Outrage Over Drug Prices - Pharmaceutical Executive


Outrage Over Drug Prices

Pharmaceutical Executive

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FDA responded to the brouhaha with a remarkable statement: It would permit compounders to continue to make the synthetic progestin product for needy patients, overriding its usual practice of closing down the old producers of an unapproved drug once a manufacturer won market approval. FDA asserted that KV "is not correct" in warning pharmacists that the agency would crack down on 17P compounders. A carefully worded release from FDA says that it does not intend to take such enforcement action in order "to support access to this important drug, at this time and under this unique situation." The surprising move clearly reflected public concern over the product's price, a topic that FDA usually is very careful to avoid.

The situation also generated calls to revise the orphan drug law to prevent a sponsor from gaining seven years' exclusivity when it makes only a minimal investment in product development. Much of the research documenting Makena's efficacy was carried out by the National Institutes of Health, which provided data in 2003 from a clinical trial indicating benefit for preterm labor, which encouraged obstetricians to prescribe the drug more widely. KV's investment is the $200 million it's paying Hologic for marketing rights and several million more dollars to conduct further studies for FDA on neonatal mortality and morbidity and long-term effects on infant development.

KV tried to soften the price blow by touting a patient assistance program (PAP) that would lower the cost for everyone with incomes under $100,000 and for uninsured patients earning less than $60,000. But $30,000 still was a lot for even wealthy households to pay for treatment. And the complex process for qualifying for PAP subsidies could delay care.

One explanation for KV's marketing strategy is that company management desperately sought new revenues to revive the nearly bankrupt firm, which FDA had shut down for failing to comply with manufacturing and quality standards. Two years ago the firm entered into a consent decree with FDA for making and distributing adulterated and unapproved drugs. There were massive product recalls, criminal fraud charges and hefty fines. In March, a judge sentenced former KV CEO Marc Hermelin to jail and ordered $2 million in fines to resolve felony charges stemming from failure to comply with FDA regulations.

KV shares dropped after FDA told pharmacists they could continue to compound the product. The company cut its price in half—to $690 a dose—and proposed extra rebates to state Medicaid agencies. It touted the benefits of its approved product and its considerable investment in research and product distribution, but by then the damage had been done.

In the end, Makena may lose sales to a progesterone vaginal gel also found to prevent premature delivery. Recent clinical trial data indicates that Prochieve, developed by Columbia Laboratories and marketed by Watson Pharmaceuticals in the US, may help women with short cervixes avoid preterm delivery. The relatively inexpensive product is approved by FDA for women undergoing certain fertility treatments, and now Watson will seek FDA approval of this broader indication. Hopefully that won't bring a huge increase in price for another beneficial product.

Jill Wechsler is Pharmaceutical Executive's Washington correspondent. She can be reached at


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