Trying to avoid a premature death, KV Pharma ($KV.A) is suing states to force them to buy its drug for the prevention of premature births.
Illinois is the latest target for KV, which filed for Chapter 11 bankruptcy protection Aug. 4. The St. Louis-area drugmaker wants the court to require the state Medicaid program to pay KV $530 per dose for a drug for which it only has to pay compounders $20 a dose.
The company started the state-by-state litigation approach after it was unable to force the FDA to ban the use of the cheaper compounded versions, which KV claims lack the ensured safety of its FDA-approved drug. It recently got Georgia to require the state to cover the drug, Crain's Chicago Business reports, and has a suit pending in South Carolina.
The Illinois suit says it is unfair for the state to require pre-approval before women can get its hormone, while not placing the same restriction on the compounded version. The suit questions the safety of the compounded drug, saying the active ingredient in them most often comes from China, Crain's reports.
KV and the FDA have been in a long-running dance over Makena, a hormone that is injected to lower the risk of premature birth in women who have had babies prematurely in the past. Women have traditionally gotten it for $10 to $20 per injection in compounded form, compared to the $1,500 KV initially wanted to charge when the FDA approved its version in February 2011. It dropped the price to $695 after charges that it was price-gouging, but says FDA's refusal to enforce "the orphan drug marketing exclusivity granted to KV for Makena" has kept some state Medicaid agencies from buying the drug.
The company warned in July the FDA stance might lead it to seek bankruptcy protection. KV's financial problems began in 2009 when the FDA came down on the company after discovering KV had for years hidden manufacturing and safety issues. The FDA seized its drugs, halted its manufacturing and fined it $25.8 million. KV'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.
- read the Crain's Chicago story
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