Time for drug companies to 'cease and desist' extortionist pricing policies

From Daily Kos here.

KV Pharmaceutical is behaving as pharma does in the wake of winning approval from the government to exclusively sell Makena, a form of progesterone used in high-risk pregnancies to prevent premature birth. They're raising the price of a single injection from $10 to $1,500.

Doctors say the price hike may deter low-income women from getting the drug, leading to more premature births. And it will certainly be a huge financial burden for health insurance companies and government programs that have been paying for it.

The cost is justified to avoid the mental and physical disabilities that can come with very premature births, said KV Pharmaceutical chief executive Gregory J. Divis Jr. The cost of care for a preemie is estimated at $51,000 in the first year alone.

"Makena can help offset some of those costs," Divis told The Associated Press. "These moms deserve the opportunity to have the benefits of an FDA-approved Makena."

That sounds just a little like extortion—pay the $1,500 per injection (they're required weekly for as much as 20 weeks) or experience the "mental and physical disabilities that can come with very premature births." These moms include a higher percentage of [African]-American women, as well as low-income women receiving Medicaid. But those with private insurance don't have any guarantees that the treatments will continue to be covered at the new, insane rate.

And there's more. ThinkProgress reports that the company is "seeking to prevent other pharmaceutical companies from producing a cheaper version. Last month, KV sent out a letter to compounding pharmacies to cease and desist from producing the drug."

TP also reports that the move hasn't gone totally unnoticed by government.

Sen. Sherrod Brown (D-OH) sent a letter to KV Pharmaceuticals Thursday demanding they “immediately reconsider the massive price increase.” Noting that African-American women have a higher percentage of premature births, and that fewer women will be able to afford the drug, Brown said he is “gravely concerned” that premature birth rates will increase nationwide. “[H]ealth insurance companies could either stop coverage of the treatment or impose higher premiums on consumers,” Brown said, adding that “state Medicaid programs — which are already struggling to make ends meet — will be forced to deal with the financial repercussions” of the “exorbitant” hike. “This isn’t in the interest of children, new mothers, or taxpayers,” Brown told ThinkProgress.

The FDA might also reconsider its granting of an exclusive license to KV.

[Emphasis added.] See previous post here. Logic would dictate that the cost of drugs should be based on the cost to produce them, plus R&D (which isn't as high as the drug companies claim), plus some reasonable profit. (The U.S. Government funds a lot of the R&D for drugs already.) Taking that into consideration, this particular drug company could make money selling the injection for $10 (as the compound pharmacies apparently do), but then jacks up the price by $1,490, which is pure profit for the company's executives and shareholders. And then it has the chutzpah to say it's giving you a break on your preemie costs. (All the while imposing a huge burden on our already teetering healthcare system.) This has to stop.

See ABC News story here.

Hydroxyprogesterone caproate injections have been around since 1956, and were commercially available up until 1999 when Squibb, the pharmaceutical company making them, withdrew the product from the market. In the past few years however, studies have shown that these injections had a positive effect in preventing pre-term birth among women who had previously had a spontaneous pre-term birth in the past. Since then, doctors have been able to fill prescriptions for the synthetic progesterone using compounding pharmacies at a price of $10 to $15 per injection.

Most health insurances did not cover these shots as they were not FDA approved, but given the low price of progesterone, women were able to pay out of pocket for the treatment, says Moritz.

It wasn't always easy to find places that made the medication, however, says Dr. Michael Lindsay, division director of Maternal-Fetal Medicine at Emory University School of Medicine, so "we were excited at first to hear it be FDA-approved."

"My mind-set was that now everyone could get it, but no one is going to be able to afford that," he says.

Many doctors are particularly frustrated with the price hike because to date, KV Pharmaceuticals has not had to bear the cost of the clinical trials used to get the drug approved, but they have announced plans to conduct further trials in the future.

"All the upfront development of the drug was done by the National Institute of Health. You and I paid for that with our tax dollars, it's not like this pharmaceutical company is trying to recoup its investments in research and development, as is usually the reason for the price of new drugs," says Dr. Kevin Ault, associate professor of gynecology and obstetrics at Emory University School of Medicine. . . .

The company does plan on providing financial assistance to people who can't afford it, but it shouldn't have to be so expensive in the first place. (Sounds like compounding pharmacies are a great idea for reducing some of our out-of-control healthcare costs.)