Last week, I started following a still emerging story about a drug that I had never heard of before called Makena. The medication is a synthetic form of progesterone that is used for women who have a high risk of prematurely delivering a baby based on having had a premature delivery in the past. The drug must be injected by these women weekly for 18-20 weeks of their pregnancy.
According to the Baltimore Sun, the controversy surrounding this drug began when the “…K-V Pharmaceutical Co. boosted the total cost of the drug during a pregnancy from about $400 to $30,000, igniting a firestorm of objections.” This was possible because originally the medication was created by a compounding pharmacy mixing it together for patient use. Then in February, the FDA granted K-V Pharmaceutical Co. the exclusive rights to manufacture the medication for seven years.
If raising the cost of the medication 75 times its original cost (from $10-20/dose to $1,500/dose) were not enough, the Baltimore Sun reports that the company then went on to “sen[d] letters to pharmacies threatening that the FDA would punish them if they compounded their own versions of the drug.” However, the FDA, amid a loud outcry of complaints, has “…declared it would do no such thing. In its statement, the FDA noted that the drug was important and K-V ‘received considerable assistance from the federal government in connection with the development of Makena by relying on research funded by the National Institutes of Health to demonstrate the drug’s effectiveness.’”
What has been so interesting are the implications of this story and the reactions to it. Clearly, the original decision by the pharmaceutical company to raise the cost of the drug 75 times the old cost is an attempt to make money from their exclusive rights. I can hardly imagine that there is any reason other than profit creation for this move given that they did not have costs associated with research and development or any other clearly identifiable costs. So, aside from my initial reaction of disgust that this might make it harder for women who need this medication to protect their children, I also thought about the bigger implications.
First of all, the cost issue is not so simple as it first appears. As another article from the Baltimore Sun mentioned, “[t]he burden for many will fall on insurance companies, which may have to raise rates. The increase will also affect already strapped Medicaid programs.” The increased costs of drugs impact many Americans directly – those without insurance or those for whom even co-pays are a major budgetary struggle. However, the costs here also reach all of us. If the costs associated with the company’s increased profit are borne by the insurance companies and Medicaid, it also means that the costs are going to be felt by all of us who pay for health insurance or whose companies pay for health insurance and yes, by all of us, who pay taxes.
Secondly, for those women who do not realize that they could still go to a compounding pharmacy for this prescription and for whom it is not covered by insurance, the increased cost may mean that some woman will go without these injections. The Baltimore Sun article reports that:
About 500,000 U.S. infants are born prematurely each year. The March of Dimes estimates that about 10,000 of those premature births could be prevented if eligible women received Makena.
The implications here deal with both the health and safety of the unborn child who is now at risk of premature birth. But, unfortunately, they also have an associated monetary cost. The cost of a baby being born prematurely is also going to weigh on the insurance companies and is, therefore, going to be shared by all in the form of potentially increased premiums.
Given the intense criticism in the news, K-V Pharmaceutical Company moderately changed course in the last few days, according to Medical News Today and said they would bring the cost of Makena down to $690 per dose from the originally announced price of $1,500 per dose. While this is lower, this is hardly a significant adjustment given that the compounded version costs between $10-20 per dose. The March of Dimes, which originally backed FDA approval of the drug and was allowing the pharmaceutical company’s use of its name and logo, is apparently embarrassed by KV Pharmaceutical’s decisions. According to an article on the nonprofitquarterly.org, “…the March of Dimes is backing out of a sponsorship deal with the [pharmaceutical] company that sells [Makena]. Last Friday, the nation’s leading nonprofit focused on the health of pregnant women and babies said it would no longer allow St. Louis-based, KV Pharmaceutical Co. to use its name or logo in any of the drug company’s promotions.”
The response from the March of Dimes is not KV Pharmaceutical Co.’s only trouble as the Wall Street Journal is reporting that after the FDA announcement that it will not take action against pharmacies that compound the drug, and the company subsequently announced that it would cut the cost, the company’s shares fell 5.2%. Reuter’s is reporting that this represents a drop of more than 20 percent. Congress is also in an uproar about this issue. The Reuter’s article says that elected officials are creating pressure for more to do be done on this issue.
What do you think should be done about KV Pharmaceutical Co.? Are they really any different from any of the other pharmaceutical companies? Is it relevant to consider that this is a so-called orphan drug and that the company has exclusive rights because of this? Do you think that allowing compounding pharmacies to create the drug for woman separate from the FDA approved drug is a sufficient solution? What about the bigger question of companies creating inflated prices for their products and having insurance (and all of us) foot the bill?