Senators Urge the Federal Trade Commission to Examine Price Gouging of Drug for Pre-Term Labor Drug

Mar 23, 2011   

On March 17, 2011, U.S. Senators Amy Klobuchar (D-MN) and Sherrod Brown (D-OH) wrote to Federal Trade Commission (FTC) Chairman Jon Leibowitz urging the Agency to investigate the potentially anti-competitive behavior of KV Pharmaceutical after the price of a pre-term labor prevention drug for expectant mothers drastically increased. The drug is a weekly injection of progesterone to prevent pre-term labor that has been produced by compounding pharmacies for years and sold at a cost of between $10 and $20 per injection. After KV Pharmaceutical was granted orphan status for its version of the drug, Makena, the cost rose to $1,500 per injection, or a 14,900 percent price increase.

At a Senate Appropriations Hearing on Thursday, Senator Brown grilled U.S. Food and Drug Administration (FDA) Commissioner Margaret Hamburg over the outrageous price increase of this drug. In the letter to the FTC (see full text here), the Senators raise their concern that by gaining FDA approval of Makena and orphan drug determination, KV Pharmaceutical is taking advantage and “leading to a monopolization of treatments to address preterm labor.” The fear is that this monopoly “will result in diminished access to appropriate health care for women and result in increased preterm births.”

Senators Klobuchar and Brown concluded their letter as follows: “In additional to significant costs to individuals, this price increase will place a heavy burden on state Medicaid programs, which cover a majority of high-risk pregnancies. I am extremely concerned that KV Pharmaceuticals actions will result in diminished access to appropriate health care for women and result in increased preterm births.” Thus, given the fact that tax dollars actually 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) and partially funded subsequent clinical trials, the price increase is particularly troubling.

Fuerst Ittleman will monitor the FTC and FDA review of the allegedly anti-competitive behavior of KV Pharmaceutical. For more information, please contact us at contact@fidjlaw.com.