Price of Pregnancy Drug Raised Thanks to FDA

Posted on March 15, 2011 by

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Pregnant Woman

Life just got harder for a lot of pregnant women—and they have the federal government to thank.

Makena is a drug given to pregnant women who are at risk for premature delivery. It’s administered in a series of weekly shots and can be prescribed for as many as 20 weeks. Until recently, it cost between $10 – $20 per shot. But the price just shot up—to $1500 per shot.

That’s because until recently, Makena was mixed in special pharmacies that are allowed to sell custom-compound treatments that aren’t federally approved. But last month, the FDA approved Makena—but only Makena manufactured by KV Pharmaceutical, who spent hundreds of millions of dollars to prepare their case for FDA approval.

Now Makena is designated as an “orphan drug,” which means KV Pharmaceutical has a monopoly on distribution for the next seven years. Upon receiving FDA approval,  KV Pharmaceutical promptly sent cease-and-desist letters to compounding pharmacies and raised the price of an injection of Makena to $1500.

Contrary to arguments otherwise, KV Pharmaceutical isn’t really to blame for this mess. They saw an opportunity to corner the market on federally-approved Makena and they seized it. And last week, KV’s subsidiary Ther-Rx introduced a patient assistance program that will help low-income women afford the drug.

But KV’s monopoly is still going to raise costs for at-risk pregnant women; and it’s going to raise costs for insurance companies, who will transfer those cost increases to customers.

More importantly, KV’s price hike means that some women who might earlier have had access to Makena will now have to go without and take their chances.

So who is to blame for this?

The FDA. The FDA has distorted incentives in the pharmaceutical industry so much so that KV Pharmaceutical rationally chose to spend hundreds of millions of dollars to have an already-in-use drug federally approved.

Now, insurance companies are scrambling to re-evaulate their coverage of the drug, and pharmacies who used to mix the drug are being threatened with FDA action if they continue. A lot of people are worse off because of the KV Pharmaceutical monopoly on Makena. So who won?

Obviously, it looks like KV Pharmaceutical got a pretty good deal out of the whole thing. But so did the FDA, in their own way: After all, their raison d’être is control, and now they’ve asserted just a little bit more of it. Because of the FDA, Makena will  no longer be mixed by special pharmacies, but by one federally-endorsed company. Sure, maybe the quality of the drug will be more consistent now; but does that matter much to women like 33-year-old Beatrice Diaz? The AP reports:

During her first pregnancy nine years ago, Diaz unexpectedly went into labor at about 24 weeks. She delivered a son, Garrison, who was so fragile she was not allowed to hold him for a month. Today he is in a wheelchair and has the mental capacity of a 9-month-old.

It was a shock, said Diaz, who at the time was a legal assistant in a prosecutor’s office.

“Honestly I thought the only people who had 1-pound babies were crackheads,” she said.

When she became pregnant again, her doctor prescribed the progesterone drug, a weekly injection that starts as early as the 16th week and may be given for as much as 20 weeks. She has since had two healthy, full-term baby girls, Hailyn and Alexa.

Diaz said she’s not planning to have any more children — and that’s a good thing.

“That’s an insane amount of money. I don’t know what I would do to get the money to afford it,” she said.

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Posted in: Health Care