KV blinks, but Makena pricing tactic common

Feeling the pushback from patients, doctors and Congress over the aggressive pricing of the recently approved Makena--a hormone injection used to prevent premature births--KV Pharma says in an SEC filing that the outcry may give pause to the payers who must accept the $1,500-per-injection cost.

Last week's KV announcement of the cost prompted a quick request from Sen. Sherrod Brown of Ohio for the drugmaker to "immediately reconsider" the pricing, a 150-fold increase over an unapproved version. He then asked the FTC to investigate.

KV has defended the pricing, citing the cost of clinical trials and other development steps in getting the treatment approved. The drugmaker also points out that the cost of treating premature babies is high.

That's likely what the FTC will hear from other manufacturers of high-cost drugs, if the regulator approaches industry. And high prices are not just a new-drug issue. Bloomberg reports that multiple sclerosis treatment prices have risen nearly 40 percent since last year--even as competition has increased.

Teva Pharmaceuticals, for example, boosted the price of its MS drug Copaxone 9.9 percent in January 2010, 9.9 percent last May, and 14.9 percent in January. "Copaxone is competitively priced relative to other MS therapies," the company says. "The current price reflects the product's value."

Other drugmakers, including Novartis, say they set prices based on R&D costs and other factors, says the Wall Street Journal. And for some drugs, those costs continue long after approval. Bristol-Myers Squibb and Sanofi-Aventis sponsored a trial last year for the clot-buster Plavix, which loses patent protection next year. The drug's price rose 13 percent in 2010.

Barclays Capital analyst Lawrence Marsh, analyzing list-price data, finds that 65 of the top-selling drugs have had price increases averaging 8.6 percent in the first two months of this year. He says the trend shows prices will keep climbing.

- here's the story
- see Brown's letter to the FTC
- get the Bloomberg report
- check out the WSJ story (sub req)