Senators Ask FTC To Probe KV For Price Gouging
6 CommentsBy Ed Silverman // March 18th, 2011 // 2:39 pm
Two senators want the US Federal Trade Commission to investigate the price that KV Pharmaceuticals is charging for its brand new Makena med for high-risk pregnancies, given that versions of the same drug have been available from compounding pharmacies for many years at a fraction of the cost. The drugmaker, they charge, is price gouging.
The cost of the treatment went from roughly $10 to $20 to $1,500 after KV received FDA approval earlier this year. And KV has also sent letters to compounding pharmacies warning them about continuing to make the treatment or face possible legal action. A trade group representing compounders pooh-poohed the threat, but patients, doctors and insurers are outraged at the price tag (back story).
Investors, however, believe Makena represents a remarkable turnaround for a drugmaker that entered into a consent decree for making and distributing adulterated and unapproved drugs. A KV unit also pleaded guilty to two felony counts of criminal fraud for failing to report to the FDA that oversized tablets were being made. And the former KV chairman was banned from participating in federal health care programs, ordered to pay a $1 million fine, forfeit $900,000 and serve a 30-day jail sentence (see here).
Against this backdrop, two senators - Minnesota Democrat Amy Klobuchar and Ohio Democrat Sherrod Brown - wrote FTC chair Jon Leibowitz that by charging $1,500 for Makena, which is a weekly injection of progesterone, KV may be engaging in anti-competitive behavior. And they maintain that a KV patient assistance program is insufficient because it does not cover “certain groups” of women.
“KV Pharmaceutical is taking advantage of FDA’s approval of Makena and orphan drug determination to achieve rights as the sole source for this limited use of progesterone, leading to a monopolization of treatments to address preterm labors,” they write. “…This price increase will (also) place a heavy burden on state Medicaid programs, which cover a majority of high-risk pregnancies. (We are) extremely concerned that KV Pharmaceutical’s actions will result in diminished access to appropriate health care for women and result in increased preterm births.
In their press release, Klobuchar and Brown used more colorful language: “This is a proven and affordable drug that has been around for over 50 years. It’s critical that we make sure this company isn’t taking advantage of its orphan-drug determination to monopolize the market and engage in price gouging at the expense of pregnant women,” Klobuchar says. “At a time when rising prices for prescription drugs are stretching the budgets of middle-class families, we must be vigilant in stopping practices that would limit access to vital medicines” (see the statement and letter here).
“KV created an overnight monopoly for this lifesaving drug – and then proposed raising the price by 14,900 percent,” Brown says. “Last week, I called on KV Pharmaceuticals to immediately reconsider their decision, but to this date the company continues to defend this astronomical price increase. Price-gouging is never acceptable, particularly not when it undermines public health and fleeces taxpayers. Families deserve an investigation.”
Jerry
Sen. Brown Leads Effort to Demand Federal Investigation Into Price Gouging of Pre-Term Labor Drug .. http://bit.ly/f4qpux
Makena? Even if you have more than one child. The cost is minimal compared to a pre-mature birth. Senator Brown, If you want to talk about price gouging? How about high insurance premiums, I’m not just talking about health insurance either. What about doctors, lawyers, city government “water & sewer”, electricity, food, clothing, gasoline, etc. Some vehicles cost almost as much as a house.
If you can’t afford Makena, you probably can’t afford to have a child anyway. I would say 50% of todays americans can’t even afford a condom, or just don’t care if they get pregnant, because we, the tax payers always seem to end up paying. Maybe we should be promoting using condoms!
Makena is clearly higher in price by being FDA approved, which falls in the laps of KV pharm. KV Pharmaceuticals took the chance and paid accordingly to have this drug FDA approved. If KV was selling Makena for $10-$20, one lawsuit from our greedy attorney’s would put them out of business, and all their investments would go down the drain. Thanks to our great legal system, lawsuits are the cause of just about everything, at the rates they are today. Doctors should be happy that Makena is FDA approved, its takes some liabilities off them and it falls on KV Pharmaceuticals, that’s clearly the reason for the high pricing. KV Pharm should make the drug available for one price for everyone, regardless of the amount of money you make. This way maybe they could cut the price in half. If for some crazy reason Makena doesn’t work for you, you get a full refund.
Wow look at this list: These prices are approximate…..
So what we are saying, its ok for Zyprexa for schizophrenia to be $7000.00 a year, Avastin for cancer $50,000 a year, Soliris at $409,500 a year, Elaprase at $375,000 per year, and Naglazyme at $350,000 per year.
The only way to solve the issue of Makena being “over priced” is to make one price for everyone. Like I said earlier, if you can’t afford to use a drug such as Makena to prevent a pre-mature baby, well then, please don’t get pregnant
mike mar
I lost a child to stillbirth last year and it was incredibly painful. KV has done a 150x price increase on P17 (a drug that has been used for 50 years and the most effective to preventing preterm labor). A 30k price tag is expensive to most people, it’ll reduce the availability of KV and there will be more stillbirths and premature births and more people will face what my wife and I have. There are many problems with the world…but specifically can we agree it would be a good thing if KV reconsidered a 150x price increase for a drug they literally only slapped a label onto? We can drive this action but we need to keep the focus over the next month on KV. I’m a moderate but support any senator that attempts to reign in KV
John Q
Jerry you do understand the injection went from $15 to $1500 per treatment for the same drug? It sounds as if you are blaming issues not related for causing either the price increase or your own hatred of women and life. Maybe it’s all the above.
Anyway a treatment that could ultimately save the life of a preterm baby has risen from $300 to $30,000 not including normal pregnancy cost. If you can afford to burn $30,000 for this price gouging medicine even though the same $3000 medicine has been available for years, good for you. I have to wonder how or why anyone would side up with this so called drug maker unless they were worried about a paycheck!
Doc
“If you can’t afford Makena, you probably can’t afford to have a child anyway.”
Now that is scary thinking.
yo
It’s not just Makena, drug companies do this all the time. Here’s a related example. Babies (not necessarily premies) born with a heart defect known as PDA (a hole between two chambers of the heart) can be given medication that causes the hole to spontaneously close, thus avoiding surgery. The medication is the better way to go. There are two medications that may be used, Indocin IV (indomethacin sodium) or NeoProfen (ibuprofen lysine). The Key is that BOTH medications are now sold by Ovation Pharmaceuticals a subsidary of Lundbeck. The cost for one dose of either medication is about $550.00 (that’s one vial). These babies require a total of three doses( $1600.00 -$1800.00). Here is the kicker. When the drug, Indocin IV, was made and sold by Merck & Co. the per dose cost was about $15.00… fifteen bucks, now 550 bucks! It’s the same nonsense and there are numerous other examples of rip-offs. Makena has caught the eye of docs and therefore regulators because it wasn’t readily available before; it had to be compounded by a pharmacist so people were more focused and aware of the service the pharmacist was providing. Now K-V has a commercial prep w/ a crazy price and it’s hitting everyone right between the eyes! Shame on K-V. P17 is at least 50 years old, but that is what caused the problem. Look up “DESI drugs” for an explanation. DESI is affecting many, many old bur good drugs, e.g., colchicine.
Jeremiah
Jerry,
I don’t know what kind of affiliation you have to KV, I’m guessing an investor, but it’s caused a darkness in your soul (maybe it was there all along, but I’m giving you the benefit of the doubt here). To have such a cold, callous attitude towards women, fetuses, and people w/o means reflects poorly on your ability to be empathetic and compassionate towards your fellow man.
All that aside, you make some arguments that expose your narcissistic and feebleminded true self. And I must say, it’s pretty ugly in there.
Exhibit A: You defiantly defend the $30k cost of Makena, claiming that it’s a relatively “minimal” expense. But then you go on complaining about the high prices of virtually everything else, including insurance premiums. Trying to divert attention from the Makena issue with these examples is completely off topic and a failed argument. And since you don’t seem to understand this, outrageous prescription prices are a huge factor in the outrageous price of insurance premiums. Fail.
Exhibit B: “I would say 50% of todays americans can’t even afford a condom, or just don’t care if they get pregnant.” “If for some crazy reason Makena doesn’t work for you, you get a full refund.” “If you can’t afford to use a drug such as Makena to prevent a pre-mature baby, well then, please don’t get pregnant.” “Some vehicles cost almost as much as a house.”
Not sure where your deluded perspective of reality stems from, but you might want to look into getting some of that Zyprexa drug you mentioned. Those statements make you sound like an idiot and a desperate pharma shill. You just can’t get much lower than a compassionless big pharma shill investor who would let babies die just to make a buck, but no doubt you’re working on it.