The KV Preemie Drug & An Unusual FDA Decision
15 CommentsBy Ed Silverman // March 31st, 2011 // 8:15 am
Yesterday, the FDA took the unusual step of inserting itself into the controversy over the KV Pharmaceutical drug known as Makena, which the agency approved last month for premature births under the Orphan Drug Act. After KV disclosed plans to charge $1,500, compared with $10 to $20 a week for compunded versions of a med that has been used for decades, the drugmaker and the FDA came under fire by politicians, patient groups and some doctors (see this and this). In response, the FDA says it will not prevent compounders from compounding (see this), adding unexpected to competition to KV, which has a 7-year exclusivity period. We spoke with Cole Werble (pictured left) and Ramsey Baghdadi who track pharma for Prevision Policy, a healthcare analysis firm, and who are also editors at The RPM Report, about the FDA decision…
Pharmalot: What was unusual about the FDA action?
Werble: There were several things, starting with the fact that the FDA even told some media slightly in advance (of the announcement). That’s beyond the norm. But it’s always their option to choose what to enforce. They can enforce some things more so than others. Like a speed limit, you can enforce it tightly some days, but more so other days…It’s also unusual in that, in some other cases that are somewhat like this one, the FDA has gone out of its way to support the approved product. That happened with Colcrys, the gout medication.
Pharmalot: You mean situations where one drugmaker received FDA approval and some exclusivity, crowding out others that sold the same med for years at lower prices, yes? Although the competing gout meds in that case were other pills, but the FDA did not make the move they made today.
Werble: Yes. And the point here is that if a legitimate compounding lab gets a prescription from a doctor, the FDA is saying it will not get in the way.
Baghdadi: There’s another point here and that is the FDA is now opening themselves up to two fronts of attack. Now, maybe a politician who doesn’t like a decision (by the FDA) will think that all it takes is sending a letter (and publicizing the letter) and maybe the FDA is forced to make a different regulatory decision. This suggests the FDA is going to be politicized and we already went through that era.
Pharmalot: Okay, you’re referring to the two (US) senators who sent letters complaining about the price, of course. What’s the second front?
Baghdadi: The second front is dabbling in the issue of pricing. FDA has always had the ability to speed things to market, but that’s different than taking this kind of regulatory action. I don’t know why they felt a need to get into that arena. Because now you have to ask where do you draw the line? Can you do it for Yervoy? That’s the new Bristol-Myers melanoma drug that was approved last week and will cost $120,000 (see this). Or what about Provenge (the prostate cancer vaccine), which costs $93,000 (read here). As a result of this decision, they’ve opened themselves up to the whole pricing debate. You know, it looks like they responded directly to a pricing comlaint and that’s not in their purview. They’ve kind of boxed themselves in…It may be a unique case, but FDA responded so quickly and acutely and so publicly that this can have policy implications down the road.
Werble: They don’t want to be embroiled in every discussion of a product. Remember, there are other companies looking at old chemicals and doing studies FDA needs for approval. And they hope to get Orphan excluisivity I think now FDA will have to be more careful looking at those situations in the future, at least in the short term. That’s good and bad.. Maybe when those products come out, they will be higher priced, but (the FDA) also got people to do studies. But if there’s a concern that FDA is somehow creating an orphan exclusivity position and a company may get hit, maybe there will be less interest. The FDA commissioner doesn’t want to called up to the Hill and asked how it happened again. That policy of awarding orphan exclusivity has some value.
Pharmalot: Does KV have any recourse here?
Werble: They have to show they are a responsible marketer. I understand about 40 percent of pregnancies in the US are covered by Medicaid. They can go below specified rebates and show they were aware of the burdens on the state programs. Maybe then some of the pressure would go away and then maybe FDA might rethink its position.
Pharmalot: Okay, maybe. But even if KV slashed its price tremendously and you added rebates, Makena would still cost more than a compounded version. What’s the incentive?
Werble: They’re still FDA-approved and, therefore, if you’re a prescriber or a hospital, you’re more at risk if you give something that’s not the approved product. There are forces weighing on the use the approved product. Private payers may be more flexible about paying a higher price. But once there’s an approved and you use anything else, you’re taking a liability risk, and that’s big. One or two misadventures can wipe out the difference in savings. It may be a low risk, but it’s a risk. But it will be debated within all these organizations.
harpy
while I think KV is scum for their price gouging, FDA is reneging on its deal and that is a stupid, bad precedent.
g
KV certainly had dollar signs in their eyes and overreached in their pricing. $1500 for the compounded drugs available at $20-we wouldn’t be hearing so much about it if they charged $150. However, the regulatory uncertainty coming from the FDA is a huge disincentive to companies thinking of investing in new products or trials to improve upon current therapies. Granting market exclusivity and then not enforcing it because of “unique circumstances” makes the FDA look bad and will scare off investors.
Christopher
agree with harpy’s FDA comment - am ambivalent about KV - and feel this is a poor decision. Can’t circumvent decisions and policies just because they create unpopular outcomes.
dude
Who are these two buffoons? I don’t think they could read the poop stains in their underwear, let alone tea leaves at FDA.
Bottomline: Bad precedent for innovators who have to now decide whether it’s worth investing in a therapy’s development if the agency can just pull the rug from under their feet. I smell a lawsuit.
Confused
I wish you’d have tackled the issue of whether the FDA had jurisdiction to actually DO anything about compounding pharmacies in the first place. As a practicing pharmacist, I answer to my state board of pharmacy, not the FDA. As long as my practice is well within the definition of pharmacy practice in my state, the FDA has no direct regulatory authority over my pharmacy. If, however, I was manufacturing without a license, then that would be an issue that transcends Makena.
ed silverman
Hi Confused,
Thanks for the note and you asked a good question. As the FDA statement issued yesterday indicated, the agency can step in when pharmacies that compound products that are causing harm or are somehow engaged in health fraud.
However, I have asked the FDA for further clarification and, hopefully, will report back shortly.
Regards
ed
dude
Simple answer for confused… FDA does not regulate the practice of pharmacy. But it does stick its nose in when so-called pharmacies compound amounts well in advance of receiving a prescription and then crosses the line and becomes a manufacturer.
Doc
” One or two misadventures can wipe out the difference in savings. It may be a low risk, but it’s a risk.”
This is bs logic and fear mongering. Why not just face the facts, KV took advantage of the orphan drug situation to rip off payors, which for many of these patients is us the taxpayer.
Everyone is out for themselves, which I guess you could say is fine, but at some point - you can’t provide every drug for every person at any cost.
Even BMS’ & Dendreon’s onc drugs should require patients to put some of their own money on the table to help cover costs.
ed silverman
Hi Confused,
I have heard from the FDA and so can offer you a more specific response…
The Food Drug and Cosmetic Act imposes requirements on drugs to ensure that they are not adulterated, (21 U.S.C. §351), and requires the labeling to provide consumers, physicians, and pharmacists with necessary information about drug contents, uses, and effects; drugs that are not properly labeled are “misbranded.” Id. §352. The adulteration and misbranding provisions of the FDC Act do not contain exemptions for compounded drugs.
Hope this helps,
ed
Insider
So what will Medicad pay for the product? How do they know which one is being used? THey just opened the door for a tremendous opportunity for fraud. Have the pharmacy make it and bill for the $1500.00. Someone other than the manufacturer does very well.
Pelfrey
KV smelled a quick buck, even with a clinical trial. Taking an agent that is generally compounded into orphan drug exclusivity was the FDA’s biggest mistake. I think the FDA announcement that they would NOT go after properly prescribed compounding pharmacists was just a way to try to sidestep the whole thing. They don’t have the authority to go after them, so KV can’t hold the FDA at fault and the consumers don’t have to pay big bucks if an insurer won’t pay for the branded agent. It likely won’t work to avoid problems for everyone and certainly doesn’t make the FDA look any brighter for approving Makena in the first place.
Skeptical
See my comment on the previous story. The intricacies of the FDA regulations clearly slipped past KV.
The FDA was correct in approving the drug and assigning it orphan exclusivity. The FDA is also correct in not going after the compounding pharmacies. It is KV’s problem for making a huge mistake in the regulations and failing Lifecyle Management 101. Makena is a new salt of previously approved drug. That does not preclude older versions to be used in what ever manner the compounding pharmacies use it or in whatever manner physicians perscribe it. The orphan drug laws cover SAME DRUG, SAME INDICATION.
Consider if you had a currently approved drug in immediate release form, then developed a controlled release for a completely new, orphan indication. But the IR form is being used off label for this orphan indication. If the CR form is approved, it does NOT preclude physicans prescribing the old drug off label if it cheaper. SAME STORY HERE.
Insider
How do you set-up reimbursement?
Elmore
The costs associated with premature births are astronomical. KV was all set to make an unholy profit that had nothing to do with innovation and everything to do with some bright spark saying, “Suppose we put a patent on this?”
Suppose someone put a patent on clean water? Or a patent on vitamin C?
The fact that someone with the conscience of a toilet bowl thought up that scheme does not mean someone else with an idea–”let’s let them continue to compound it” should not also have a say.
Way to go for the FDA.
AnnePME
Insider, there is a system in place to ‘tell’ Medicaid which product the pharmacy is billing, but in some cases it might be difficult to confirm which drug is being billed.