K-V Pharmaceutical Co. (KVA, KVB) slashed the list price of a
drug to help prevent preterm births, following the Food and Drug
Administration's denial it will take action against pharmacies that
make a much cheaper alternative.
Class A shares fell 5.2% to $5.68 in recent trading and are off
37% this week.
On Wednesday, the FDA rebutted a letter K-V had sent to
pharmacists warning the agency would take enforcement action
against them if they made or compounded the active ingredient in
Makena, a drug the company makes that was approved in February.
Prior to the drug's approval, a similar product was made by
pharmacists for between $10 and $15 a dose.
K-V's Ther-Rx unit, which makes Makena, said Friday it would cut
the drug's list price by 55% to $690 per injection and offer
supplemental rebates. It capped the costs for a full course of
therapy to a maximum of 15 injections for contracted health
insurance plans and state Medicaid agencies and removed caps to
qualify for financial assistance from the company.
The treatment had faced criticism from lawmakers and doctors
about its price. Legislators had sent the Federal Trade Commission
a letter urging the agency to launch an investigation into
potentially anticompetitive behavior because of the increase in the
cost of Makena compared with compounded products.
Makena was given seven years of market exclusivity when it was
approved under an FDA program that grants incentives to companies
developing treatments for rare ailments.
-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240;
matthew.jarzemsky@dowjones.com
