How the FDA Turned a $10 Treatment into a $30,000-Per-Pregnancy Pharmaceutical Money-Maker
March 23, 2011
When a new FDA drug-and-money scandal has doctors, US senators, and even the March of Dimes in an uproar, you know it’s bad. [1]
A drug which the FDA approved more than half a century ago—which doctors have been prescribing for their patients with high-risk pregnancies through compounding pharmacies with great success—was designated by the FDA an “orphan drug.” Now KV Pharmaceutical has been given the exclusive right of production and sale (not to mention drug trial tax breaks!). They immediately raised the price from $10 per dose to $1,500—simply because they could.
The drug is a synthetic form of progesterone given as a weekly injection. It has been made cheaply for years and produced in compounding pharmacies. The price hike means that the total cost during a pregnancy could be as much as $30,000 [2].
Doctors say the $30,000 price tag will almost certainly deter low-income women from getting the drug, leading to more premature births. Dr. Roger Snow, deputy medical director for Massachusetts’ Medicaid program, was quoted as saying [3], “That’s a huge increase for something that can’t be costing them that much to make. For crying out loud, this is about making money!” And Dr. Arnold Cohen, an obstetrician at Albert Einstein Medical Center in Philadelphia, observed, “I’ve never seen anything as outrageous as this.”
Besides the grave jeopardy placed on the mothers and their infants, this will create a huge financial burden for the health insurance companies, private citizens, and government programs that have to pay for it. In the long run, because of birth complications, the babies will need to be hospitalized for perhaps months—and, for low-income mothers, all at the expense of taxpayers. On top of that, lung issues at birth can have lifelong repercussions on the individual’s health with an increased propensity toward asthma, bronchitis, and pneumonia, among other early birth issues.
The March of Dimes—a nonprofit organization dedicated to preventing birth defects—received funding from KV Pharmaceutical and supported the company’s New Drug Application. Now the organization has started backtracking in the face of all the public outrage. They just sent a letter to KV [4] “expressing our serious concern about the price of Makena.”
Sen. Sherrod Brown (D-OH) has sent a letter [5] to KV Pharmaceutical asking the company to “immediately reconsider” its pricing. “I am deeply concerned that your company appears to be taking advantage of FDA approval at the expense of women, children and federal and state budgets,” Brown wrote. “By ratcheting up prices, fewer women will be able to afford the drug, increasing rates of preterm birth nationwide. This isn’t in the interest of children, new mothers, or taxpayers.” Sen. Brown, along with Sen. Klobuchar, followed this with a letter to the FTC commission [6] to investigate potential anticompetitive conduct by KV Pharmaceutical from the increase in price.
Not surprisingly, the backlash over the unconscionable price hike has been significant—so much that KV hired the public relations firm Golin Harris to handle the mess.
Compounding Pharmacies to the Rescue
The FDA originally approved 17-hydroxyprogesterone caproate (17OHPC, or 17P for short) under the trade name Delalutin in 1956 to halt impending miscarriages. It was deemed safe but the manufacturer took it off the market in 2000 because it was eventually shown to be ineffective in stopping miscarriages.
When the drug was no longer available, compounding pharmacies [7] were able to compound 17P’s ingredients and sell the product to patients whose physicians had prescribed it. Pharmacists can legally compound FDA-approved products when a drug is not commercially available (as was the case when the manufacturer pulled it from the market), or when a prescriber determines that the compounded preparation is more clinically appropriate for an individual patient (as when someone is allergic to one particular element in the preparation but another can easily be substituted).
After large controlled trials in the mid-2000s showed that 17P could prevent premature births, the compound was given “orphan drug” status by the FDA. An orphan drug is a pharmaceutical agent that has been developed specifically to treat a relatively rare medical condition, and the designation gives the manufacturer clinical trial tax incentives. It also gives the manufacturer the exclusive right for seven years to manufacture and sell the drug. Of course in this case, premature birth is not a rare condition at all.
As soon as FDA gave the drug (now trademarked as Makena) orphan drug status, its manufacturer, KV Pharmaceutical, sent a cease-and-desist letter [8] to compounding pharmacists, stating that “FDA…views compounded drugs to be ‘new drugs’ within the meaning of 21 U.S.C 312(p) and as such they may not be introduced into interstate commerce without FDA approval.”
The Orphan Drug Act is meant to encourage pharmaceutical companies to develop drugs for diseases that have a small market, and it has resulted in medical breakthroughs that may not have otherwise been achieved due to the economics of drug research and development. But this is a drug which was already developed, already approved, already in use, and has been costing $10 per treatment for many years. To raise the price to $1,500 per injection just because they can is unconscionable.
This is just another attempt by Big Pharma to monopolize substances. You may recall our campaign to keep pharmaceutical companies’ hands off bioidentical estriol [9] and bioavailable B6 [10].
[1] A new Action Alert!: https://secure3.convio.net/aahf/site/Advocacy?cmd=display&page=UserAction&id=689
[2] could be as much as $30,000: http://www.huffingtonpost.com/2011/03/09/the-price-of-protecting-h_n_833731.html
[3] was quoted as saying: http://www.inforum.com/event/article/id/312255/group/Life/
[4] sent a letter to KV: http://marchofdimes.com/mar15_2011.html
[5] sent a letter: http://healthland.time.com/2011/03/11/kv-backlash-senator-condemns-pregnancy-drug-price-hike/
[6] with a letter to the FTC commission: http://www.nationaljournal.com/healthcare/sen-brown-drug-price-increase-from-10-to-1-500-is-unconscionable--20110321
[7] compounding pharmacies: http://www.pcab.info/about/about-pcab.html#1
[8] cease-and-desist letter: http://www.scribd.com/full/50467907?access_key=key-2lrhb9qzcprg07x7z460
[9] bioidentical estriol: http://www.anh-usa.org../../../../../abuse-of-fda-citizen-petitions/
[10] bioavailable B6: http://www.anh-usa.org../../../../../action-alert-natural-bioavailable-forms-of-b6-in-peril/