Maternity Advocates Challenge High Cost of Preterm Birth Drug

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.

Docs Outraged at Price Hike

"I hope I deliver before the new price kicks in," says Devika Ross, 36, who has been taking the nonbranded form of the shot, called 17-hydroxyprogesterone caproate, for the past 11 weeks. Her first child was born about three months premature and after a combined 232 days in the neonatal intensive care unit, died from pulmonary hypertension.

When Ross became pregnant again this past fall, she was at high risk of another preterm pregnancy and was placed on the progesterone shots 16 weeks into her pregnancy. She is now almost a month further along than she was when her first child was born, and she has a good chance of delivering full-term.

"My insurance pays for the [nonbranded] shots, but I don't know if they would cover it if it cost $1,500 a shot. That doesn't seem fair, especially because not everyone has insurance," she says.

Beatrice Diaz, of Chapel Hill, North Carolina also relied on the shots for two of her pregnancies. Her first child, Garrison, was born three months early. He survived, but is permanently disabled. Diaz told ABC News, "Once I had my son, we questioned whether or not we wanted to have more children." But she says, with the help of the weekly injections, she carried two daughters full term. One is now three, the other 19 months old.

Diaz said if the drug had been $1500 a shot, "I think the price would have definitely locked me out, which means I could have potentially had a second or third premature child with disabilities." She added, "I would say to the pharmaceutical company, if there is any way they can cut the cost. I would ask them to consider these are lives at stake. "

Hydroxyprogesterone caproate injections have been around since 1956, and were commercially available up until 1999 when Squibb, the pharmaceutical company making them, withdrew the product from the market. In the past few years however, studies have shown that these injections had a positive effect in preventing pre-term birth among women who had previously had a spontaneous pre-term birth in the past. Since then, doctors have been able to fill prescriptions for the synthetic progesterone using compounding pharmacies at a price of $10 to $15 per injection.

Most health insurances did not cover these shots as they were not FDA approved, but given the low price of progesterone, women were able to pay out of pocket for the treatment, says Moritz.

It wasn't always easy to find places that made the medication, however, says Dr. Michael Lindsay, division director of Maternal-Fetal Medicine at Emory University School of Medicine, so "we were excited at first to hear it be FDA-approved."

"My mind-set was that now everyone could get it, but no one is going to be able to afford that," he says.

Many doctors are particularly frustrated with the price hike because to date, KV Pharmaceuticals has not had to bear the cost of the clinical trials used to get the drug approved, but they have announced plans to conduct further trials in the future.

"All the upfront development of the drug was done by the National Institute of Health. You and I paid for that with our tax dollars, it's not like this pharmaceutical company is trying to recoup its investments in research and development, as is usually the reason for the price of new drugs," says Dr. Kevin Ault, associate professor of gynecology and obstetrics at Emory University School of Medicine.

"And at $1,500 a shot ... to put it in perspective: If I were your obstetrician, and you had a normal delivery, including about eight office visits, I would be paid $2,500 in total for that. It's hard for me to believe that we're going to tack on 10 times that amount just for one treatment," he says.

Is Financial Assistance for Low-Income Households Enough?

Dr. M. Kathryn Menard, the Director of Maternal Fetal Medicine at the University of North Carolina School of Medicine, has been working for several years to expand the use of Hydroxyprogesterone caproate for high-risk pregnant women in North Carolina. The drug's importance, she says, cannot be understated. "This is the only evidenced based approach we have, medication we have to prevent pre-term birth."

Menard said, like others in the field, she had supported efforts to win FDA approval for the drug, believing it "would make it easier for our patients to get the drug." Now, she says, she is outraged. "This financial barrier, we see it as insurmountable."

After weeks of public opposition to KV pharmaceutical's pricing of Makena the March of Dimes, American College of Obstetrics and Gynecology, the American Academy of Pediatrics and the Society for Maternal Fetal Medicine will meet today with the company to urge them to reconsider their pricing.

KV Pharmaceutical's response to the price controversy has been to announce a Comprehensive Patient Assistance Program for Makena in which households, both insured and uninsured, making less than $100,000 a year will be subsidized.

In a statement to ABC News, drugmakers KV Pharmaceuticals and partner company Ther-Rx, write: "We are committed to taking the appropriate steps to help ensure that all clinically-eligible patients have access to Makena."

This translates into providing the drug for free to households making less than $60,000 annually who "apply for and are eligible for patient assistance." Those making $60,000 to $100,000 will be able to obtain it "at a cost that is comparable to the average copay assigned by commercial insurance," and those who are insured and make less than $100,000 will have a copay of $20 or less guaranteed to them, according to a company statement.

This contingency plan raises concerns for doctors, however. Those households making more than $100,000 a year cannot necessarily afford to devote as much as a third of their income to pay for Makena if their insurance does not cover the procedure, says Lindsay.

In addition, those receiving financial assistance will need to go through an approval process that may delay treatment, which could result in preterm birth for many patients, Moritz says.

ABC News' Lisa Stark contributed on this report