Outrage is growing in the USA at KV Pharmaceutical Co's pricing of its newly-approved premature birth drug Makena despite the company announcing a 55% reduction.

In February, the US Food and Drug Administration granted approval for Makena (hydroxyprogesterone caproate) injection to reduce the risk of premature delivery before 37 weeks of pregnancy in women with a history of at least one spontaneous preterm birth. The company then planned to charge $1,500 per dose, although a compound generic version has been available through compounding pharmacies for many years for just $10-$20.

The approval meant that KV was granted seven years' marketing exclusivity for Makena under the Orphan Drug Act and the company sent letters to pharmacies that compound hydroxyprogesterone that they should desist or face the wrath of the FDA.

Admonished by FDA

Typically, once a drug is approved by the agency, pharmacy compounding is no longer allowed but last week the FDA took the unusual step of stating that the information in the KV letter "is not correct" and "in order to support access to this important drug, at this time and under this unique situation, it does not intend to take enforcement action against pharmacies that compound hydroxyprogesterone caproate".

The FDA has no power to set prices but it implied that KV may be pushing its luck, given its minimal R&D investment (some $60 million) on the drug. It noted that KV "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".

Now KV's Ther-Rx Corp subsidiary has reduced the price of Makena by nearly 55% to $690 per injection. The firm says it will also offer supplemental rebates that, in conjunction with the aforementioned cut "and the standard Medicaid rebate of 23.1%, will result in a substantially-reduced cost per injection.

Through various measures, KV now says 85% of patients will pay $20 or less. Chief executive Greg Divis said "we understand the concerns that key stakeholders raised under our original pricing structure" and "the current budget challenges facing state Medicaid programmes and other payers".  He added that along 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".

Price cut 'woefully inadequate'

However the response to the price cut has not been particularly enthusiastic. The American College of Obstetricians and Gynecologists says KV's declaration is "clearly acknowledging the negative impact of their original pricing strategy". It adds that "although this may seem like a relatively significant price reduction, unfortunately it remains a woefully inadequate response".

The ACOG concludes by saying that the US healthcare system "simply cannot be expected to absorb the cost of Makena at its current prohibitive price without significant negative repercussions".