KV bargaining with states on price of Makena

KV Pharmaceuticals ($KV.A), which this month took up the shield of Chapter 11 bankruptcy protection, has apparently decided it can live with a much lower price for Makena than the $1,500 it first priced the hormone at, or even the $530 it now reports as the retail price.

The St. Louis-area drugmaker recently filed suit against Illinois to try to pressure the state Medicaid program to start paying unreservedly for Makena. The hormone 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 with the $1,500 KV initially wanted to charge when the FDA approved its version in February 2011. The company dropped the price under pressure to $695. While the FDA gave it approval, the agency has refused to ban the much cheaper versions from the market, a position that KV said led it to file for bankruptcy protection.

But the drugmaker told Crain's Business Chicago that it has been willing to negotiate a better price with states that say Makena's cost is a burden for their Medicaid budgets.

"Although we have not disclosed specifics of negotiations with any individual state system, over the past 6 months KV has reached agreement on rebates with three states that bring Makena's price well below $300 per injection," Scott Goedeke, senior vice president of KV's marketing arm, told Crain's in a statement.

According to KV's suit, Goedeke a year ago met with Illinois Medicaid officials, including Lisa Arndt, head of the department's bureau of pharmacy services, to complain about the fact that the state would automatically pay for compounded versions but requires pre-approval for KV's FDA-approved form. Arndt responded, "You don't like our policy, we don't like your price."

- read the Crain's story

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