Friday, May 28, 2010

Death Of Propofol

If a company cannot make money from a product, it will stop making it.  As I feared, Teva Pharmaceuticals has announced that it will stop the manufacture of propofol in the wake of a $356 million judgement against it by a jury in Las Vegas.  The greedy plaintiffs and their lawyer along with an ignorant vigilante jury ruled against the drug company despite no evidence of any wrong doing on its part.  The real culprit of the outbreak of hepatitis C infections in Vegas were the doctors and nurses at an endoscopy center who drew syringes of propofol for multiple patients from bottles that were clearly marked for single use only.  The doctors settled for less than $3 million and the owner of the center declared bankruptcy. That wasn't good enough for the plaintiff, Henry Chanin, and his lawyer, Robert Eglet.  Naturally they went after much deeper pockets, despite the dubiousness of their case.  Lucky for them, they rolled the dice and wound up with a jury that could not or would not see the fallacy in their theory on who was really responsible for spreading hepatitis to the patients.

This leaves only two manufactures of generic propofol: Baxter, which was also found "guilty" by the same jury and punished with a nine figure judgement, and APP, a European company that makes propoven, which is thought to be bioequivalent to propofol.  Generic drug makers live on single digit profit margins, as cost is the main differentiator of generic medications.  Total annual sales of propofol in the U.S. is about $500 million.  The Vegas jury's punitive damages against Teva and Baxter was $500 million.  You do the math and figure out why Teva is pulling out of the propofol market. Even if a judge later reverses this outrageous verdict, the threat of gargantuan liability awards against propofol makers will forever hang over their heads.  No sane company and its stockholders want that kind of unpredictability and no insurance company will want to cover this potential financial disaster.

Thanks to this bunch of yahoos in Vegas, the choice of anesthetic drugs just became significantly smaller and costlier.  Propofol is difficult to manufacture to begin with because it is easily contaminated.  There was an extreme shortage of the anesthetic last year that was only recently remedied.  If the other companies continue to make propofol or its equivalent, they will have to raise prices, maybe even significantly, to cover the cost of their liability insurance, if they continue to make it at all.  Anesthesiologists may then resort to fospropofol. Fospropofol is classified by the DEA as a controlled substance, is much more expensive than propofol, and not widely available yet. 

So if you need a colonoscopy or any kind of surgery in the near future, you better call your doctor and make an appointment ASAP.  For the first time, a drug that has been approved by the DEA will be pulled from the market not because of any risks to a patient's health, but because of the greed of lawyers and plaintiffs.

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