Rep. Henry Waxman demands answers from Ther-Rx about Makena

Rep. Henry Waxman, Rep. Frank Pallone, Jr., and Rep. Diana DeGette sent a letter on March 24th to Gregory Divis, the CEO of Ther-Rx, regarding the pricing of Makena (see below). Of note, the honorable Mr. Waxman, Mr. Pallone, Jr, and Ms. Degette produced a far more sternly worded letter and asked much better questions than Dr. Howse from the March of Dimes.    

The letter gives an April 1, 2011 time line for a response.

What remains to be seen is whether Ther-Rx will cave and drop the price, or are they going to hunker down and ride out the storm? Personally, I think anything over $100 a shot is ridiculous. That kind of price point still gives them an incredible mark up an a drug that is quite litterally pennies to make and essentially going to be litigation-free (after all, it is recommended by the American Congreess of OB/GYN). However, Ther-Rx was near bankruptcy last year (note to March of Dimes, look into a company’s financial history before you start dating).  I suspect Ther-Rx will drop the price to $1000 a shot. Still egregious, but they can claim 33% is a significant reduction.     

The thing is, compounding pharmacies are still making the drug at a fraction of Makena’s cost (I have heard from many moms who are still getting their 17OP this way).  Because Ther-Rx does not have a patent on Makena, Ther-Rx cannot legally go after any compounding pharmacies. That is the purview of the FDA. And remember, the FDA serves under the direction of the government at the leisure of the people (or so I’d like to think, although, then again I believe in things like love at first sight and the inherent decency of mankind).

Getting key members of the House of Representatives on board is crucial. Personally, I don’t think the FDA will go after compounding pharamcies (detailed in this earlier post), and if the pregnant mothers of America have a few heavy hitters on their team, the chance of the FDA wading into this quagmire should drop even more.

This issue affects us all, whether you are trying to have another baby and desperately trying to not deliver prematurely this time around, a  concerned health care professional, or a taxpayer pissed off about the fact that Ther-Rx is going to line their pockets to a tune of $4.2 billion/yr on the backs of research funded by the NIH.

Tell your Representatives and Senators to get involved. Tell them this kind of extortion is unacceptable. Make it sticky issue, so the FDA decides to turn the other cheek. 

 ——————————————————————————————————–

Letter from Rep. Waxman et. al. to Greg Divis, CEO (Chief Extortion Officer), of Ther-Rx

Click here for full post on the subject on the web site of The Committee on Energy and Commerce 

March 24, 2011 

Mr. Gregory J. Divis
President
Ther-Rx Corporation
Chief Executive Officer
KV Pharmaceutical Company
Corporate Headquarters
One Corporate Woods Drive
Bridgeton, MO 63044

Dear Mr. Divis: 

            We are writing regarding reports of high prices that Ther-Rx Corporation[1] is charging for Makena, a drug recently approved by FDA to reduce the risk of preterm birth in women with a history of spontaneous preterm birth.  News reports indicate that the company will be charging as much as $1,500 per dose, a total cost of as much as $30,000 for women who must take the drug over the course of a pregnancy.[2]

            The high cost of this drug is particularly disturbing because it is not a new drug.  The drug – a synthetic form of the drug progesterone – was originally approved by FDA decades ago, then later withdrawn because of lack of sales.  Prior to Ther-Rx’s marketing an FDA-approved version of Makena, the drug was available from compounding pharmacists for an estimated $20.00 per dose – less than 2% of the price charged by Ther-Rx.  Experts have indicated that Ther-Rx could realize as much as $4.2 billion annually in revenues as a result of its new pricing policy.[3]  Moreover, because Ther-Rx has received an orphan drug designation for Makena, your company will be able to forestall generic competition, maintaining your exclusivity and control of prices for seven years, and potentially beyond, depending on the status of any patents protecting the product.

            Ther-Rx did not invent this drug, or the use of the drug to prevent premature births.  But this has not stopped your company from charging extremely high prices.  The pharmaceutical industry has traditionally justified its high prices by claiming that such prices are necessary to allow companies to recoup their research costs.[4]  In this case, however, Makena was approved under the  “505(b)(2)” pathway, which permits an applicant to rely on studies not conducted by or for the applicant and for which the applicant has not obtained a right of reference.[5]  The two studies cited on the FDA-approved label for Makena appear to be funded by public dollars through the National Institutes of Health (NIH).[6]  In addition, Ther-Rx has apparently set its price at the maximum level at which health care plans will still be “motivated to provide coverage” of the drug.[7]  It appears that the price of this drug is not being set on the basis of the cost to produce or research the drug, but at the maximum level that providers are willing to pay.

            There are undoubtedly important advantages to Ther-Rx’s sale of an FDA-approved version of this drug.  But we are concerned about the impact of the high prices for Makena on private insurers as well as Medicare, Medicaid, and other public programs, and we question whether these high prices are justified.  In order for us to evaluate these issues, we ask that you provide us with the following information:

  1. Any fiscal or other contributions made by Ther-Rx to the two NIH studies cited on Makena’s FDA-approved label.6  
  2. Any additional research costs to date incurred by, or studies conducted by Ther-Rx in obtaining FDA approval for Makena, and the expected costs of ongoing research.  Please include all registry numbers listed under www.clinicaltrials.gov for any clinical trials that formed the basis for approval, and for any such trial that was published in a peer-reviewed publication, a copy of the publication.  Please ensure such information includes the five postmarketing requirements as per FDA’s approval letter.[8]
  3. Any research or data on the bioequivalence of Makena to the compounded versions or previously FDA-approved versions of the drug.
  4. Ther-Rx’s promotional expenditures on Makena, and details on how these funds were spent.  Please include information on promotional expenditures to date, and anticipated future expenses.
  5. Ther-Rx’s total cost, and estimated unit costs, to manufacture Makena, and the components of such costs.
  6. Ther-Rx’s expected revenues and profits from sales of Makena.
  7. Ther-Rx’s anticipated revenues and profits from sales of Makena to Medicare, Medicaid, and other federal or state health care programs.

            We ask that you provide us this information no later than April 1, 2011.  Please contact Brian Cohen of the Committee staff or Tiffany Guarascio of Rep. Pallone’s staff if you have any questions about this request.

                                                            Sincerely,

Henry A. Waxman
Ranking Member
Frank Pallone, Jr.
Ranking Member
Subcommittee on Health
Diana DeGette
Ranking Member
Subcommittee on Oversight and Investigations
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6 Responses to Rep. Henry Waxman demands answers from Ther-Rx about Makena

  1. PAS says:

    Beautiful.

    A bit of background here. Waxman, the ranking signature on this letter, is a figure of some importance here. Effectively, Waxman wrote the Orphan Drug Act of ’83 – the law that KV is abusing to create is monopoly and pricing here. The companion law to it, the Hatch-Waxman act of 1984 is one of the most pivotal pieces of drug regulation in the last three decades. It is, obviously, named after him. More than anyone else, this man can claim some credit for bringing nearly every generic drug of the last thirty years to market.

    This is not the sort of attention KV wants. Bad enough to get an inquiry from Congress but it’s signed by a guy who has effectively reshaped drug regulation. I also agree that it’s just this sort of attention that’s going to discourage the FDA from messing with compounding – as if they didn’t have enough already.

    Allow me to predict the answers to the questions:

    1. Nothing.

    2. Trivial, and BS in light of what the NIH has spent and in the context of what your average orphan drug costs to develop.

    3. I very much doubt this data exists. If it exists, it’s very unlikely to show any sort of credible advantage to Makena.

    4. Probably somewhat substantial. Likely more than the answer to question 2.

    5. Tiny. KV may try to inflate this.

    6. Hahahahahahahahahhah!

    7. The costs to Medicare, CHIP and several other specialty programs are likely to be nonexistent to negligible. For the most part, these programs don’t cater to women of childbearing years. An exception would be for Dual Eligible Medicare/Medicaid beneficiaries – this could end up costing Medicare a good bit, as it is bound by the same 1927(k)(2) regulation as Medicaid.

    Medicaid… Well I’ve commented before on how big a concern prematurity is in this sector. In drug costs, multiple tens of millions of dollars per year for a large state program. It’s literally on a par with the costs of treating schizophrenia. Due to 1927(k)(2) above, Medicaid currently is in a no win situation when it comes to Makena. All but the angriest and most conservative programs will knuckle under and get brutalized by the price tag.

    This letter is rather brilliant. It more or less hits every angle of the legal and regulatory aspects of the Makena issue. They’ve stuck KV under the microscope and are focusing precisely on what we’re all so upset about.

  2. Pingback: Sunday News Round-Up « Women's Health News

  3. Please share with me, Oh articulate sages (physicians and nonphysicians), what YOU are doing about the KVP/Ther-Rx’s Makena travesty… I am impressed and greatly appreciate the large amount of useful information about the issue presented on various blogs, including this one. I don’t hear much about ACTION taken, though. I will share what we are doing here in Oklahoma later if there is interest.

  4. Pingback: Objections Build to Price Hike for Makena, Drug to Prevent Preterm Birth | Our Bodies Our Blog

  5. FDA STATEMENT

    For Immediate Release: March 30, 2011
    Media Inquiries: Beth Martino, 301.796.7603, beth.martino@fda.hhs.gov
    Consumer Inquiries: 888-INFO-FDA

    FDA Statement on Makena

    On February 3, 2011, the U.S. Food and Drug Administration approved the drug Makena (hydroxyprogesterone caproate) for the reduction of the risk of certain preterm births in women who have had at least one prior preterm birth. KV Pharmaceuticals, the drug’s owner, 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. It also obtained seven years of exclusivity under the Orphan Drug Act, obtained approval under FDA’s accelerated approval program, and received expedited review.

    For many years, a version of the active ingredient of Makena, which is a synthetic progestin, has been available to patients whose physicians requested the drug from a pharmacist who compounded the drug. Generally, FDA has exercised enforcement discretion with respect to most products made through traditional pharmacy compounding. This has included products made from the active ingredient in Makena, hydroxyprogesterone caproate.

    Because Makena is a sterile injectable, where there is a risk of contamination, greater assurance of safety is provided by an approved product. However, under certain conditions, a licensed pharmacist may compound a drug product using ingredients that are components of FDA approved drugs if the compounding is for an identified individual patient based on a valid prescription for a compounded product that is necessary for that patient. FDA prioritizes enforcement actions related to compounded drugs using a risk-based approach, giving the highest enforcement priority to pharmacies that compound products that are causing harm or that amount to health fraud.

    FDA understands that the manufacturer of Makena, KV Pharmaceuticals, has sent letters to pharmacists indicating that FDA will no longer exercise enforcement discretion with regard to compounded versions of Makena. This is not correct.

    In order to support access to this important drug, at this time and under this unique situation, FDA does not intend to take enforcement action against pharmacies that compound hydroxyprogesterone caproate based on a valid prescription for an individually identified patient unless the compounded products are unsafe, of substandard quality, or are not being compounded in accordance with appropriate standards for compounding sterile products. As always, FDA may at any time revisit a decision to exercise enforcement discretion.

  6. SERIOUSLY? I don’t think so!

    Ther-Rx Corporation Takes Action to Further Ensure High-Risk Women
    Are Able to Access FDA-Approved Makena™

    Announces Reduction in Price and Expansion of Patient Assistance Program for Makena™

    St. Louis, April 1, 2011 – As part of its ongoing efforts to ensure that high-risk women have access to FDA-approved Makena instead of unapproved, unregulated compounded drugs, Ther-Rx Corporation, a subsidiary of K-V Pharmaceutical Company (NYSE: KVa/KVb) (the “Company”), announced today important initiatives to reduce the cost of Makena™ (hydroxyprogesterone caproate injection) and encourage stakeholders to provide timely access to this important FDA-approved medication. Effective immediately, Ther-Rx has:

    Reduced the list price of Makena by nearly 55 percent, to $690 per injection;
    Will offer supplemental rebates that, in conjunction with the list price reduction and the standard Medicaid rebate of 23.1 percent, will result in a substantially reduced cost per injection for state Medicaid agencies compared to list price. This will help ensure that every woman who is prescribed Makena – regardless of her ability to pay – has the comfort of knowing a medication that has been rigorously reviewed by FDA for safety and efficacy is available to her;
    Capped the costs for a full course of therapy to a maximum of three vials (15 injections) for contracted health insurance plans and state Medicaid agencies; and
    Expanded the Company’s patient assistance program for patients who are prescribed this important medication by removing income caps to qualify for financial assistance. 85 percent of patients will pay $20 or less per injection for FDA-approved Makena, and patients whose financial need is greatest would receive FDA-approved Makena at no out-of-pocket cost.
    Under the new pricing structure, the Company believes that the use of Makena by eligible patients will deliver net cost savings to Medicaid programs and private insurance plans in year one, based on third-party economic modeling of costs associated with the condition.

    “Ensuring access to an FDA-approved sterile, injectable medication, manufactured under mandatory strict quality controls, is in the best interests of all high-risk women,” said Greg Divis, Chief Executive Officer, K-V Pharmaceutical Company and President, Ther-Rx Corporation. “We understand the concerns that key stakeholders raised under our original pricing structure. We also recognize the current budget challenges facing state Medicaid programs and other payers. In conjunction with our substantial reduction in price, it is our sincere hope that all committed stakeholders will take appropriate action to provide timely access to this important FDA-approved medication.”

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