WASHINGTON, D.C. — Following a major controversy over the price hike of a pre-pregnancy drug aimed at preventing preterm labor, U.S. Sen. Sherrod Brown (D-OH) questioned National Institutes of Health (NIH) Director Francis S. Collins on what the NIH can do to stop manufacturers from turning taxpayer-funded investments into profit-padding and price-gouging. Collins testified today before the a U.S. Senate Appropriations Subcommittee hearing regarding the National Institutes of Health’s (NIH) budget request for Fiscal Year 2012
“Research conducted at the NIH helped lead to a breakthrough drug that has saved the lives of thousands of pre-term babies. But it’s nothing short of outrageous when drug companies exploit the taxpayer-funded research carried out at the NIH to grossly pad their profits,” Brown said. “We must work to ensure that what happened with Makena and KV Pharmaceutical—where a drug company has used taxpayer dollars to price-gouge at-risk pregnant women—will never happen again.”
Until KV Pharmaceutical acquired exclusive rights to manufacture the drug to prevent pre-term labor, also known as 17P, compound pharmacies sold the injection for $10-$20 per dose. KV Pharmaceuticals paid $200 million to acquire exclusive rights to sell the progesterone treatment, relabeled as Makena, for seven years. With FDA approval in hand, KV began sending a cease-and-desist letter to pharmacies to prevent them from selling the drug. In March, KV announced it would sell Makena for $1,500 per dose—an estimated $30,000 per pregnancy.
At 20 weeks of treatment, KV Pharmaceutical’s decision effectively raised the total cost of treatment from $200-$400 to $30,000. Only following weeks of public outrage, spurred by Brown’s actions, did the company agree to reprice the drug from $1,500 per dose to $690 per dose. The company’s repricing decision means a high-risk pregnant woman will still pay more than $10,000 for a full course of treatment.
The company justified this price hike by citing R&D costs, and even implied that the more expensive treatment is still below the costs associated with a premature birth.
KV Pharmaceutical is now pressing the Food and Drug Administration (FDA) to “vigorously support the exclusivity" of its product and has significantly increased its lobbying presence in Washington. According to Inside Health Policy, KV’s recent actions suggest “the company is pushing FDA to reverse its decision to allow pharmacy compounding of a cheaper version of the medication.”
NIH Research, Funded with Taxpayer Dollars, Helped Bring Makena to Market
In wake of KV’s announcement in April, Brown released previously-unreported figures showing the scope of taxpayer investment in the development of pre-term pregnancy drugs. 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. In total, taxpayers have invested nearly $21 million, through research conducted by the National Institutes of Health (NIH), to bring Makena to market.
- An initial trial, showing that the injection prevented preterm births in women who have previously had a preterm birth, cost taxpayers $5 million.
- A second trial, at $1.1 million, showed no side effects in children whose mothers had used the formulation.
- A third trial, costing taxpayers $5.1 million, found that the drug did not work to prevent preterm birth in women carrying twins and triplets; according to the NIH, this study was critical for Makena’s orphan drug status determination because an alternative result could have widened the number of potentially eligible women to use the drug.
- A fourth trial, which is still ongoing, cost $7.5 million through Fiscal Year 2010 and aims to find whether 17P treatments are effective at preventing preterm birth in women with shortened cervixes. This is the largest study of 17P by the NIH, and could create another category of women eligible for Makena.
A Timeline of Congressional Actions
After KV announced that the drug used to prevent pregnant women from delivering premature babies would increase from $10 per dose to $1,500 per dose, Brown was the first Member of Congress to take action—sending a letter to the CEO of KV Pharmaceuticals on March 10 urging the company to reverse course on the price hike. A week later, on March 17, he sent a letter requesting an antitrust investigation of KV’s practices by the Federal Trade Commission (FTC). On March 25, Brown called for a federal investigation on the effect of the price hike on taxpayers and the Medicaid program.
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.