KV Pharma Lowers Price Of Preemie Drug
18 CommentsBy Ed Silverman // April 1st, 2011 // 8:40 am
Under enormous political pressure and undercut by an unexpected FDA decision earlier this week, KV Pharmaceuticals has lowered the price of its Makena injectable drug for premature births by nearly 55 percent, to $690 per injection. Previously, KV hoped to charge $1,500. Despite the decrease, this is still considerably more than the $10 to $20 that compounding pharmacies typically charge.
Nonetheless, KV maintains the price drop, supplemental rebates and the standard 23.1 percent Medicaid rebate “will result in a substantially reduced cost per injection for state Medicaid agencies compared to list price. This will help ensure that every woman who is prescribed Makena – regardless of her ability to pay – has the comfort of knowing a medication that has been rigorously reviewed by FDA for safety and efficacy is available to her,” the drugmaker says in a statement sent to us.
For those unaware, the FDA last month approved Makena, which is a form of progesterone that, for many years, was offered by compounding pharmacies. But KV was granted marketing exclusivity because approval was made under the Orphan Drug Act and the drugmaker threatened to take compounding pharmacies to court. The price hike prompted two US senators to ask the Federal Trade Commission to investigate and outrage from patient and doctor groups (back stories here, here, here, here and here).
KV also says costs will be capped for a full course of therapy to a maximum of three vials (15 injections) for contracted health insurance plans and state Medicaid agencies, and a patient assistance program has been expanded by removing income caps to qualify for financial assistance. Now, KV says 85 percent of patients will pay $20 or less per injection and patients whose financial need is greatest would receive FDA-approved Makena at no out-of-pocket cost.
“Ensuring access to an FDA-approved sterile, injectable medication, manufactured under mandatory strict quality controls, is in the best interests of all high-risk women,” KV ceo Greg Divis says in the statement. “We understand the concerns that key stakeholders raised under our original pricing structure. We also recognize the current budget challenges facing state Medicaid programs and other payers. In conjunction with our substantial reduction in price, it is our sincere hope that all committed stakeholders will take appropriate action to provide timely access to this important FDA-approved medication.”
We await reaction from various interested parties. UPDATE: at 4 pm EST, the American College of Obstetricians and Gynecologists sent us this statement: “Although this may seem like a relatively significant price reduction, unfortunately it remains a woefully inadequate response. This ‘lower’ price still remains prohibitively high for a safe and effective treatment that is currently available at a much lower price in the form of compounded” progesterone… There is no evidence that Makena is more effective or safer than the currently used compounded version. In fact, the evidence used to obtain FDA approval…relied primarily on data obtained using the compounded product…The US health care system simply cannot be expected to absorb the cost of Makena at its current prohibitive price without significant negative repercussions.”
And Senator Sherrod Brown, an Ohio Democrat who wrote the FTC, says this in a statement: “KV’s announcement is small step in the right direction, but I remain extremely concerned about the enormous strain this drug will place on Medicaid budgets and patients with private health insurance.
Meanwhile, what do you think?
Is This Price Cut Sufficient?
- No (81%, 144 Votes)
- Yes (20%, 35 Votes)
Total Voters: 178
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LArry J Frieders
KV won big on this issue. Anything over $20 per dose is probably gravy. The key issue is that only a small number of OB doctors prescribed this from compounding pharmacies. Now that it’s “FDA approved” the rest will jump on board and start writing. All third party companies WILL pay, regardless of the cost. This has been a skillfully played marketing promotion. While their actions may seem evil to some people, their execution is pure genius. Well played, KV Pharmaceuticals.
pharma gal
I assume they make $$ at anything around $20 if the compounders make money at that level. But that begs the question: why did they cause this $1500 PR debacle?
Does it fall under bad publicity is better tha no publicity? In addition they also assured that the compounding pharmacies can now be a viable generic competitor which they were not here to for. The FDA now gave them its stamp of approval. Does not look like such a genius move other than the noise of publicity.
AnnePME
I don;t see how KV won on this issue…Also, will other policyholders pick up the Medicaid price breaks?
Kendra
Most medcaid pograms wil not pay for this name rand drug when there is a much cheaper compound or generic form avilble. Heck medicaid did’t want to pay for my Adviar because the 2 seperate drugs in Advair are cheaper than the combined product. only after my Dr showed I had tried them seperately and it was not a effective would they cover it.
vince
Do I hear $320 a shot and the FDA agrees to enforce? The drug industry. At that price will it be a bargin?
Sam R.Ph.
Pharmacists, apothecaries, etc have been compounding medications for
centuries. The FDA has no right to ban pharmacists from compounding at
all. KV is a good example how corrupt and greedy the pharmaceutical
companies are. It also demonstrates that most pharmaceutical companies are at their wits end to discover revolutionary new drugs.
LLM54
If the compounders make money at $20 per shot, that is only because they didn’t have to pay a few hundred million dollars for the clinical development of the drug.
Sam R.Ph.
To LLM54, does the paragraph below sound like KV spent a few hundred of million of dollars for the clinical development of progesterone
“For those unaware, the FDA last month approved Makena, which is a form of progesterone that, for many years, was offered by compounding pharmacies. But KV was granted marketing exclusivity because approval was made under the Orphan Drug Act and the drugmaker threatened to take compounding pharmacies to court. The price hike prompted two US senators to ask the Federal Trade Commission to investigate and outrage from patient and doctor groups (back stories)”
I should remind you that pharmacists make sterile preparations for chemo, antibiotics and total parental nutrient products all the time.
Dr. Jim
These situations are occurring w/ alarming frequency. A drug company will search old treatments, obtain the exclusive patent, and grossly overcharge for the product. Qualaquin, Colcrys, and now Makena are examples. A ridiculous ‘patient-cost’ has occurred in our patients that used to get quinine (now Qualaquin) and colchicine (now Colcrys). Many of them suffer daily and it’s inexcusible that these ‘ethical’ drug companies do this activity.
Just Saying
The company expected the gov’t and the public to force the issue, so to get half of what they wanted was alreadied planned. Who do they think they are fooling? The Gov’t should force them to sell at the old price.
in-house
@ Dr. Jim - my brief search did not find any new patent owned by KV for the drug. It appears you may be confusing some facts. KV was granted a regulatory Orphan Drug exclusivity of 7 years. This has nothing to do with patents.
@ Sam R.Ph. 1) the FDA does have statutory authority to enforce its regulations against compounding pharmacists; and 2) although the quote from the article does not make it clear, the regulatory approval letter available on the FDA website does make it clear that KV has been working on funding studies for this coupoun for the past 5 years.
In order to sell the drug, KV must have completed safety and efficacy studies. How many pharmacists have conducted those studies before compounding anything?
Sam R.Ph.
@ in-house - pharmacists use only drugs approved by the FDA whose responsibilities to medical professionals and the public is to make sure
the drug is therapeutically effective and safe if used appropriately.
Your question about pharmacists conducting “studies” before compounding or for that matter dispensing any drug is completely rediculous.
Also, the FDA ruling about pharmacist compounding is restricted to batch compounding and not for compounding for a particular prescription for an individual patient.
As for KV funding studies for this compound for the past 5 year, it does not give them the right to charge $1,500! I am sure that the makers of aspirin have been doing studies for the last 50 years to show that this drug is beneficial for 20 other medical uses, but I have not seen a bottle of aspirin increase to such a degree.
vince
Safety studies on… the compounded product as noted in the piece’”…..There is no evidence that Makena is more effective or safer than the currently used compounded version. In fact, the evidence used to obtain FDA approval…relied primarily on data obtained using the compounded product…
in-house
Sam R.Ph. I am sorry, but KV has every “right” to charge whatever amount they please. If they decide to sell for $1 or 1M$ it is their “right.”
A
s I am sure you are aware, there is no FDA requirement that a pharma company must sell its approved drugs at certain prices. Now if KV were to market in the EU under NICE or in CA under the CA Ministry of Health, this would be a different conversation.
Aside question - would you advocate that the new Health Care law require the FDA to begin considering cost-effectiveness, i.e., price when approving drugs?
Sam R.Ph.
@ in-house
Yes, but in a different way. The FDA should require a pharmaceutical
company to compare their new drug effectiveness to existing brand or generic drugs for a particular medical condition - NOT A PLACEBO! If the new drug does not demonstrate significant therapeutic effective results and is not as safe to use, it should not get FDA approval.
Also, once the drug’s patent rights have been exhausted, the patent cannot be extended because the company came out with a extended release form or other forms of a dose(except as an injectable).
Your right the drug company has every right to charge what they want, but there is a phrase that is used in other areas - “price gauging!”
Besides, I thought pharmaceutical companies were concerned with the
well-being of patients. As I said before in another email, patients are
abandoning their prescription when even the co-pay is too expensive.
According one article in either NY Times or WSJ - from 2002 to now, the abandonment of Rxs by patients has increased by 80%
Please
If it is so easy to get FDA approval and there is a wide profit margin I am sure the FDA would grant approval to another company for another progesterone product if that company does the studies or claims the data conducted by others supposedly like KV. This would encourage fair market value but my guess is it not that easy. In addition by taking on sole responsebility of injectable progesterone KV opens itself to lawsuits. People sue at the drop of a hat anymore. A patient would be more likely to sue a billion dollar pharma company than they would Billy Bob’s compounding pharmacy. There is more to it than just evil pharma. Everyone remembers the old lady and the cup of coffee at Mcdonalds. It is as much about risk and reward as it is about evil pharma.
Skiver
Are there other anecdotes like this case, where we have a clear causal line between a change in intellectual property status and a change in the price? Perhaps smaller situations, like an unexpected extra year of patent protection thanks to a favorable action on Hatch-Waxman extensions leads to a change in price; either upwards to “make hay” in that last year or downwards, even if unlikely?
ekskurzii
I don;t see how KV won on this issue…Also, will other policyholders pick up the Medicaid price breaks?