Uproar over Makena

These pricing controversies paled in comparison to the KV decision to ratchet up the price for Makena (hydroxyprogesterone caproate) to $30,000 for a full course of treatment, compared to a few hundred dollars from pharmacy compounders.

KV was free to set a high price on Makena, commonly known as 17P, because it gained exclusive rights to market the therapy under FDA's campaign to encourage manufacturers to test and seek approval of "grandfathered" products that were available prior to the 1965 amendments and remained on the market as unapproved drugs. Hologic, a Massachusetts firm specializing in drugs and diagnostics related to women's health, filed a new drug application for 17P several years ago and finally won FDA approval in February. As planned, Hologic sold the drug to KV for about $200 million, a price enhanced by Makena's orphan drug designation, which carries seven years' exclusivity.

Up until KV announced its new price, it had strong support from the medical and healthcare community for developing a standardized, quality manufacturing process that was expected to enhance patient access to an effective and safe therapy. The drug is projected to prevent at least 10,000 preterm births a year in the United States and directly save the healthcare system $334 million annually, according to Aetna medical officer Joanne Armstrong, writing in the New England Journal of Medicine (March 17). But, Armstrong explained, providing preventive care to some 139,000 women at risk for premature delivery would cost $42 million with a progesterone compound that cost about $300 for a 20-week treatment; with Makena, at $29,000 for treatments, the bill soars to $4 billion.

Hospitals and physicians cried foul. Insurers and payers were livid. Senators Sherrod Brown (D-Ohio) and Amy Klobuchar (D-Minn.) called for CMS and the Federal Trade Commission to investigate KV's pricing action. The March of Dimes, the American College of Obstetrics and Gynecology and the American Academy of Pediatrics, which had supported 17P registration, demanded that the company reduce the price.