prices, divided them by 30 or 60, and came up with the following:

Armour 60 mg$.77$.69
Nature-throid 65 mg$.36$.31
NP Thyroid Generic 60 mg$,35$.31

Looks like Armour Thyroid is running on average about 100% more per pill -- which is NOT  "significantly lower" as the corporate spokesperson said -- when compared to the other natural thyroid medicines for the same dosages and number of pills.

Is Allergan / Actavis Price Gouging?

Without access to the specifics of the product costs for Armour Thyroid (which are proprietary), and without specifics on the costs involved in "supporting investments in the manufacturing process" (which are proprietary), we don't know if the price increase in Armour Thyroid reflects actual costs that the company is incurring, or whether new owner Allergan arbitrarily decided to dramatically increase their profits on Armour by increasing the price of the drug...aka, price gouging. 

What Can Patients Do?

The most obvious action you can take is to ask your doctor to switch you to either Nature-throid or the NP Thyroid generic from Acella. If you are paying for your medication out of pocket, this can result in your paying half of what you are paying for Armour Thyroid.

If you are paying a high co-pay for insurance-covered handling of Armour prescriptions, it would be useful to ask your insurer if the co-pay would be less for one of the other drugs in this category that cost half the price of Armour. You may be able to realize cost savings on your co-pay totals.

Guidelines Regarding Switching from Armour to Another Drug

  • If you are switching from Armour to Nature-throid, a 65 mg Nature-throid tablet is considered equivalent to a 60 mg tablet of Armour Thyroid. (The extra 5 mg is other ingredients, and not the thyroid component.) There are similar differences in the other doses of Nature-throid, versus Armour.
  • If you switch to Nature-throid, your doctor will need to rewrite you a new prescription. Your pharmacist should, however, be able to substitute the generic NP Thyroid from Acella for Armour without a new prescription.
  • If you do switch from Armour to a different manufacturer of natural desiccated thyroid, you should be retested in six to eight weeks, to determine if you need to adjust the dosage in any way. Sometimes, because the same size dosage from different manufacturers contain different fillers, binders, and formulations, you may absorb it differently.

Share Your Thoughts...

Want to talk about the issue? You can join the discussion about Armour's price increases at the Armour thread at my Facebook Thyroid Support Page.

                                                             TALK ABOUT IT NOW!.

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