Manufacturing, pricing problems lead to K-V bankruptcy

Problems that began three years ago with K-V Pharmaceuticals ($KV.A) hiding manufacturing lapses from the FDA have escalated into a Chapter 11 bankruptcy filing by the maker of Makena, a drug to prevent premature birth. The St. Louis company lays the blame for its need to restructure at the feet of the FDA, which it sued for not enforcing "the orphan drug marketing exclusivity granted to K-V for Makena. That has kept some state Medicaid agencies from buying the drug despite those states' legal obligation to cover FDA-approved drugs," it says in a release. The FDA approved K-V to make the drug last year, and the company charges $695 a dose. But the agency has not kept compounders from continuing to offer their versions, for which they charge $10 to $20 a dose. K-V's financial difficulties actually track back to 2009 when the FDA came down on the company like a load of bricks after the agency discovered it had for years been hiding manufacturing and safety issues. The FDA seized its drugs, halted its manufacturing and fined it $25.8 million. K-V's former CEO was sent to jail and the company is facing a $1.5 billion lawsuit claiming that it hid problems from shareholders as well. Story | More

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