easjer
03-24-2011, 09:04 AM
http://www.stltoday.com/business/local/article_bda7ebe9-ee6c-5d8b-b4e8-09daf6399ede.html
In a securities filing on Tuesday, KV Pharmacuetical Co. acknowledged that it had received a torrent of criticism over the high price of its newly approved prenatal drug, Makena, and that it could face challenges in getting the government and insurance companies to pay.
The disclosure amounts to the Bridgeton-based drugmaker's first public admission that public pressure and politics threaten to derail its plan to charge $1,500 a shot for an FDA-approved version of a drug that now costs about $15.
The company's growing list of critics includes some heavyweights, among them two U.S. senators — who have called for a Federal Trade Commission investigation into the drug company's pricing — several members of Congress, the March of Dimes Foundation, the New England Journal of Medicine, the American College of Obstetricians and Gynecologists, and the American Academy of Pediatrics.
An official at the March of Dimes — which effusively praised the Food and Drug Administration's decision last month to approve Makena — called KV's price "outlandish" on Tuesday.
"No one dreamt it would be $1,500 a dose," said Dr. Alan Fleischman, the organization's medical director. "We're outraged."
The drugmaker's list price for Makena — a drug it did not invent, but will sell under an exclusive marketing agreement — has shocked medical professionals. In recent years, an identical drug, 17P, has been available at low cost through compounding pharmacies and prescribed by physicians to help prevent preterm births.
KV's future success is "largely dependent" on its negotiations with third-party payers including health insurance companies, pharmacy benefit managers and Medicaid management companies as well as its ability to respond to media and political pressure, the company said in a Securities and Exchange Commission filing.
KV executives are banking on a successful launch of Makena to help steer the company back to profitability after two tough years that saw drug recalls, mass layoffs and guilty pleas to criminal charges by its wholly owned subsdiary, Ethex Corp., for shipping oversized morphine tablets.
The March of Dimes supported the FDA's approval of Makena because it will help make the prenatal drug available at consistent, safe dosages — but now is actively working against the company's pricing.
"We are working very diligently, consistently and aggressively to help the company understand that they need to change their list price," Fleischman said.
He and other health leaders have scheduled a meeting next week in Washington with KV Pharmaceutical representatives.
Fleischman acknowledged that KV Pharmaceutical, which has produced other women's drugs in the past, was a corporate sponsor of the March of Dimes. Since 2002, he said, the drugmaker has contributed about $1 million to the March of Dimes and its state chapters. But such donations do not influence the organization's advocacy for or against any drug, he said.
KV officials did not respond to requests for comment. But it addressed the criticism on its website: "We appreciate the concerns expressed by multiple audiences, and are committed to working collaboratively with all interested parties to make this vital medication even more available and affordable to women across the country."
In a letter March 14 to KV Pharmaceutical president Greg Divis, Fleischman and March of Dimes president Jennifer Howse voiced concerns about Makena's pricing, saying: "We remain deeply concerned that the cost of this lifesaving treatment could be put out of reach to thousands of women at risk for preterm delivery. Therefore, we respectfully request that you reconsider the market price of Makena and commit your company to the promise that every eligible woman who is offered the drug will receive it without regard to ability to pay."
Similarly, a joint letter to KV Pharmaceutical by the presidents of the American Academy of Pediatrics, the American College of Obstetricians and Gynecologists, and the Society of Maternal-Fetal Medicine described KV's pricing of Makena as "extremely expensive" and asked the drugmaker to re-evaluate its price.
"Frankly, in our current climate of controlling health care costs in the United States, an added cost of $30,000 (per course of therapy) for as many as 140,000 pregnancies per year, or 4.2 billion dollars, is a staggering figure," the March 11 letter said.
The joint letter also said that KV's financial assistance program for patients "is not sufficient and does not extend to certain groups of women." The company has stated that it would expand a program to help patients afford the drug, but hasn't disclosed the amount of the planned subsidy.
The three organizations voiced concern that the Medicaid program for the poor would not be able to afford Makena injections for its patients.
"Medicaid programs are crumbling financially," their letter said. "It is unclear whether state Medicaid programs, which cover the majority of these high-risk pregnancies, will be willing to or able to pay for the cost of treatment."
The federal Centers for Medicare and Medicaid Services has declined through spokeswoman Mary Kahn to discuss Makena's pricing.
Meanwhile, the Journal of New England Medicine published an article on March 16 that asked, "Can there be any justification for driving up the cost of an available medication from about $300 to $30,000 — about a 100-fold increase — with minimal added clinical benefit?"
The author, Dr. Joanne Armonstrong, concluded that Makena's pricing "will force patients, physicians, and those responsible for financing care to make hard choices. ... This tremendous cost increase and the likely decrease in access to an effective medicine are sizable unintended consequences of the FDA approval. ... They demand reconsideration and corrective action."
Two senators — Amy Klobuchar, D-Minn., and Sherrod Brown, D-Ohio, have asked the Federal Trade Commission to open an investigation into the drug company's "potential anticompetitive conduct."
"Price gouging is never acceptable, particularly not when it undermines public health and fleeces taxpayers," Brown said in a written statement.
At a recent Senate hearing, Brown questioned FDA commissioner Dr. Margaret Hamburg about Makena's price. "It looks a lot like blackmail to me," the senator said.
Hamburg responded that she "was very surprised" to learn of the drug's price increase but noted that current law did not allow the agency to get involved in drug pricing.
Rep. Allyson Schwartz, D-Pa., said in an interview Tuesday that she was working with several members of Congress in an effort to persuade KV Pharmaceutical to lower its price.
"My interest is making sure that it's accessible — that insurance companies, families and state governments can pay the price," she said. "Right now, there are families and pregnant women who want access to this. It needs to be affordable."
Copyright 2011 STLtoday.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
This hits home for me in a big way. This drug is supposed to be part of my treatment in a next pregnancy, in addition to a cerclage. There are drugs that can be given to stop labor, but they are less effective when it's not a trauma issue (when it's a body issue, and not, say, a car accident). Makena/17p is one of the most effective treatments they've found in recurrent preterm labor.
Their argument for increase (from $10-$20 to $1500 per shot, with a standard course of 1 injection/week for 20 weeks) is that they need to recoup research money they poured into this. Except they were not the inventors and a fair amount of research was funded by public and private grants. They've threatened suit over patents if compounding pharmacies continue to make the drug. The CEO of the company is on record as saying that the average cost of a NICU stay is $51,000, so this price (a hefty $30,000 for average treatment) is a savings.
While the company has offered an assistance program, I know my friend who requires 17p would not qualify, and her insurance company has already indicated that they don't intend to fund Makena, because the costs are too high. Her first child was born at 29 weeks. With the help of 17p, her second was full-term. However, their assistance program will still require an out of pocket weekly payment for the drug, and many low-income families wouldn't be able to afford it, even with assistance.
Then there are children like my son, who was born before life-saving measures (like NICU) could be taken. The price they are asking for - for pure profit - would lead directly to newborn/infant death due to prematurity.
Because the company wants a huge profit margin.
It's sickening.
Even if some insurance companies do pick this up, and agree to cover treatment (on the theory that it is less expensive than NICU stays and preemie health problems), it ultimately means higher premiums across the board. Because the company wants a huge profit margin.
:(
In a securities filing on Tuesday, KV Pharmacuetical Co. acknowledged that it had received a torrent of criticism over the high price of its newly approved prenatal drug, Makena, and that it could face challenges in getting the government and insurance companies to pay.
The disclosure amounts to the Bridgeton-based drugmaker's first public admission that public pressure and politics threaten to derail its plan to charge $1,500 a shot for an FDA-approved version of a drug that now costs about $15.
The company's growing list of critics includes some heavyweights, among them two U.S. senators — who have called for a Federal Trade Commission investigation into the drug company's pricing — several members of Congress, the March of Dimes Foundation, the New England Journal of Medicine, the American College of Obstetricians and Gynecologists, and the American Academy of Pediatrics.
An official at the March of Dimes — which effusively praised the Food and Drug Administration's decision last month to approve Makena — called KV's price "outlandish" on Tuesday.
"No one dreamt it would be $1,500 a dose," said Dr. Alan Fleischman, the organization's medical director. "We're outraged."
The drugmaker's list price for Makena — a drug it did not invent, but will sell under an exclusive marketing agreement — has shocked medical professionals. In recent years, an identical drug, 17P, has been available at low cost through compounding pharmacies and prescribed by physicians to help prevent preterm births.
KV's future success is "largely dependent" on its negotiations with third-party payers including health insurance companies, pharmacy benefit managers and Medicaid management companies as well as its ability to respond to media and political pressure, the company said in a Securities and Exchange Commission filing.
KV executives are banking on a successful launch of Makena to help steer the company back to profitability after two tough years that saw drug recalls, mass layoffs and guilty pleas to criminal charges by its wholly owned subsdiary, Ethex Corp., for shipping oversized morphine tablets.
The March of Dimes supported the FDA's approval of Makena because it will help make the prenatal drug available at consistent, safe dosages — but now is actively working against the company's pricing.
"We are working very diligently, consistently and aggressively to help the company understand that they need to change their list price," Fleischman said.
He and other health leaders have scheduled a meeting next week in Washington with KV Pharmaceutical representatives.
Fleischman acknowledged that KV Pharmaceutical, which has produced other women's drugs in the past, was a corporate sponsor of the March of Dimes. Since 2002, he said, the drugmaker has contributed about $1 million to the March of Dimes and its state chapters. But such donations do not influence the organization's advocacy for or against any drug, he said.
KV officials did not respond to requests for comment. But it addressed the criticism on its website: "We appreciate the concerns expressed by multiple audiences, and are committed to working collaboratively with all interested parties to make this vital medication even more available and affordable to women across the country."
In a letter March 14 to KV Pharmaceutical president Greg Divis, Fleischman and March of Dimes president Jennifer Howse voiced concerns about Makena's pricing, saying: "We remain deeply concerned that the cost of this lifesaving treatment could be put out of reach to thousands of women at risk for preterm delivery. Therefore, we respectfully request that you reconsider the market price of Makena and commit your company to the promise that every eligible woman who is offered the drug will receive it without regard to ability to pay."
Similarly, a joint letter to KV Pharmaceutical by the presidents of the American Academy of Pediatrics, the American College of Obstetricians and Gynecologists, and the Society of Maternal-Fetal Medicine described KV's pricing of Makena as "extremely expensive" and asked the drugmaker to re-evaluate its price.
"Frankly, in our current climate of controlling health care costs in the United States, an added cost of $30,000 (per course of therapy) for as many as 140,000 pregnancies per year, or 4.2 billion dollars, is a staggering figure," the March 11 letter said.
The joint letter also said that KV's financial assistance program for patients "is not sufficient and does not extend to certain groups of women." The company has stated that it would expand a program to help patients afford the drug, but hasn't disclosed the amount of the planned subsidy.
The three organizations voiced concern that the Medicaid program for the poor would not be able to afford Makena injections for its patients.
"Medicaid programs are crumbling financially," their letter said. "It is unclear whether state Medicaid programs, which cover the majority of these high-risk pregnancies, will be willing to or able to pay for the cost of treatment."
The federal Centers for Medicare and Medicaid Services has declined through spokeswoman Mary Kahn to discuss Makena's pricing.
Meanwhile, the Journal of New England Medicine published an article on March 16 that asked, "Can there be any justification for driving up the cost of an available medication from about $300 to $30,000 — about a 100-fold increase — with minimal added clinical benefit?"
The author, Dr. Joanne Armonstrong, concluded that Makena's pricing "will force patients, physicians, and those responsible for financing care to make hard choices. ... This tremendous cost increase and the likely decrease in access to an effective medicine are sizable unintended consequences of the FDA approval. ... They demand reconsideration and corrective action."
Two senators — Amy Klobuchar, D-Minn., and Sherrod Brown, D-Ohio, have asked the Federal Trade Commission to open an investigation into the drug company's "potential anticompetitive conduct."
"Price gouging is never acceptable, particularly not when it undermines public health and fleeces taxpayers," Brown said in a written statement.
At a recent Senate hearing, Brown questioned FDA commissioner Dr. Margaret Hamburg about Makena's price. "It looks a lot like blackmail to me," the senator said.
Hamburg responded that she "was very surprised" to learn of the drug's price increase but noted that current law did not allow the agency to get involved in drug pricing.
Rep. Allyson Schwartz, D-Pa., said in an interview Tuesday that she was working with several members of Congress in an effort to persuade KV Pharmaceutical to lower its price.
"My interest is making sure that it's accessible — that insurance companies, families and state governments can pay the price," she said. "Right now, there are families and pregnant women who want access to this. It needs to be affordable."
Copyright 2011 STLtoday.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
This hits home for me in a big way. This drug is supposed to be part of my treatment in a next pregnancy, in addition to a cerclage. There are drugs that can be given to stop labor, but they are less effective when it's not a trauma issue (when it's a body issue, and not, say, a car accident). Makena/17p is one of the most effective treatments they've found in recurrent preterm labor.
Their argument for increase (from $10-$20 to $1500 per shot, with a standard course of 1 injection/week for 20 weeks) is that they need to recoup research money they poured into this. Except they were not the inventors and a fair amount of research was funded by public and private grants. They've threatened suit over patents if compounding pharmacies continue to make the drug. The CEO of the company is on record as saying that the average cost of a NICU stay is $51,000, so this price (a hefty $30,000 for average treatment) is a savings.
While the company has offered an assistance program, I know my friend who requires 17p would not qualify, and her insurance company has already indicated that they don't intend to fund Makena, because the costs are too high. Her first child was born at 29 weeks. With the help of 17p, her second was full-term. However, their assistance program will still require an out of pocket weekly payment for the drug, and many low-income families wouldn't be able to afford it, even with assistance.
Then there are children like my son, who was born before life-saving measures (like NICU) could be taken. The price they are asking for - for pure profit - would lead directly to newborn/infant death due to prematurity.
Because the company wants a huge profit margin.
It's sickening.
Even if some insurance companies do pick this up, and agree to cover treatment (on the theory that it is less expensive than NICU stays and preemie health problems), it ultimately means higher premiums across the board. Because the company wants a huge profit margin.
:(