Preemie birth preventive spikes from $10 to $1,500

[EmperorNapoleon]

[The price of preventing preterm labor is about to go through the roof.

A drug for high-risk pregnant women has cost about $10 to $20 per injection. Next week, the price shoots up to $1,500 a dose, meaning the total cost during a pregnancy could be as much as $30,000.

That’s because the drug, a form of progesterone given as a weekly shot, has been made cheaply for years, mixed in special pharmacies that custom-compound treatments that are not federally approved.

But recently, KV Pharmaceutical of suburban St.Louis won government approval to exclusively sell the drug, known as Makena (Mah-KEE’-Nah). The March of Dimes and many obstetricians supported that because it means quality will be more consistent and it will be easier to get.

None of them anticipated the dramatic price hike, though — especially since most of the cost for development and research was shouldered by others in the past.](http://news.yahoo.com/s/ap/20110310/ap_on_he_me/us_med_premature_birth_drug)

This is a prime example of why the pharmaceutical industry should be heavily regulated with price controls. Somehow a big pharma company gets exclusive rights to sell a drug thats been around for more than 50 years and they hike the price by 15,000%.

 

[bbarrick8383]

This is a prime example of why the pharmaceutical industry should be heavily regulated with price controls. Somehow a big pharma company gets exclusive rights to sell a drug thats been around for more than 50 years and they hike the price by 15,000%.

Were there issues with the drug that led the government to give them the exclusive rights to it?

I don’t blame the company if not, I blame the government. It’s a prime example of what happens when the government puts its nose in places it doesnt belong.

Otherwise if they had problems with quality the smart move would have been to restrict production to a limited number of qualified companies who met certain standards.

 

[EmperorNapoleon]

Were there issues with the drug that led the government to give them the exclusive rights to it?

Not that I know of. This drug was approved by the FDA in 1956 under the name Delalutin.

I don’t blame the company if not, I blame the government. It’s a prime example of what happens when the government puts its nose in places it doesnt belong.

The government didn’t make the company issue a 15,000% markup.

 

[bbarrick8383]

Not that I know of. This drug was approved by the FDA in 1956 under the name Delalutin.

The government didn’t make the company issue a 15,000% markup.

The government did the stupid thing and gave them a monopoly on the drug. Don’t blame the company, does it suck that they did it, yes it does. Do I blame them? Not one bit. Would I have done it, nope.

But, you should also point out they will be giving the drug away to many women for free.

As for the cost, he said the drug maker’s financial assistance program will ensure no eligible woman is denied the drug due to inability to pay

Blame the government, it was a stupid move on their side and they gave exclusive rights for the company to do it.

 

[EmperorNapoleon]

The government did the stupid thing and gave them a monopoly on the drug.

I agree; it was stupid to give this company a monopoly on the drug.

Don’t blame the company, does it suck that they did it, yes it does. Do I blame them? Not one bit. Would I have done it, nope.

I’m having a hard time understanding why any pro-life person would think this company is blameless for it’s obviously insatiable greed to the detriment of the physical and mental health of a fetus.

But, you should also point out they will be giving the drug away to many women for free.

How magnanimous.

 

[bbarrick8383]

I agree; it was stupid to give this company a monopoly on the drug.

I’m having a hard time understanding why any pro-life person would think this company is blameless for it’s obviously insatiable greed to the detriment of the physical and mental health of a fetus.

Because that’s what happens when government get’s involved, stupid things. Write a letter to the company and tell them how sorry they are if it will make you feel better.

I’d like to find out who gave them the monopoly and their political affiliation. I smell a money trail.

I already said I personally don’t agree with their decision to jack the price up, but hey the government gave them the go ahead.

 

[Suudy]

I don’t think its as cut and dry as the OP makes it out to be.

businessweek.com/lifestyle/content/healthday/649631.html

From the article: Hydroxyprogesterone caproate is also the same drug as a much older one called Delalutin, which was approved by the FDA in 1956 and was used to treat female hormone disturbances and cancer, but withdrawn from the market for business reasons in 2008, the agency says.
“Makena is chemically the same as Delalutin,” Burgess said.
What is new here is that a drug company will be making the drug; it won’t have to be made up in pharmacies, according to Fleischman. “There will be consistency and high quality. This makes it a breakthrough not only that it’s FDA approved and doctors will be comfortable in recommending it, but also there will be high quality and consistency for women as they take it,” he said.
First off, the original drug, Delalutin, was pulled from the market. The article above says “for business reasons”, but not by the same company making Makena. As far as I can tell, Delalutin was made by Bristol-Meyers, and KV Pharmaceuticals is unrelated to BM. Also, Delalutin had to be made by a compounding pharmacy, and was subject to quality concerns. Since Makena has been FDA approved, it is now (more) heavily regulated for quality than individual compounding pharmacies.

I also don’t see any evidence that compounding pharmacies are not precluded from continuing to make an equivalent drug. So, the commercial version of Makena may cost $1500 per dose, but that doesn’t mean the compounded version will cost that much.

And, alternatives are available on the market. According to this article, the only difference is that the alternatives are daily rather than weekly.

Also, KV Pharmaceuticals has indicated that prescription assistance is available for those making up to $100,000 (source). The poor are hardly being gouged by this.

 

[EmperorNapoleon]

I also don’t see any evidence that compounding pharmacies are not precluded from continuing to make an equivalent drug. So, the commercial version of Makena may cost $1500 per dose, but that doesn’t mean the compounded version will cost that much…

As far as I know; there’s only one formula for 17OHPC proven to be effective and KV Pharmaceuticals was granted exclusive rights to distribute the drug. There is no generic equivalent. Compounding pharmacies only continued to make Delalutin because it was/is an existing formula that they knew worked and had already been approved by the FDA.

And, alternatives are available on the market. According to this article, the only difference is that the alternatives are daily rather than weekly.

Which, as the article points out, haven’t been studied and have no clinical trials to back their use. It would be very very easy for a doctor to be sued for prescribing these “alternatives” since, without such studies and trials, no one knows the possible side-effects, how they interact with other medications, or if they’re even effective at all.

Also, KV Pharmaceuticals has indicated that prescription assistance is available for those making up to $100,000 (source). The poor are hardly being gouged by this.

As I said; how magnanimous. They created the problem in the first place. Somebody hast to foot the bill for this price increase and isnt going to be KV Pharmaceuticals. They must have struck a deal with insurance companies from the sound of that assistance program (otherwise how could they guarantee a specified insurance copay) so the cost will have to be absorbed by the rest of the insurance pool.

 

[Suudy]

As far as I know; there’s only one formula for 17OHPC proven to be effective and KV Pharmaceuticals was granted exclusive rights to distribute the drug. There is no generic equivalent. Compounding pharmacies only continued to make Delalutin because it was/is an existing formula that they knew worked and had already been approved by the FDA.

The FDA approved Delalutin, not the compounding formulas. So doctors who were prescribing compounding versions were already prescribing unapproved drugs. More on this point below.

Also, KV Pharmaceuticals were only granted exclusive rights for the particular mode of delivery. One article I linked indicates that there are alternative modes of delivery that are not protected, and it seems that the compounding solutions–insofar as they do not conflict with KV’s mode of delivery–are legitimate as well.

Which, as the article points out, haven’t been studied and have no clinical trials to back their use. It would be very very easy for a doctor to be sued for prescribing such alternatives since, without such studies and trials, no one knows the possible side-effects, how they interact with other medications, or if they’re even effective at all.

So, Delalutin has been off the market since 2008 (or 2001, depends on the article), yet doctors have been prescribing it? Suddenly now that Makena has been approved doctors are more prone to lawsuit?

There have been studies, but not to the extent of Makena. The premium paid for Makena is for those more extensive studies.

As I said; how magnanimous. They created the problem in the first place.

Ummm, no they didn’t. Delalutin was pulled off the market. That isn’t KV’s fault. Also, it doesn’t effect the existing compounding market. Only Makena is $1500. Compounding solutions continue to be about $10.

Somebody hast to foot the bill for this price increase and isnt going to be KV Pharmaceuticals. They must have struck a deal with insurance companies from the sound of that assistance program (otherwise how could they guarantee a specified insurance copay) so the cost will have to be absorbed by the rest of the insurance pool.

I think you fail to understand product development. For example, our company refuses to approve a project that does not recoup its development costs (amortized over material costs) within 2 years. For example, if we estimate a project to cost $500,000, then our sales margin must recoup $500,000 in 2 years. Yet we design all our products with planned obsolescence of at least 10 years. After the first 2 years of sales, we lower our price after we have recouped the cost of development.

No doubt KV is making the same business decision. They need to recoup their development costs. They make concessions to certain market segments to keep their market share up, but the general pricing is there to recoup costs. I would not be the least bit surprised if a generic Makena appeared on the market in the next couple of years.

 

[EmperorNapoleon]

So, Delalutin has been off the market since 2008 (or 2001, depends on the article), yet doctors have been prescribing it? Suddenly now that Makena has been approved doctors are more prone to lawsuit?.

We’re talking about the difference between Delalutin produced by compound pharmacies and compound pharmacies frankensteining “alternatives” which have never been studied.

Ummm, no they didn’t. Delalutin was pulled off the market. That isn’t KV’s fault.

No one is blaming KV for Delalutin being yanked off the market. They’re, rightly, being blamed for gouging American consumers with a 15,000% markup.

No doubt KV is making the same business decision. They need to recoup their development costs…

KV didn’t develop the drug; they just bought the existing formula and changed the name from Delalutin to Makena. Nothing changed between the time Delalutin was approved and released to the market in 1956 and now and their studies were nothing but duplications of other studies which had already been conducted and their results confirmed.

 

[Suudy]

We’re talking about the difference between Delalutin produced by compound pharmacies and compound pharmacies frankensteining “alternatives” which have never been studied.

So, doctors haven’t prescribed Delalutin or it’s “frankenstein” alternatives since Delalutin went off the market?

No one is blaming KV for Delalutin being yanked off the market. They’re, rightly, being blamed for gouging American consumers with a 15,000% markup.

They are only charging for a specific mode of delivery. This has no impact on the state of Delalutin alternatives that have been on the market since 1956 (even after Delalutin was pulled).

KV didn’t develop the drug; they just bought the existing formula and changed the name from Delalutin to Makena. Nothing changed between the time Delalutin was approved and released to the market in 1956 and now and their studies were nothing but duplications of other studies which had already been conducted and their results confirmed.

Source? That doesn’t seem to be the case at all. It appears that KV has received a patent for a specific mode of delivery of hydroxyprogesterone caproat. The formula for hydroxyprogesterone caproate may not have changed, but the mode of delivery has. This is unrelated to the original Delalutin other than the active ingredient. In fact, it appears that hydroxyprogesterone caproate is still available in the same forms it has been since Delalutin was pulled from the market.

 

[EmperorNapoleon]

Source? That doesn’t seem to be the case at all. It appears that KV has received a patent for a specific mode of delivery of hydroxyprogesterone caproat…

Actually, we’re both wrong. KV purchased Makena from Hologic, Inc so even if the mode of delivery between Delalutin and Makena is different; KV is still raking in the bucks for another company’s development.

 

[Suudy]

Actually, we’re both wrong. KV purchased Makena from Hologic, Inc so even if the mode of delivery between Delalutin and Makena is different; KV is still raking in the bucks for another company’s development.

Yet they purchased that development (and I presume that associated patent). Would it be just a problematic to you had Hologic charged $1500?

 

[EmperorNapoleon]

Yet they purchased that development (and I presume that associated patent). Would it be just a problematic to you had Hologic charged $1500?

For something that costs less than $10 to make? Absolutely!

 

[Suudy]

For something that costs less than $10 to make? Absolutely!

But that’s the point. The specific formulation (i.e. mode of delivery) doesn’t cost less than $10 to make. In fact, it probably cost millions to develop. As I pointed out in my earlier post, the price is driven by the required margin to recoup development (or in this case purchase) costs.

For example, we have products that cost perhaps $200 in materials. Yet we sell them for $5k. We also have some products that cost only about $50 in materials, but we sell them for $1k. We do this to recoup the development costs and then anything after that is rolled back into future product development. Or do you think we too are gouging our customers? If so, then you are being gouged on everything you buy, from soda to iPods to laptops to cars to sheets to antacids to electricity. These margins exist on every product, and in some cases, you might be surprised to see just how large they are.

 

[EmperorNapoleon]

But that’s the point. The specific formulation (i.e. mode of delivery) doesn’t cost less than $10 to make. In fact, it probably cost millions to develop. As I pointed out in my earlier post, the price is driven by the required margin to recoup development (or in this case purchase) costs…

KV didn’t develop the specific formulation.

Or do you think we too are gouging our customers?.

Of course I do but medicine is far more essential to life than an ipod.]

 

[Suudy]

KV didn’t develop the specific formulation.

So? They bought the rights to it. Or do you think patents/trade secrets shouldn’t be bought or sold? Would it be ok for Hologenic so charge more than $10 since they developed it?

Of course I do but medicine is far more essential to life than an ipod.]

We don’t develop consumer products. We develop protection equipment for industrial and utility control systems. They are essential for protecting equipment and lives.

So, you seem to think that all products that serve some essential function, regardless of it’s incarnation (formula/mode of delivery/size/shape/etc), should not be sold at a profit. If so, that would essentially kill all innovation.

 

[EmperorNapoleon]

So? They bought the rights to it.

Which shatters the excuse that they are right in price gouging to recoup development costs. They didn’t develop anything.

Would it be ok for Hologenic so charge more than $10 since they developed it?

I think there should be profit-margin caps on essential goods like food and medicine; yes.

 

[He_Man]

Which shatters the excuse that they are right in price gouging to recoup development costs. They didn’t develop anything.

I think there should be profit-margin caps; yes.

Do you think they bought the rights for a price that didn’t pay the original company for their development costs? They are accounted for somewhere.

 

[EmperorNapoleon]

Do you think they bought the rights for a price that didn’t pay the original company for their development costs? They are accounted for somewhere.

I’ve ready that they bought it for approximately $200 million. Still doesn’t excuse a 15,000% markup. KV told the SEC that it expects to make more than double that amount in sales of Makena within 2 years.