(Updates with statement from K-V in the seventh through ninth
paragraphs. Adds new stock quote in the fifth paragraph.)
Shares of K-V Pharmaceutical Co. (KVA, KVB) dropped after the
Food and Drug Administration said it won't take action against
pharmacies that create a cheaper alternative for a K-V treatment
that prevents preterm labor in pregnant women.
Specifically, the FDA refuted a letter K-V sent to pharmacists
warning the agency would take enforcement action against pharmacies
that use a compound based on a valid prescription for a
patient.
The news comes after two U.S. senators earlier this month
requested the Federal Trade Commission investigate anticompetitive
behavior after the treatment, which obtained seven years of
exclusivity under the Orphan Drug Act last month, saw a dramatic
cost increase.
The FDA said it only takes such actions if the products are
unsafe, of substandard quality or are not being compounded
according to appropriate standards.
K-V's shares slid 33% to $4.75 in recent trading on
Wednesday.
The drug, commonly known as Makena, is a weekly injection of
progesterone. K-V was given orphan status for Makena last month,
and the cost has risen to $1,500 per injection--much higher than
the cost of the treatment that had been given by U.S. pharmacies at
a cost of $10 to $20 per injection. Orphan status in the U.S.
typically brings U.S. market exclusivity for an extended period and
other incentives if the treatment is approved.
Later Wednesday, K-V said it is "committed to ensuring that this
significant, FDA-approved medication is covered at an affordable
cost and accessible to all women who are prescribed Makena." K-V
said it is finalizing solutions to the concerns and will announce
those moves by the end of the week.
K-V said to allow broader access, the company activated a
patient financial assistance program to help reduce out-of-pocket
costs for qualified patients. It said the level of assistance has
already exceeded many federal program guidelines for health-care
subsidies.
In defending Makena, K-V said it believes the FDA-approved
treatment is "in the best interest of patients," adding the
manufacturing process is tightly controlled to ensure quality and
consistency.
-By John Kell, Dow Jones Newswires; 212-416-2480;
john.kell@dowjones.com