Embattled Drug Maker Halves Price of Makena

April 01, 2011

April 1, 2011 — Under intense pressure from organized medicine, politicians, and the March of Dimes Foundation, KV Pharmaceutical announced today that it will lower the list price of its new drug for reducing the risk for preterm birth from $1500 to $690 per injection and introduce other price breaks to make it more affordable.

However, critics of KV Pharmacuetical say it has not gone far enough to put the drug — hydroxyprogesterone caproate injection (Makena) — within reach of patients who used to pay $10 to $20 for a generic version.

"I think it looks like greed to me," said George Saade, MD, president of the Society for Maternal-Fetal Medicine (SMFM), about the company’s approach to pricing.

The publicly traded drug maker, which posted losses of $314 million in 2009 and $284 million in 2010, stated in a recent filing with the Securities and Exchange Commission that the company’s future viability is "almost entirely dependent" on sales of Makena.

The FDA granted market approval to Makena on February 3 for women with a singleton pregnancy before 37 weeks' gestation who have had at least 1 spontaneous preterm birth. KV Pharmaceutical also received exclusive rights to market Makena through its subsidiary Ther-Rx for 7 years under the Orphan Drug Act, designed to spur development of medications without large markets. The company then set the list price at $1500 per injection, or $22,500 for a 15-week course, sparking outcries of price-gouging, especially in light of strapped state Medicaid budgets. Sen. Sherrod Brown (D-OH) and Sen. Amy Klobuchar (D-MN) called on the Federal Trade Commission to determine whether KV Pharmaceutical was violating antitrust laws.

Some of the pressure felt by the embattled drug company to lower the price of Makena came indirectly from the US Food and Drug Administration (FDA). On March 30, the agency announced that it would continue to allow pharmacies to compound a generic version of the drug that sells for $10 to $20 per injection. Pharmacies historically have compounded drugs when an FDA-approved version was not available or was deemed inappropriate by a clinician for his or her patient. Although almost all compounded drugs are technically unapproved and therefore illegal, the agency can choose not to enforce the law if the drug is safe and meets a public health need.

Last month KV Pharmaceutical sent a letter to pharmacies that compound generic Makena stating that because its product had received FDA approval, pharmacies risked an FDA crackdown if they continued to produce the drug.

In yesterday’s announcement, the FDA called the warning erroneous and said that "in order to support access to this important drug, at this time and under this unique situation, it does not intend to take enforcement action against pharmacies that compound hydroxyprogesterone caproate."

March of Dimes Severs Ties to Drug Maker

In a press release issued today, KV Pharmaceutical Chief Executive Officer Greg Divis said that his company understands the concerns raised about Makena’s original pricing structure, and "the current budget challenges facing state Medicaid programs and other payers."

Besides reducing the list price of Makena to $690 per injection, KV Pharmaceutical is taking other steps to be competitive with compounding pharmacies. It will offer supplemental rebates to state Medicaid programs on top of the usual 23.1% rebate they receive, cap the costs for a full 15-injection course of therapy for Medicaid programs and private insurers, and expand a patient assistance program that will lower the cost of Makena to $20 or less for most participants.

However, these steps have done little to placate critics. The March of Dimes stated in a press release that although today’s price cut is a step in the right direction, it is nevertheless severing all professional ties to the drug maker. It is asking KV Pharmaceutical to stop displaying the March of Dimes name and logo on marketing materials that identify the company and its Ther-Rx subsidiary as a donor.

The American Congress of Obstetricians and Gynecologists (ACOG) called the price reduction "a woefully inadequate response" and said $690 is still "prohibitively high." SMFM issued a similar statement. Earlier this year ACOG, SMFM, and the American Academy of Pediatrics petitioned the drug maker to make Makena more affordable.

"We would like to have a price that’s comparable to what is charged for the compounded version," said Dr. Saade, SMFM’s president, in an interview with Medscape Medical News. "It could be a little higher to reflect the value of FDA approval and oversight." A reasonable price, he said, would be $50.

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