Makena, KV Pharmaceuticals version of 17 alpha-hydroxyprogesterone caproate or 17OP (for prevention of preterm labor) is priced at $1500 a shot (up from $10 a shot prior to the meddling of the FDA). Considering most women who are eligible will receive 20 shots in their pregnancy, the price hike adds an additional $29,800 price tag to each treated pregnancy. An editorial in the New England Journal of Medicine estimates 136,000 pregnant women will receive the drug adding more than $3.5 billion to the cost of prenatal care. Yes, you read that correctly, $3.5 billion.
And over $1 billion of that money will come from taxpayers, because more than 1/3 of maternity care in this country is funded by Medicaid. While Medicaid is technically a state program, it is funded by both state and federal dollars, which is where things can get sticky. How the federal money is spent is up to the feds. For example, federal funds can’t be used to fund abortions, so in states where abortion services are covered by Medicaid, the state pays out of its own Medicaid budget. There are more federal than state dollars, so states often use creative loophole jumping to shift funding from the smaller state to the larger federal pool (it’s a shame that health care decisions can’t just be based on, you know, sound medical facts and good old common sense).
Until a rather obscure Medicaid law was clarified in July of 2010, 17OP for pregnant women with Medicaid was filled at a compounded pharmacy and paid for out of federal funds. At $200 a pregnancy it was a sound investment for taxpayers. Every $1 spend on 17OP made in a compounding pharmacy saved $8-12 in costs related to the care of premature babies.
However, 17OP isn’t really a pharmaceutical. It is actually a “bulk powder” (because it is not made by Big Pharma, but is a raw hormone that is purchased as a powder and then compounded by a pharmacist into an injection). However, for some reason in 2010, which I am sure had NOTHING TO DO WITH BIG PHARMA LOBBYING (because the FDA is as pure as the driven snow), this particular Medicaid regulation was reviewed. Lo and behold, the feds now don’t think they should pay for something that is a bulk powder. So, as of January 2011, the State Medicaid dollars have been picking up the tab for 17OP.
However, now that 17OP is available as a real honest to goodness pharmaceutical (meaning it comes off a conveyor belt instead of mixed up one injection at a time), the feds will go back to picking up the tab. Except now the price tag is $30,000. So what do you think a state Medicaid office running on fumes will do? Pay $200 out of their own coffers for compounded 17OP (which will probably still be available, watch this space for more on that), or wash their hands of the whole mess and allow the federal government to pick up the far more expensive tab? And with the Makena model, now we need to spend $8-12 to save $1 in prematurity.
Now KV Pharmaceuticals is quick to say they will have an assistance program. Assistance my ass. That is only a smoke and mirrors PR move. Assistance programs have strict financial eligibility and they are typically not for women who have insurance (Medicaid counts). So, for Makena tab for 45,000 or so pregnancies every year will go to the federal government. Meaning, you and I are funding the bonuses and tasty corporate lunches for our good, caring friends at KV Pharmaceuticals to a tune of more than $1 billion.
And The March of Dimes and every professional society who supported KV Pharmaceuticals’ application to the FDA? These are the things you need to think about before playing lap dog to Big Pharma.
Thanks to @PASlave for your insightful comments, couldn’t have written this without your help.