APP Pharmaceuticals plans to increase the price of heparin due to the cost of raw materials, additional testing and a new hiring initiative.
APP noted that it is currently the sole supplier of therapeutic heparin vials to the U.S. market, because drug impurities have forced the other U.S. supplier of heparin vials, Bayer Healthcare, to withdraw its product from the market.
APP said it has completed testing on all lots of heparin raw material dating back to January 2006 – all products have been found to be contaminant-free.
The Schaumburg, Ill.-based company cited among its reasons for the price increase:
- Dramatic increase in raw material costs;
- The need to secure an uninterrupted delivery;
- The increased costs associated with the additional required testing; and
- The hiring of additional employees.
For dialysis patients, the price adjustment translates to about 6 cents per 1000 units of heparin, and approximately 48 cents per dialysis treatment, according to the company.
According to the May 2 Stanford and Fresenius Research report, the reimbursement for managed care dialysis treatment is approximately $614, with an average reimbursement per dialysis treatment of $325, taking into consideration the Medicare reimbursement rate of $237 per dialysis treatment. Thus, APP said that the impact of the total cost of heparin at its adjusted price represents less than 0.5 percent of the total cost of the dialysis treatment.
“We recognize the difficulties associated with this heparin crisis. Our primary goal is to ensure the uninterrupted supply of the highest quality safe material for our patients. We appreciate APP’s efforts in averting a shortage of this life sustaining product,” said Richard Norling, president and CEO of Premier, a U.S. group purchasing organization, responding to APP’s price adjustment.