Your money or your baby's life

[1CAVCCO15MED]

KV Pharmaceutical Co. on Monday will start selling a newly FDA-approved pre-natal drug - at $1,500 per injection, more than 100 times its current cost.
The Bridgeton-based drug company did not invent the drug it now calls Makena, but recently obtained exclusive marketing rights as part of its long-awaited approval by the Food and Drug Administration. The same drug has been sold for years through wholesale pharmacies under the label 17P. And a growing number of doctors had prescribed 17P to prevent pre-term births long before Makena's approval.
Until now, 17P has often cost less than $15 per injection and at times has sold for as low as $5.
KV's ambitious pricing plan illustrates the risk-reward bets made by drug companies in the protracted and expensive FDA approval process, and their connection to soaring U.S. health care costs. Although 17P has been promoted as a cost saver, KV's pricing for Makena could actually increase the costs associated with pre-term births and reduce women's access to the drug. A full treatment of between 15 and 20 shots would typically run $25,000.
"Wow. That's a lot," said Arleasha Hays, a spokeswoman for the Missouri Department of Social Services, which oversees the state Medicaid program and would have to approve Makena's purchase. "That is very surprising."
Health considerations aside, treating 1,000 women at that price would cost at least $25 million and only prevent an estimated one-third of pre-term births, according to a 2003 clinical trial. The average cost of an early birth, meanwhile, runs about $51,000 (about ten times more than a normal birth), according to KV officials - bringing the total medical costs to nearly $61 million.
That's about $10 million more than if the same group of 1,000 women never took the drug and all had pre-term births.
The company has said that the quality and dosage of its branded drug will be more consistent than the array of alternatives offered in the past. Late Wednesday, KV chief financial officer Tom McHugh, said the drug's cost is justified given the mental and physical problems that come with premature births. Morever, he said, many doctors are reluctant to prescribe drugs without FDA approval.
"There are probably many moms who go untreated right now for the lack of an FDA-approved drug," he said.
Whether the market will bear the company's price remains in question. Under federal law, the secretary of Health and Human Services negotiates rebates for FDA-approved drugs used by Medicaid patients. But each state also sets its own reimbursement rate for these medications. Missouri currently reimburses the use of 17P at $14.69 per shot; Illinois pays $20 per shot. The federal Centers for Medicare and Medicaid Services declined comment on KV's pricing through a spokesperson.
Monopoly money
The stratospheric price hike would be made possible through the elimination of competitors. The Feb. 4 approval gives KV exclusive rights to market the drug for seven years. Normally, the agency only bestows such monopoly priveleges for new and innovative drugs, as a reward for often expensive research. But Makena's approval came under the agency's "orphan status," which gives companies an incentive to develop drugs for specialized use in relatively small market segments. KV has estimated the potential market for Makena at less than 150,000. Under federal law, these drugs also receive expedited review and tax benefits - lowering the risk for investors.
The FDA approved Makena Feb. 4 on the condition that KV conduct post-marketing studies to prove that the drug offers a clinical benefit that outweighs potential safety risks. Currently, no clinical trials show that 17P provides a direct benefit in reducing infant mortality and disease.
"If this drug actually works, maybe it's worth it at this price," said Efthimios Parasidis, assistant professor and FDA expert at St. Louis University Law School. "The problem is, the FDA doesn't do a good job of monitoring the post-marketing studies it orders. We don't know the long-term effects on the babies that are born, or whether the women are going to be able to have babies again or avoid pre-term births in the future."
The news that KV will start selling Makena on Monday made it's stock price jump 31 percent, to $13.07. The company hopes that Makena brings it back to profitability after a spate of troubles, including the criminal conviction of a subsidiary for shipping over-size painkillers, a two-year manufacturing shut-down and mass layoffs.
"I would like to see how much (KV) put into this drug and how much they're going to get out of it - their profit margin," Parasidis said.
Revolutionary product?
According to the March of Dimes, one of eight babies is born pre-term and they have a higher rate of infant mortality.
In recent years, several health insurance companies and Medicaid have paid for lower-cost 17P injections in part to reduce the medical expenses from premature deliveries. Medicaid pays for about 40 percent of U.S. births.
But private payers and Medicaid may balk at KV's pricing, which could make it difficult for doctors and patients to get reimbursed by insurers and the government.
Still, some cast Makena as KV's savior. "It's a revolutionary product. It's definitely a winner. The whole question is how much and how fast they can market it," said Jim Gorman, an analyst at Stifel Nicolaus, the St. Louis-based brokerage. "This will be reimbursed because it's cheaper than the alternative, which is medical care for a pre-term birth."
Kevin Kedra, an analyst at Gabelli & Co., an investment firm in Rye, N.Y., called KV's price "aggressive," but stressed: "When you're the only approved product in the market, managed care seems to give you the benefit of the doubt."
But KV faces potential competition from Watson Pharmaceuticals Inc., which hopes soon to obtain FDA-approval for a vaginal gel to prevent pre-term birth. As a result, KV may be forced to offer deep discounts.
KV chief executive Greg Divis told investment analysts on Feb. 14 that he's proud that his company is joining the nation's fight against pre-term birth by "ensuring access for all eligible patients to this crucially important medication." Divis indicated that KV will offer a "patient assistance program" to offer lower copays to some insured patients.
But the program won't lower Makena's cost to health insurers and other major payers, and some argue the approval will in fact restrict patient access. In 2007, Sidelines, a nonprofit organization supporting women experiencing high-risk pregnancies and premature births, asked the FDA to revoke orphan status for a branded version of the drug because it "will have the completely unintended effects of reducing competition, reducing access, increasing price, and stifling research."
The Institute of Medicine has estimated that pre-term births costs the nation at least $26 billion a year.
Will providers ante up?
KV has acted mostly as a behind-the-scenes player in Makena's FDA approval. The agency actually granted the approval to Massachusetts-based Hologic, Inc., which presented the application and argued for the drug based on research by others. KV helped finance the approval process and is paying Hologic nearly $200 million for exclusive legal rights to sell Makena.
The approval rested largely on a 2003 study financed by the National Institutes of Health, which showed that 17P helped deter pre-term births, and also the fact that doctors had prescribed the drug "off-label" - meaning for a different use than approved by the FDA - to expectant mothers for years. Until recently, 17P had only been approved for treating of disorders of the adrenal glands or the ovaries.
Several health insurance and managed care companies, including Clayton-based Centene Corp., have endorsed 17P in recent years as a way to cut medical costs and to prevent premature births and neonatal admissions. Centene, which has contracts in about 10 states to manage state Medicaid programs for poor people, has said it saved the states about $3 million by approving 17P for about 1,000 women last year - at its relatively cheap current prices. Centene's chief medical officer, Mary Mason, declined comment on KV's pricing.
Mays, of the state's Department of Social Services, found it difficult to believe that her agency would pay KV's list price: "I assume that we would be at liberty to negotiate a better rate."

[reconeil]

Re: "Pre-natal drug - at $1,500. per injection, more than 100 times its current cost"?

Given that America has most regulatory bureaucracies for supposedly safe-guarding or protecting its people from corporate thievery on earth,...how can such an obvious continual & ever-increasing PROFITEERING & PRICE GOUGING be permitted???

Shouldn't U.S. Government be lobbying for We U.S. Citizens/Suckers, just as well?

While at it,...how come it was made against the law for Americans to purchase any drugs manufactured in my State of New Jersey for about ONE QUARTER THE PRICE in Canada, Mexico or anywhere else? Should ONLY foreigners pay reasonably for American RX Drugs? Should ONLY foreigners be accorded fair pricing for Survival Needed Meds?

Apparently, American Officialdom & Supposed Protectors of: "We The People" are ONLY concerned about foreign nationals being ripped-off? Sure-as-hell seems so to me.

Besides, if PROFITEERING & PRICE GOUGING have been pretty-much illegal here & punishable by US Law,...how come both are typically permitted in American Pharmaceutical Industry, with not even a slap-on-wrist? Are lobbyists that good?

Also, could there be some GREAT jobs promissed or positions on boards involved?? Orrr,...could just-flat-out-pay-offs be some of the reasons? Hell, who knows?

Maybe some just as Wealthy Drug Execs are even related to: "Oil Fat Cats"?

Wonder which PROFITEERS are teaching which PRICE GOUGERS best? BOTH seem doing exceptionally well AT GREAT PUBLIC EXPENSE...daily sanctioned by BIG BROTHER.

Neil

[1CAVCCO15MED]

Because Congress passed a law making it illegal for the US government to bargain for drugs.

[reconeil]

Got your answer and understand it very well.
Still,...what was the question?

Besides, what does quite obviously perpetual Drug Company: "PROFITEERING & PRICE GOUGING" of We American People have to do with: "Congress passed a law making it illegal for US government to bargain for drugs", anyway?

"US government" need never bargain for ANYTHING since Governments (local, state & federal) never directly or actually ever pay for ANYTHING. Double Taxing U.S. Taxpayer or taxing tax monies paid does that.

Monies paying for EVERYTHING (for Rx drugs inclusive) solely originate & come from: "We The (Sucker$)" or U.S. Taxpayers of Private Sector. Private Sector even pays every cent of Millionaires President Obama, Biden & Pelosi's big salaries & high taxes. We always just pay, pay & pay while never receiving any guarantees or zilch.

In fact, ALL better salaries & higher taxes paid, greater benies, medical & retirements of entire Public Sector (even lesser on Welfare dole too),...are ALSO Initially & Totally paid for by we typically Less Paid of The Private Sector. None other.

There basically are no hard or bad times for The Public Sector,...UNTIL Private Sector has just had enough & starts rightfully demanding Much Better Results for All Taxes Taken by those much better off.

See many Wisconsin, Ohio & such public union orchestrated debacles. Get the picture?

Neil

[BLUEHAWK]

"Because Congress passed a law making it illegal for the US government to bargain for drugs."

bastids...