Maternity Advocates Challenge High Cost of Preterm Birth Drug

Cost of shot to prevent premature births goes from $10 to $1,500.

ByABC News
March 10, 2011, 12:13 PM

March 29, 2011— -- The March of Dimes is teaming up with the leading maternity experts to lobby for KV Pharmaceuticals to reconsider its decision to boost the price of a drug that prevents premature birth from $10 a shot to $1,500 a shot.

The drug company gained exclusive rights to produce a progesterone shot used to prevent premature births in high-risk mothers from the Food and Drug Administration in February, and soon after announced that they would list the drug at a price 150 times higher than the cost of the non-branded version women have been using for years. The shot has been available in unregulated form from specialty compounding pharmacies for years for $10 a pop for years, but now, marketed as Makena, the drug will cost $1,500 per dose -- an estimated $30,000 in total per pregnancy.

The pricing tactic has outraged doctors, patients, and leading maternity advocates, and several organizations and public officials have sent letters to KV Pharmaceuticals urging them to amend their business plan. The March of Dimes, American College of Obstetrics and Gynecology, the American Academy of Pediatrics and the Society for Maternal Fetal Medicine will meet March 29 with the company to urge KV to reconsider their pricing.

"Progesterone is so cheap to make and we never had a problem with the compounding pharmacies making it. There's probably some variation between pharmacies, which nobody likes, but nobody likes $1,500 a shot either. That seems like highway robbery," says Dr. Jacques Moritz, director of gynecology at St. Luke's-Roosevelt Hospital in New York.

KV Pharmaceuticals plans to offer financial assistance to low-come households in need of the drug, but how private health insurance companies and Medicaid will respond to this price spike remains to be seen. Many doctors fear that access to this treatment will become severely limited or interrupted for those currently mid-treatment.

Doctors also fear the financial burden this new pricing will place on the healthcare system as a whole. In a March 16 article on the issue in the New England Journal of Medicine, Dr. Joanne Armstrong, a Texas-based obstetrician, wrote:

"[N]o program providing short-term financial assistance to some patients will mitigate the harm that this new cost will cause to publicly funded programs, including Medicaid, and the women who rely on them. Nor will it mitigate the cost to employers and individuals who purchase insurance coverage and therefore directly bear all increases in health care costs."

Armstrong estimated that preventing premature births with the old, non-branded version of the drug cost approximately $41.7 million a year, saving $519 million in medical costs that would have been incurred by caring for the pre-term babies. With Makena, the price of preventing the same amount of premature birth skyrockets to $4 billion annually.

KV Pharmaceuticals has been citing FDA law in saying that doctors will be legally obligated to stop using the cheaper version of this drug, but an FDA spokesperson informed ABC News on Tuesday that this will not be the case for Makena. The agency says it intends to "preserve the status quo that existed before Makena's approval with regard to compounding of this drug," the FDA representative said. What effect this loophole will have on Makena's price remains to be seen.