Brown Leads Effort to Demand Federal Investigation Into Price Gouging of Pre-Term Labor Drug for Expectant Mothers
Brown, Joined by Sen. Klobuchar, Urges the Federal Trade Commission to Examine Drastic Prenatal Drug Cost Increase
March 17, 2011
WASHINGTON, D.C. - U.S. Sen. Sherrod Brown (D-OH) and U.S. Sen. Amy Klobuchar (D-MN) today sent a letter to Federal Trade Commission Chairman Jon Leibowitz urging a federal investigation into the expected efforts of KV Pharmaceutical to monopolize a pre-term labor prevention drug for pregnant women. The move follows a letter sent last week by Brown to KV Pharmaceutical Company CEO Greg Divis urging reconsideration of the reported massive price increase.
"KV created an overnight monopoly for this lifesaving drug - and then proposed raising the price by 14,900 percent," Brown said. "Since KV Pharmaceuticals announced the intended price hike, I called on KV Pharmaceuticals to immediately reconsider their decision, but to this date the company continues to defend this astronomical price increase. Price-gouging is never acceptable, particularly not when it undermines public health and fleeces taxpayers. Parents-to-be deserve an investigation."
At a Senate Appropriations Hearing on Thursday, Brown grilled Food and Drug Administration (FDA) Commissioner Margaret Hamburg on the outrageous price increases of a drug to prevent preterm pregnancy. Last week, Brown sent a letter to the CEO of KV Pharmaceuticals - a company which gained exclusive rights to sell an already existing drug that prevents premature labor - and then increased prices per dose from $10 to $1,500, a 14,900 percent price increase. This week, he's sent a letter requesting a price-gouging investigation of KV's practices by the Federal Trade Commission (FTC).
The drug for high-risk pregnant women, which KV Pharmaceutical plans to sell under the brand name Makena, has been produced by compounding pharmacies for years and typically costs between $10-20. Last month, KV Pharmaceutical became the first company to receive FDA approval to sell the product and plans to raise the cost to $1,500 per dosage.
Taxpayer dollars actually helped finance the research and development of this product. Tax dollars funded the first clinical trial in 2003 through the National Institute of Child Health and Human Development (NICHD) at the National Institutes of Health (NIH), as well as subsequent trials in the years following.
This price increase could lead to fewer women being able to afford the drug, increasing our nation's already too-high preterm birth rate of 13 percent. Higher costs mean that health insurance companies could either stop coverage of the treatment or impose higher premiums on consumers and already stretched state Medicaid programs would be forced to deal with the financial repercussions of the company's decision.
Last week, Brown sent a letter to KV Pharmaceutical Company's CEO calling on the company to maintain access of the critical drug and stem an increase in premature births.
Full text of the letter to the FTC is below.
March 17, 2011
The Honorable Jon Leibowitz
U.S. Federal Trade Commission
600 Pennsylvania Ave. N.W.
Washington, D.C. 20580
I am writing to request that the Federal Trade Commission initiate a formal investigation into any potential anticompetitive conduct arising out of KV Pharmaceutical's actions regarding a dramatic 150-fold increase in price that the company has applied to a proven progesterone treatment.
17-hydroxyprogesterone caproate, sold by KV Pharmaceutical under the name Makena, is a weekly injection of a form of progesterone meant to prevent preterm labor in high-risk pregnant women. This drug, which first came to market over 50 years ago, has recently been used to help prevent early births to women who had a history of spontaneous preterm deliveries. Prior to KV Pharmaceutical's actions, this product was mixed by compound pharmacies and administered safely for $10 to $20 per injection. Due to the product being given orphan drug status, KV Pharmaceutical has potentially created an anticompetitive market and has indicated they will dramatically increase the cost per injection to $1,500.
While I understand the Food and Drug Administration (FDA) is working to ensure that drugs marketed and sold in the United States are safe and effective, I am concerned that KV Pharmaceutical is taking advantage of FDA's approval of Makena and orphan drug determination to achieve rights as the sole source for this limited use of progesterone, leading to a monopolization of treatments to address preterm labors.
I appreciate KV Pharmaceutical's attempt to provide financial assistance to help purchase Makena. However, the financial assistance is not sufficient and does not extend to certain groups of women. In additional to significant costs to individuals, this price increase will place a heavy burden on state Medicaid programs, which cover a majority of high-risk pregnancies. I am extremely concerned that KV Pharmaceutical's actions will result in diminished access to appropriate health care for women and result in increased preterm births.
Thank you for your attention to my request.
United States Senator
United States Senator