Why Big Pharma is Causing the Adderall Shortage

By Moe Tkacik 11/17/11

A persistent shortage of the popular ADD pill is driving a nation of Adderall users to distraction. Naturally, it all comes down to drug company profits.

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The ADD drug deficit is blowing minds nationwide Thinkstock

When Jay V.'s pharmacist refused to fill his monthly prescription for Adderall, the normally buttoned-up Wall Street broker reacted with atypical panic. After subjecting the shocked pharmacist to a lengthy harangue on the subject of price-gouging drug companies,  he meekly slipped a few bills across the counter in an attempt to bribe her. "I don't care what this costs, it's cheaper than cocaine," he explained. And even if it isn't, you can’t put a price on never having to go back to doing bumps in the work bathroom to get through late night deal committee meetings, can you?

Unmoved by Jay's tantrum, the pharmacist cooly informed him that she was reserving her dwindling supply of the pills for regular customers. She went on to warn him  that the price for the drug had doubled in two weeks, and the clock was ticking. "They're down to one bottle,” Jay told me a few days after this unfortunate encounter.  “If I don't get them a prescription  by the end of the week I forfeit my right to it." If he can tear himself away from the 16-hour days he cites as the reason he needs Adderall to begin with, he'll be fine. At least, for the next month or so.

If addiction is a subject that you often think about, it's easy to overlook its significance in the cold, objective Realpolitik scheme of things. We usually imagine addicts as desperate folks trading their dollars for a few rocks of crack.: But he truth is it's a great fucking business model. From the British East India Company to the Bronfman clan to Duke University, history is chock full of abject mediocrities who earn billions by getting people hooked on their products. Adderall is the latest example.

The first stories about the Adderall shortage began cropping up last March, when ADD sufferers in Texas, Georgia and other states told tales of panicked multi-state manhunts and exorbitant drug ransoms. But the real panic set in around mid-August, when suburban pharmacies were no longer able to obtain the drug. The papers attributed the sudden drought to "back-to-school" season.

For the past six months, newspapers and websites across the nation have reported on the mysterious shortage of the drug, which has apparently lead to fistfights in upscale New York pharmacies and meltdowns in South Central L.A. But nobody is quite sure what has caused it. Amphetamine salt—Adderall’s active ingredient—has been the subject of heady dispute within the medical profession since the drug company Smith, Kline and French began peddling the stuff in 1935, but for decades just about the only thing medical community generally agreed about was that it was not addictive. The SKF sales department did, however, have a term for the loyalty it engendered among consumers: “stick.”

The ratcheting up of the Drug War in the early 1970s brought an end to the widespread use of those first-generation amphetamines, but naturally amphetamines stuck around in certain circles. In the '90s, when upper-middle class American kids were stricken with a modern epidemic of ADD, doctors began widely prescribing amphetamines as a prophylactic. The pills soon  began popping up at the nation’s truck stops and trailer parks, and later in Wall Street boardrooms.  For the same reason crystal meth never found much "stick" as an ADD drug—although it's out there, under the brand name Desoxyn—Adderall users for the most part never identified as "addicts" before the nightmare shortages of this year.

You can track the spread of Adderall panic on the message boards at ADDForums.com, whose administrators have painstakingly aggregated all Amphetamine Famine-relevant posts into a single "sticky" thread. The first stories about the amphetamine shortage appeared in local papers last March, when unlucky ADD sufferers in pockets of Texas, Georgia and a few other states were forced to endure multi-state manhunts and pay exorbitant ransoms in order to refill their scrips. But the real Adderal panic set in around mid-August, when a shortage attributed to "back-to-school" season ravaged the suburbs.

A guy in New Jersey who'd been paying $9 for his monthly prescription for years was forced to to scour every pharmacy in a 50-mile radius in an attempt to refill his prescription. Three days later he found a store that still had the pills in supply, but he was forced to cough up $99 to get them. In Massachusetts a woman claimed that she had called 25 pharmacies before finding one that agreed to fill her prescription—for $408. After reading about her plight, a  fellow citizen from Massachusetts offered to share a spreadsheet of eastern Massachusetts and New Hampshire drug stores he'd compiled during  his own Adderall search. (He'd listed 142 stores by the time he found a pharmacy that filled his meds.) Finally this month came the first plaintive posts from New York, where a young woman who'd spent all day running to different drug stores wondered whether it was more dehumanizing to be regarded as some sort of "crack addict" by pharmacists, or just "feeling like a junky" to begin with.

In Los Angeles,  an electrician facing his third day without the meds took to the web to post the following message:

"Been taking adderall for over 13 years and now I can't refill my script…What am I supposed to do? Just get over it? Just suck it up, go cold turkey and maybe I'll get my script filled in a few months? How can I keep working on dangerous equipment with high voltage everywhere and I can't focus? How can I commute 2 hours a day without falling asleep at the wheel? I feel so alone. Don't know where to go at this point."

Adderall is one of hundreds of drugs that are in short supply due to vagaries in the medical system.  But because of its addictive properties and its widespread use, the drug's absence has caused a wrenching national  withdrawal. The  crisis is so dire that earlier this month President Obama issued an executive order directing the Food and Drug Administration to take urgent action to address it. The vast majority of the drugs on the shortage lists are generic injectable drugs used in hospitals—delicate, low-profit, highly sensitive substances whose manufacturing plants can be decommissioned for months (or ever) over a few stray microbes. But Adderall is a high-margin pill or capsule (Adderall XR, or exended release—marketed as “abuse proof”) made from simple amphetamine salts. A dozen manufacturers work round the clock to produce the pills, raking in billions of dollars a year. Despite the alleged shortage none of them has reported any major interruptions. In fact they're all upping their output to meet increasing demand.

So what happened to all that Adderall? As it turns out, the manufacturing shortage appears to be a manufactured crisis—orchestrated by the same company, Shire Plc, that got millions of Americans hooked on the drug in the first place.

Amphetamine-based ADD drugs have suffered periodic supply hiccups stemming from their strict regulation by the Drug Enforcement Administration, which levies annual quotas on the amount of stimulants it  allows to be legally produced each year.

Adderall was first introduced to the American public by Richwood Pharmaceuticals during another drug crisis, the Great Ritalin Scare of 1993. Back then, drastic shortages of that groundbreaking ADD drug prompted thousands of panicked parents to switch to Adderall, despite Richwood's dubious pedigree as the startup of a former Kentucky schoolteacher, Roger Griggs. Following in that tradition, Shire is now attempting to use contrived Adderall shortages as a chance to convert ADD sufferers (and their long-suffering parents) to the cause of their new ADD drug, Vyvanase.

Amphetamine-based drugs have endured supply hiccups for several decades, stemming from  strict regulation by the Drug Enforcement Administration, which imposes strict limits on the amount of stimulants that are produced each year.

Griggs had spent years trying to sell pediatricians on a cheaper Ritalin alternative, a dexedrine-based compound that his company marketed as "Dextrostat." But since Dexedrine had acquired a lot of negative press during its heyday in the ‘60s and ‘70s,  Dextrostat never took off with the public.  Griggs was undaunted by the setback. Soon after Dextrosat was pulled from the market, Griggs began hyping a less infamous diet drug named Obetrol, concocted from a heady mixture of amphetamine salts.Though the new drug contained a 75% infusion of dexedrine, sales began to skyrocket. When Griggs put his company up for sale a year later, Richwood was first in line. In June 1994, after acquiring its upstart competitor,  Richwood renamed  Obetrol "Adderall,” and began hawking the drug to pediatricians as a longer-lasting Ritalin alternative. Unfortunately Richwood didn't bother to notify the FDA of their new campaign. Several months later, the agency ordered the company to stop marketing of Adderall and to start clinical trials of the drug. When the Feds officially approved Adderall as a treatment for ADD, Richwood still enjoyed a two year head start over its competitors. A new indication approving use of the drugs for children as young as three was an added bonus.

 Americans currently spend over $4 billion on ADD-related drugs, ten times more than they did in 1996. A huge chunk of this sum is spent on Adderall,  which remains the reigning market leader. After enjoying years of escalating profits, Shire, which held the the patent for the drug, knew that its patent would expire. Worried that it would lose ground to upstart generics, the company brought a new  ADD drug to market. Vyvanse was a reformulated, “cleaner” version of the stimulant dexadrine.  Shire—which is now domiciled in Ireland to avoid American taxes—has been avidly pursuing the Adderall market since 2007,  when it spent a staggering $2.6 billion to acquire New River Pharmaceuticals, the biotech firm that developed Vyvanse. With the patent on Adderall XR set to end in 2009, Shire otherwise faced the prospect of a market flooded with cheap generics, a collapse in sales of its cash cow, and nothing in its pipeline because it didn’t actually develop drugs but merely sold them.

But where Adderall had a cheaper price and more potent effect in its favor the last time around, the selling point of Vyvanse is the opposite: it's considerably more expensive than Adderall—this is, after all, the whole point of getting people to switch—and its primary competitive advantage over other drugs is a certain kind of diminished potency: its molecular structure is specifically designed to render the drug impervious to serious junkie behavior. In clinical trials conducted on intravenous substance abusers, for example, injected Vyvanse proved barely more appealing than a placebo. Functionally, this makes Vyvanse a lot like Adderall XR, which is equally impossible to snort, crush, inject and whatever else junkies supposedly do. But from a business perspective it was the holiest of Holy Grails, because its active ingredient was an entirely new molecule, with its own dedicated line item within the DEA's roster of controlled substances and patent protection until 2023.

Initially, the company had been vying for the DEA to classify its new substance, "lisdexamphetamine", on a less restrictive schedule than other amphetamines, enabling doctors to write prescriptions for refills and other such conveniences. Its lobbying failed, though the agency can always reclassify it if Shire can marshal enough evidence of its magical "addiction proof" characteristics.

In the meantime Shire tried to convert devotees of its patent-expired amphetamines to Vyvanse, its new ADD drug. This proved to be a tall order. Vyvanse's effects on patients were almost indistinguishable from Adderall's, though the new drug was priced five or ten times higher. But nearly 50 years since "Obetrol" lost its patent, Shire maintains a partial corner on the Adderall market thanks to  two legal settlements it reached in 2006 with the drug's generic manufacturers Teva Pharmaceuticals and Impax Laboratories. When they were awardedhe generics found themselves unable to fulfill the demands for the drug. The courts awarded Teva and Impax the rights to sell generic versions of Adderall XR starting in 2009—and subcontracted Shire with the job of actually manufacturing the drugs for both companies until Teva and Impax could handle production themselves. (Their applications to produce the drugs had been held up by Shire.)

 In the spring of 2009 the price of Adderall plummeted along with Shire's profits. Sales nosedived to $67 million in the second quarter of the year from about $300 million. But the next year Shire's Adderall revenues started to creep up again, reaching $100 million for the third quarter of 2010. Then in November, Impax sued Shire, alleging that the company was botching its orders, supplying fewer pills than agreed upon or bailing altogether. Teva quickly filed a lawsuit that making similar allegations. At the same time, insurance companies inexplicably began refusing to cover generic Adderall XR, claiming the generic wasn't yet FDA approved or that its "therapeutic equivalence" to the branded drug was still unproven.

The insurer's lawsuit is still in discovery and isn't slated to go to trial in spring. But as consumers found themselves hit with massive new bills and Adderall users scoured the the earth to fill their prescriptions, Shire's Adderall sales numbers kept edging up, finally hitting $150 million for the quarter that ended last month. But Impax—which booked $47 million in Adderall XR sales for the same quarter continued to grouse about getting shortchanged. Without breaking out Adderall numbers, Teva announced that its generic drug sales in the U.S. for the same quarter had cratered by half. But the shortage had one beneficiary.  Shire reported a record $200 million revenues for Vyvanse.

But it was a most torturous quarter for ADD sufferers lacking the kind of health care plans that cover $400-a-month brand-name drugs, because if you couldn't afford to switch to Vyvanse or brand-name Adderall XR, you were stuck trying to switch to generic instant-release Adderall at the same time as a million other panicked tweakers…or failing that, Ritalin, which ran out of stock shortly thereafter…or failing that, ponying up the better part of an extra rent check to fill your prescription.

Shire has publicly blamed DEA quota restrictions for its anemic generic shipments; the DEA has denied the company's charges in a statement that is notably short on specifics. A chemist at one of the five authorized “active ingredient” manufacturers in the business of supplying pharmaceutical companies with amphetamine says he and his colleagues “have all been scratching our heads trying to figure out what's actually going on.”

The prevailing “water cooler” theory, according to the chemist, is that Shire is trying to “embarrass [the generic drugmakers] by making them look unreliable”—which could threaten some of their accounts, and hurt their case in future applications to the DEA for a share of the annual amphetamine production quota. The DEA’s decisions to award quota of controlled substances is a somewhat mysterious process, but last year it allowed generic companies to manufacture 26 million kilograms of amphetamines, up from 1.3 million in 1996, when Adderall was first introduced. But even 26 million kilograms wasn’t high enough to accommodate the applications. The chemist says the agency recently granted the generic drugmaker CorePharma, which makes generic Adderall and dexedrine, just half the amphetamine allotment for which it had applied. So it stands to reason that if the agency lowers the quota in response to lower unit sales this year, the great amphetamine famine could be here to stay. And since Shire’s own quota for Vyvanse’s lisdexamphetamine is 9 million kilograms—hugely generous for such a new drug—it is more than prepared to accommodate a surge in new customers.

In the meantime, Shire is hard at work developing a new set of profitable, non-addictive drugs. The New River molecular innovation that makes lisdexamphetamine could soon take the Cindy McCain stigma out of opiates. Another  Shire subsidiary recently discovered a mechanism by which cocaine can be safely administered in lab rats at up to 10 times the typically lethal dose. After a brief doenturn the  company's stock is trading at an all-time high, which might be something to think about, if you have any income left over after filling your Adderall prescription.

Moe Tkacik, formerly of the Wall Street Journal and Jezebel, is a writer and ADD sufferer in Washington, DC.

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Moe Tkacik, formerly of the Wall Street Journal and Jezebel, is a writer and ADD sufferer in Washington, DC. Follow Moe on Twitter.