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Health Care Policy and Law
March 9, 2020

The Skyrocketing Cost of Rectal Indomethacin

Author Affiliations
  • 1Division of Gastroenterology and Hepatology, Department of Medicine, Medical University of South Carolina, Charleston
  • 2University of Pittsburgh School of Pharmacy, Pittsburgh, Pennsylvania
  • 3Center for Pharmaceutical Policy and Prescribing, Health Policy Institute, University of Pittsburgh, Pittsburgh, Pennsylvania
  • 4Division of General Internal Medicine, University of Pittsburgh School of Medicine, Pittsburgh, Pennsylvania
  • 5Center for Health Equity Research and Promotion, VA Pittsburgh Healthcare System, Pittsburgh, Pennsylvania
JAMA Intern Med. Published online March 9, 2020. doi:10.1001/jamainternmed.2020.0099

Acute pancreatitis is the most common major complication of endoscopic retrograde cholangiopancreatography (ERCP), occurring in 3% to 15% of cases and in up to 40% of procedures if preventive measures are not used. About 5% of patients who develop pancreatitis after ERCP have a severe course, characterized by local and systemic complications, prolonged hospitalization, and occasional death.1 Considering that about 600 000 ERCPs are performed annually in the US, ERCP-related pancreatitis is an important and costly problem.

Rectally administered nonsteroidal anti-inflammatory drugs (NSAIDs) have come to play a central role in the prevention of post-ERCP pancreatitis. In 2008, a meta-analysis of exploratory trials suggested benefit associated with rectal indomethacin or diclofenac.2 A 2012 confirmatory randomized clinical trial,3 on which one of us (B.J.E.) was an author, demonstrated that a single 100-mg dose of indomethacin given at the time of ERCP reduced the incidence of pancreatitis by approximately 50%. Following the publication of this and other trials, as well as changes to professional society guidelines,4 the use of rectal indomethacin to prevent post-ERCP pancreatitis has substantially increased.

Unlike other indications for which NSAIDs are effective by any route of delivery, post-ERCP pancreatitis appears to be prevented only by rectal administration immediately before, during, or after the procedure.5 The underlying reasons are unclear, but first-pass liver metabolism of oral NSAIDs and drug disposition by the rectal microbiome may be important factors. Although both indomethacin and diclofenac are effective, rectal diclofenac is not commercially available in the US. Thus, there is no alternative to rectal indomethacin for the prevention of post-ERCP pancreatitis.

In 1965, the US Food and Drug Administration (FDA) first approved indomethacin; in 1984, it approved a suppository formulation. Because of the widespread availability of oral alternatives, indomethacin suppositories had limited use for many years. Only 1 manufacturer and 1 distributor supplied a small commercial market. In 2005, the wholesale acquisition cost of a 100-mg dose was approximately $2 (Figure). In 2012, when the effectiveness of rectal indomethacin for post-ERCP pancreatitis was demonstrated in a clinical trial,3 the price had risen to $17. By 2019, the price was $340, representing an approximate 20-fold increase from 2012. By comparison, the average retail cost of widely used generic drugs in the US dropped during this time period.6

Figure.  Monthly Wholesale Acquisition Cost per 100-mg Dose of Rectal Indomethacin, January 2005 to September 2019
Monthly Wholesale Acquisition Cost per 100-mg Dose of Rectal Indomethacin, January 2005 to September 2019

Data points indicate the wholesale acquisition cost each month. Source: Data are reproduced by AnalySource, with permission by First Databank Inc (https://www.fdbhealth.com/policies/drug-pricing-policy/).

In theory, increasing demand for a single-source medication, such as rectal indomethacin, should lead additional suppliers to enter the market, lowering prices through competition. However, since the market for a drug to prevent post-ERCP pancreatitis is relatively small, potential profits from the sale of rectal indomethacin have been insufficient to encourage additional companies to manufacture and distribute rectal indomethacin. Thus, 1 manufacturer has a de facto monopoly.

In the case of indomethacin suppositories, the drug was sold for years by Iroko Pharmaceuticals, which quintupled its price from $34 in 2016 to $170 per 100-mg dose in January 2018 (Figure). The reasons for this sharp price increase are not clear. Then, at the beginning of 2019, the company sold 4 of its drugs, including indomethacin suppositories, to a small company named Egalet, which was in the midst of bankruptcy proceedings. After closing this deal in the first quarter of 2019, Egalet—now named Zyla Life Sciences—doubled the wholesale acquisition cost of indomethacin suppositories, along with the prices of other drugs it acquired.7

Two issues complicate the pricing of rectal indomethacin. First, the medication is not approved by the FDA for the prevention of post-ERCP pancreatitis. The impetus for the 2012 investigator-initiated (and National Institutes of Health–sponsored) trial of indomethacin for ERCP was scientific and not commercial. Because there was no intent to change the prescribing information, the FDA granted an exemption from filing an investigational new drug application. In the absence of an investigational new drug approval, the use of rectal indomethacin for preventing post-ERCP pancreatitis remains off label, which means that insurers may not provide coverage. Thus, patients may directly bear the financial burden of these sizeable price increases.

Second, rectal indomethacin is often subject to hospital pharmacy upcharges. When a medication such as indomethacin suppositories is administered in a hospital outpatient department (where most ERCPs are performed), it is subject to the hospital’s chargemaster. Thus, the hospital’s charge for the medication may be double or triple the list price, or more in some cases. For example, in a review of publicly reported 2019 hospital chargemasters in California, we found that the price of 100 mg of rectal indomethacin at 5 hospitals that disclosed these charges ranged from $650 to more than $5000.8 Although pharmacy upcharges are intended to support infrastructure and personnel to store and dispense the medication, these charges are often inflated during price negotiations with insurers, who ultimately pay a fraction of the listed charge. For the off-label use of drugs that are not covered by insurance or Medicare Part B (which does not pay for hospital outpatient drugs like indomethacin that are considered “usually self-administered”9), the patient may be billed the full hospital chargemaster price.

The story of rectal indomethacin demonstrates once again the failure of the market alone to ensure sufficient competition for single-source drugs. The FDA Reauthorization Act of 2017 created a pathway for the designation of drugs with inadequate competition as Competitive Generic Therapies, meaning there are no generic medications or only 1 generic version available, as is the case for indomethacin suppositories. This designation provides for expedited approval of new generic drugs and additional incentives for market entry. However, such regulatory incentives do not guarantee the entry of additional suppliers to the market. Other solutions have been proposed, including the importation of medications from other countries in instances of inadequate generic competition with associated price hikes as well as government or nonprofit manufacturing of drugs.

Another approach would be to source rectal indomethacin from compounding pharmacies, which, based on our inquiries, charge as little as $2 for a 100-mg dose. If large numbers of hospitals were to use compounding pharmacies as their source of indomethacin suppositories, the manufacturer might reconsider its pricing strategy. However, the market for indomethacin suppositories may not be large enough to elicit the expected response. Additionally, the widespread use of compounding pharmacies may raise concerns about medication quality and patient safety. Although concerns about the safety of compounded medications have usually applied to injectable products, these pharmacies have less regulatory oversight than drug manufacturers. Moreover, the FDA has typically limited widespread compounding when an approved product is available.

Rectal indomethacin is another example of a single-source drug whose price has been markedly increased by companies seeking to maximize profits in a regulatory environment that does not prevent them from doing so. Other recent and well-publicized examples include those by Turing Pharmaceuticals and Valeant Pharmaceuticals; both companies abruptly raised prices on several newly acquired generic drugs after judging the market too small to sustain additional competition. However, the story of indomethacin suppositories has unique features, given the medication’s off-label status and its administration in hospital outpatient departments. With the scrutiny of both drug pricing and hospital costs, effective solutions are needed to ensure access to rectal indomethacin without exorbitant prices that are often borne by patients.

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Article Information

Corresponding Author: Walid F. Gellad, MD, MPH, Division of General Internal Medicine, University of Pittsburgh School of Medicine, 3609 Forbes Ave, Pittsburgh, PA 15261 (walid.gellad@pitt.edu).

Published Online: March 9, 2020. doi:10.1001/jamainternmed.2020.0099

Conflict of Interest Disclosures: Dr Elmunzer has received personal fees from Takeda Pharmaceuticals for consulting. Dr Hernandez is funded by grant K01HL142847 from the National Heart, Lung, and Blood Institute. No other disclosures were reported.

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Elmunzer  BJ, Waljee  AK, Elta  GH, Taylor  JR, Fehmi  SM, Higgins  PD.  A meta-analysis of rectal NSAIDs in the prevention of post-ERCP pancreatitis.  Gut. 2008;57(9):1262-1267. doi:10.1136/gut.2007.140756PubMedGoogle ScholarCrossref
Elmunzer  BJ, Scheiman  JM, Lehman  GA,  et al; U.S. Cooperative for Outcomes Research in Endoscopy (USCORE).  A randomized trial of rectal indomethacin to prevent post-ERCP pancreatitis.  N Engl J Med. 2012;366(15):1414-1422. doi:10.1056/NEJMoa1111103PubMedGoogle ScholarCrossref
Dumonceau  JM, Andriulli  A, Elmunzer  BJ,  et al; European Society of Gastrointestinal Endoscopy.  Prophylaxis of post-ERCP pancreatitis.  Endoscopy. 2014;46(9):799-815. doi:10.1055/s-0034-1377875PubMedGoogle ScholarCrossref
Kubiliun  NM, Adams  MA, Akshintala  VS,  et al; United States Cooperative for Outcomes Research in Endoscopy (USCORE).  Evaluation of pharmacologic prevention of pancreatitis after endoscopic retrograde cholangiopancreatography: a systematic review.  Clin Gastroenterol Hepatol. 2015;13(7):1231-1239. doi:10.1016/j.cgh.2014.11.038PubMedGoogle ScholarCrossref
Schondelmeyer  SW, Purvis  L. Trends in retail prices of generic prescription drugs widely used by older Americans. Accessed January 2, 2020. https://www.aarp.org/content/dam/aarp/ppi/2019/04/trends-in-retail-prices-of-generic-prescription-drugs-widely-used-by-older-americans.pdf
Herman  B. Drug company raises price of pain reliever by 70%. Accessed January 2, 2020. https://www.axios.com/drug-company-egalet-zorvolex-price-hike-6aceeecf-9a36-40e2-9297-bc23cfef3ffe.html
California Office of Statewide Health Planning and Development. 2019 Chargemasters. Accessed December 13, 2019. https://oshpd.ca.gov/data-and-reports/cost-transparency/hospital-chargemasters/2019-chargemasters/
Office of the Inspector General. OIG policy statement regarding hospitals that discount or waive amounts owed by Medicare beneficiaries for self-administered drugs dispensed in outpatient settings. Accessed December 13, 2019. https://oig.hhs.gov/compliance/alerts/guidance/policy-10302015.pdf
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    1 Comment for this article
    Compounding Suppositories
    Kenneth Dandurand, BA, BS, R.PH.,MS | Clinical Pharmacy Associates
    I agree with the authors that seldom used off-label drugs can defy reasonable pricing. The use of compounding pharmacies can get tricky as the FDA can classify the making of significant batches of product that are not patient specific as manufacturing creating a need for a manufacturing license. The Hospital Pharmacy can compound suppositories for patient use and there are several sources on-line for formulas. Ingredients are mainly polyethylene glycol and indomethacin powder.