Huge price hike for tuberculosis drug rescinded after public outcry

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Cycloserine, an important tuberculosis drug, has had a roller coaster ride over the past few days with its prices raised to a whopping $10,800 for 30 capsules from $500. However, after a huge outcry, the prices were reduced to just over $1000 for 30 capsules.

Cycloserine is used to treat multidrug-resistant tuberculosis – a serious form of the disease that does not respond to the usual drugs. Though the disease is not a common one, the drug is important as half of the cases identified each year in the US are recommended cycloserine.

The whole story goes like this. Rodelis Therapeutics acquired Cycloserine from The Chao Center, a nonprofit organization affiliated with Purdue University, on August 19. At the time the drug was priced at $500 for 30 capsules. The agreement was such that The Chao Center would continue to manufacture Cycloserine and Rodelis would provide commercial support.

Soon after the acquisition, the new owner Rodelis increased the price of the drug to $10,800 for 30 capsules. The Chao Center was effectively unaware of this strategy. “We discovered literally on Thursday the strategy that had been undertaken” by Rodelis, said Dan Hasler, the president of the Purdue Research Foundation, which has oversight of the manufacturing operation. “We said this was not what we had intended.”

This brought the two organization back to the talking table and Rodelis has agreed to give the drug back to the original owner.

“Rodelis Therapeutics and The Chao Center mutually agreed last week that it is in the best interests of the patients to return the rights of Cycloserine to The Chao Center”, Rodelis confirmed in a statement.

Though the prices have been reduced, a pack of 30 capsules still cost $1,050 and this, according to Hasler, is required to stem the losses.

Cycloserine’s history

Cycloserine, known by the brand name Seromycin, went on sale in 1955. Produced by Eli Lilly and Company the drug was dropped in 2000 partly because the company was getting out of antibiotics. But in 2003, the company transferred the rights and manufacturing skill to generic drug companies in India, China, South Africa and elsewhere to supply the regions most affected.

Four years later, in 2007, the company gave the rights of the drug for the US and Canada to the Chao Center for Industrial Pharmacy and Contract Manufacturing. However, since it acquired the drug, Chao Center has lost about $10 million on the drug since 2007 because of the small number of patients and high regulatory costs. This is when Chao was contacted by Rodelis and offered them to buy the drug.