What were they thinking? is the main response to any mention of KV Pharmaceutical's launch campaign for Makena, a drug to prevent preterm birth for
high-risk women. This injectable progesterone has been around for decades, widely available from compounders for a relatively
low $10 to $15 a dose. KV jacked that up to $1,500 a shot, causing an uproar that made pharma marketers cringe. It also raised
questions about the Food and Drug Administration's orphan drug exclusivity policy, the agency's campaign to encourage registration
of unapproved drugs, and the value of pharma patient assistance programs.
The nation's focus on healthcare spending, including the squeeze on state Medicaid programs and proposals to radically overhaul
Medicare (see sidebar), has cast a harsh light on pharma spending. Payers and providers complain about price hikes on AIDS
drugs, as seen in a request from California officials for Gilead Sciences to cut the price of Atripla, because $22,000 a year
per patient is taking a toll on the state's AIDS drug assistance program.
Slashing Healthcare Costs
High prices for new, important therapies raise concerns about access and impact on public and private health plans. Bristol-Myers
Squibb (BMS) won plaudits for its new melanoma treatment, Yervoy (ipilimumab), which FDA approved in March. But patients and
payers were surprised by BMS' plan to charge $120,000 for a complete course of treatment—six times more than expected. Dendreon's
$90,000 price tag for its therapeutic prostate cancer vaccine Provenge prompted a review of the costs and benefits for Medicare
patients by the Centers for Medicare and Medicaid Services (CMS). The agency decided that Medicare will pay for the therapy
for some patients, but health advocates admit to qualms about Medicare assuming such a large cost for relatively minor benefit.