Now the gears at Questcor began to turn more quickly. It won orphan designation for Acthar Gel in 2003, and proceeded to the next step: getting F.D.A. approval to market the drug explicitly for infantile spasms, which under the orphan act would also include a seven-year monopoly for Questcor. The company prepared for a marketing blitz and doubled its sales force early last year. But when the F.D.A. rejected Questcor's application in May 2007, the company quickly slashed its staff and jacked up the price.

Cartt says the price was set "within the range of other orphan drugs," noting that many others go from $50,000 to $500,000 a year or higher. For instance, BioMarin, an orphan-drug specialty company, charges $70,000 a year for Kuvan, a drug to treat phenylketonuria, a genetic enzyme disorder that can cause mental retardation and brain seizures. But unlike BioMarin, which spends 64 percent of sales on research and development, Questcor spends very little; in 2007, Questcor's research and development accounted for 9.5% of sales revenue.

What other considerations played into the price Cartt would not say. Sales for 2007, when the price hike took effect, were $49.7 million, and net income was $37.5 million—a net profit margin of 75 percent. It was significant not only for its size, but also because it was the first profit since the company was formed, as Cypros Pharmaceuticals, in 1990.

Investors were pleased, driving up Questcor's share price from 40 cents to over $6 after the August 2007 price hike. But executives at the company started selling their shares in December, seven months after the former C.E.O., James Fares, stepped down and around the time Questcor executive Don Bailey took his place. Since December, Cartt himself has sold shares based on grants and options totaling $1.68 million; many of those options were granted at 46 cents a share. He holds nearly a million more options on Questcor stock.


Doctors were unhappy with the price hikes.

"Most of us in the child-neurology community were outraged at the extent of the price hike, unusual even for orphan drugs," says Eric Kossoff, a pediatric neurologist and infantile spasms expert at Johns Hopkins Children's Center. "Most of us had no choice, unfortunately. At the time it was felt to be the best drug out there, and they're the only company that makes it. This is an incredibly serious form of epilepsy with devastating implications if not treated."

Curiously, though, he found that the price hike "was one of the best things that could have happened." Why? "Because we found something better and cheaper." Far cheaper, it turns out. "We spent a few days going through all the medical literature, looking for what works, what doesn't."

The team turned up a study from the United Kingdom that gave infants high doses of prednisolone, a well-known, generic steroid. Prednisolone had been dismissed as relatively ineffective for infantile spasms-based research that used low doses. The high doses made all the difference: The U.K. study found efficacy rates reached 70 percent and more. Johns Hopkins began using high-dose prednisolone and found it worked in about 70 percent of cases, on par with the hospital's experience with Acthar Gel. And the price was $15 per injection—essentially free—compared with the three-injection $69,000 treatment from Questcor. "It was like in times of war, you get focused, and amazing things come out," Kossoff says. "We don't use [Acthar Gel] at Hopkins anymore for infantile spasms because the oral steroids [high-dose prednisolone] work just as well."