Premature birth-preventing drug faces cost spike

March 9, 2011 11:47 PM

Progesterone caproate injections have been used to reduce the likelihood of premature births in at-risk pregnant women for years. Up until now, the drug was custom-compounded by wholesale and specialist pharmacies, legally, but without federal approval. These injections cost between $5 and $15 a dose and were regularly reimbursed by insurance companies and Medicaid. Last month, the FDA announced their approval of a commercially produced version of the compound, to be marketed under the brand name Makena by a company called KV Pharmaceuticals. No stranger to controversy and trouble, KV barely survived a rash round of layoffs and wrongful termination lawsuits. Their former chief executive now faces criminal charges surrounding the company's failure to notify the FDA that they were producing oversized morphine tablets. (He could also do for a shave, it appears.) Now, KV has announced that the new drug will be available at a cost of $1,500 per dose, bringing the total pregnancy term cost of treatment to $25,000-$30,000, from its former cost of $250-$300, a 100-fold increase—but it gets worse...

The FDA granted Makena ophan drug status, allowing them exclusive rights to produce the compound. As such, KV has sent letters to pharmacies manufacturing the non-commercial compound warning them to stop or face FDA action.

In what can only be characterized as a bit of cognitive dissonance, new KV Pharmaceutical chief Gregory J. Divis Jr "said the cost is justified to avoid the estimated $50,000 cost of mental and physical disabilities that can come with very premature births." "Makena can help offset some of those costs. These moms deserve the opportunity to have the benefits of an FDA-approved Makena."

posted by disillusioned (63 comments total)

A few thoughts:

1) Euthanize the rentiers.

2) The orphan drug act is intended for diseases that affect less than 200,000 people in the US, or for which there is no expectation that a company can make a treatment profitable. 543,000 babies were premature 2006 ALONE, so how the flaming HELL can they claim that there are less than 200,000 people who are at risk?

3) Come to think of it, the treatment was already developed so how is this an appropriate use of the orphan drug act?

3) Was this incompetence or corruption at the FDA?

4) Why is it that pharmaceutical companies seem to be inherently evil?
posted by Grimgrin at 12:07 AM on March 10, 2011 [14 favorites]

4) Why is it that pharmaceutical companies seem to be inherently evil?

Because they behave exactly the way that other businesses do, but their business is sustaining life. No one cares that Apple spends a lot of money on marketing because no-one's ever died from lack of an iPad.
posted by atrazine at 12:11 AM on March 10, 2011 [58 favorites]

If I needed lobbyists I would sure as hell hire whoever managed to get that through.
posted by Felex at 12:22 AM on March 10, 2011

Was this incompetence or corruption at the FDA?

I think, at this point, with nearly every part of the federal government, you can assume 'corruption' is the correct answer. You'll be right more often than not.
posted by Malor at 12:27 AM on March 10, 2011 [5 favorites]

Was this incompetence or corruption at the FDA?

The former is usually strategically placed for maximum effectiveness by the latter.
posted by yeloson at 12:36 AM on March 10, 2011 [5 favorites]

Best healthcare in the world, right?
posted by brokkr at 12:38 AM on March 10, 2011 [2 favorites]

I'm guessing this is eponysterical, because I feel the exact same way.
posted by Nossidge at 12:50 AM on March 10, 2011 [1 favorite]

Example of government helping raise health care costs. Now that the FDA has put its imprimatur on the formula and use of this drug, they have the power to grant a monopoly for its manufacture. Likely this monopoly has higher costs than a compounding pharmacy to ensure the drug is manufactured consistently, and to cover its liability. But by a factor of 100? Why not? Frame it by questioning the lack of rigorous manufacturing standards governing compounding pharmacies. How many folks around here really want less strict government standards over their drugs, especially those for pregnant women? Tradeoffs as always. Wanting high levels of government oversight is not an unreasonable sentiment, yet one unintended consequence is higher health care costs.
posted by 2N2222 at 12:52 AM on March 10, 2011

I don't understand how you can argue that you deserve exclusive rights to a drug you didn't develop. Can you imagine what would happen if somebody tried to do that for aspirin?
posted by londonmark at 12:57 AM on March 10, 2011 [1 favorite]

To be fair to the FDA... (an exercise in patience itself), they ran KV through the ringer for their previous fuckups, so I don't know how much of this is "corruption" in the traditional sense. From the criminal charges link:

KV's wholly owned subsidiary, Ethex Corp., pleaded guilty in March 2010 on two felony counts of criminal fraud for failing to report to the FDA that it was making oversize painkiller tablets that could be dangerous to patients — and drew $27.6 million in fines and restitution.

(Though this makes it up to them, I suppose...)

The sense I get from several of the other articles is that obstetricians and March of Dimes alike were pushing for the passing of this drug so that doctors would feel more comfortable prescribing a consistent, safe form of this drug. They also felt that the distribution would be far more wide and help more people. They were clearly gobsmacked by KV Pharmaceutical's giant "fuck you" pricing announcement, and I think they feel betrayed and frustrated, especially as the orphan status will make it very difficult to procure the existing solution at the existing prices.

How the flaming HELL can they claim that there are less than 200,000 people who are at risk?

I think that they're saying that fewer than 150,000 women will be viable candidates to receive this treatment: it's specifically approved for women who are at-risk and have experienced a premature birth or miscarriage before, if I'm reading things right. That's how they snuck that one in...

I think the worst of this is that orphan status was awarded to a company who has done very poorly lately and come very close to bankruptcy. This ensures they'll gouge as much as possible to make things up for their investors, who, by all accounts doing quite well since the announcement of the new price.

It's all rather disgusting, frankly. I'm shocked the FDA doesn't require a disclosure of the price the company receiving orphan status intends to charge, and that it isn't a factor in the granting of the status... unless they do and it is, in which case, yeah, corruption.
posted by disillusioned at 12:59 AM on March 10, 2011 [3 favorites]

Wanting high levels of government oversight is not an unreasonable sentiment, yet one unintended consequence is higher health care costs.

If the drug had both efficacy and inexpensive preparations before the monopoly was granted, then it seems said consequences were theoretically avoidable, no?
posted by Blazecock Pileon at 1:06 AM on March 10, 2011 [1 favorite]

A similar thing happened with colchicine, a medicine that has been used for literally thousands of years as a treatment for gout. There had never been an FDA-approved study of its safety and efficacy - and it is frankly a nasty drug that can cause symptoms as uncomfortable as gout itself.

Last year the FDA banned the sale of generic colchicine (which cost around nine cents a tablet) and gave marketing exclusivity to URL Pharma, who immediately raised its price to $4.85 per tablet. The deal was that URL Pharma would conduct a study of colchicine - which they did - and in exchange they would be the only ones who could sell it as a gout treatment for three years. Many people with gout are elderly or otherwise sick. I don't know exactly how the numbers work out, but certainly many of them get subsidised medication. So instead of the US government funding a study directly, as would be done in a normal country, they're paying for a big chunk of it via Medicare and the rest by taxing sick people.

I do not understand the USA.
posted by Joe in Australia at 1:23 AM on March 10, 2011 [39 favorites]

If the chemicals aren't on the DEA schedule you can just mail order them from other countries.
posted by delmoi at 1:24 AM on March 10, 2011 [2 favorites]

But yes this is totally insane.

Many people with gout are elderly or otherwise sick. I don't know exactly how the numbers work out, but certainly many of them get subsidised medication. So instead of the US government funding a study directly, as would be done in a normal country, they're paying for a big chunk of it via Medicare and the rest by taxing sick people.

It's the republican version of the "Free Market". You see, the free market is always more efficient. Instead of paying small amounts of money "government beurcrats" it's always better to to launder that money through corporations so that private, well connected people can take a huge chunk for themselves.
posted by delmoi at 1:27 AM on March 10, 2011 [36 favorites]

I don't understand how you can argue that you deserve exclusive rights to a drug you didn't develop. Can you imagine what would happen if somebody tried to do that for aspirin?

Sometimes there are good reasons to do clinical trials with generic drugs that are used anecdotally for a disease, e.g. in order to nail down proper dosages and efficacy. Ideally these studies would be done by the NIH or some governmental body and so would not change the price at all. In the US, we seem to be allergic to the concept of government, so decided that pharma companies should be lured to do these studies with rewards of exclusivity.

Unfortunately, the FDA has no power over pricing and no leeway in the length of the exclusivity. Even if the producer is not ruthless, and just tries to make back the cost of the clinical trial, a 3 year period of exclusivity with a limited patient pool may result in a huge pricetag for a previously cheap generic drug. A better solution would be to lengthen the period of exclusivity but also drop the price to no more than a few percent more than existing generics; the company will make a profit on its investment, but over 20 years rather than rushing to gouge in 3, and the trials would get done to improve knowledge around unpatentable compounds. Multiple patients would pay a premium over years, rather than a few patients getting shafted with a single huge bill if you're unlucky enough to get pregnant during a year of exclusivity. Unfortunately in its current state I wouldn't trust the FDA with any extra powers. If a meteor storm hits DC maybe we could just rely on the Canadian Patented Medicine Pricing Review Board.
posted by benzenedream at 1:37 AM on March 10, 2011 [6 favorites]

Up until now, the drug was custom-compounded by wholesale and specialist pharmacies, legally, but without federal approval.

Hear, hear. What we need is a smaller, limited government. We need to get the government off the backs of the people and put an end to this senseless nanny-state regulation which is killing people.

Or maybe FDA approval has value and this value imposes a cost?
posted by three blind mice at 2:01 AM on March 10, 2011 [1 favorite]

I don't understand how you can argue that you deserve exclusive rights to a drug you didn't develop.
Playing devil's advocate here, developing a drug is only part of the story. You also need to standardise a synthesis/manufacturing process, establish quality monitoring programmes, go through the licensing process and pay hefty insurance premiums in case your new drug kills someone. You also need a monitoring programme to keep an eye on the first x thousdand patients treated, in case of unexpected side-effects.

All of this costs a lot of money so, while the running costs of making a drug like this are quite low, the setup costs can be enormous. This is the point of the "orphan drugs" programmes: giving groups financial or business incentives to develop drugs that are important, but that probably wouldn't recoup the setup costs. The FDA's motivation in this specific case is probably at least influenced by a strong preference for drugs being produced from strictly monitored, licensed facilities that follow "Good Manufacturing Practice" guidelines, making its use safer for patients and easier for doctors. Which a drug company probably will do, while independant dispensaries probably won't.

Please note that I am not arguing that in this specific case the correct decision was made: I'm just trying to clarify what was probably their thought process, which is not quite as mad and evil as the story appears to be at first glance. Of course, their decision could still be wrong, mad and evil despite this.
posted by metaBugs at 2:12 AM on March 10, 2011 [5 favorites]

Or maybe FDA approval has value and this value imposes a cost?

A 100x markup? Two fucking orders of magnitude? I think I'll take my chances with the compounding pharmacies, thanks.
posted by Kadin2048 at 2:13 AM on March 10, 2011 [2 favorites]

Or maybe FDA approval has value and this value imposes a cost?

Value to who? Obviously it's very valuable to the company that pulled this scam. Was it worthwhile for society? If so, wouldn't it make more sense for society to pay for the study directly, rather then forcing the few people who are at risk for a premature birth to bare the cost, if they can afford it? while at the same time causing premature births in children who's parents aren't rich or who's insurance companies decided they didn't feel like paying?
posted by delmoi at 2:22 AM on March 10, 2011 [10 favorites]

Generations to come will look back on this age in America as the second era of Robber Barons.
posted by unSane at 3:31 AM on March 10, 2011 [6 favorites]

If so, wouldn't it make more sense for society to pay for the study directly, rather then forcing the few people who are at risk for a premature birth to bare the cost, if they can afford it? while at the same time causing premature births in children who's parents aren't rich or who's insurance companies decided they didn't feel like paying?

Woa there delmoi, them's fighting words. Are you a radical?
posted by londonmark at 3:45 AM on March 10, 2011 [2 favorites]

I think I'll take my chances with the compounding pharmacies, thanks.

If you wind up with a preemie, you're probably going to be using one of those pharmacies, anyway. My two sure did.

The two who had to use Synagis, another 'only one of its kind' drug. The one that went for $100,000 for ONE dose (no, I'm not joking), until I questioned the bill, and suddenly, the same dose was about $3300 (est.).

Sure wish I could get a 95% discount on other stuff.
posted by ES Mom at 3:48 AM on March 10, 2011 [2 favorites]

I know people who worked at KV in St. Louis. In fact, their facility here was within walking distance of my house. I know a couple people who worked there.

When they were still open, it was comforting to know that if I ever lost my job at that DJ30 Pharma company, I could always get a job at Starbucks.
posted by Kid Charlemagne at 4:33 AM on March 10, 2011 [1 favorite]

Another victory for the power of the free market! Oh...wait...
posted by Thorzdad at 4:42 AM on March 10, 2011

How ... unsurprising. In my own personal experience, I've had to face something similar: Lucentis vs. Avastin
posted by moonbiter at 4:55 AM on March 10, 2011

So instead of the US government funding a study directly...

A couple big (and relative to everything I've ever heard about KV - incredibly competent and slightly more ethical than Jesus Christ*) corporations ago I got to see my corporate masters pour a lot of money into a hole when one guy said our compound was 40x as effective in cell based bioassay as the product it was meant to replace. (Another guy who was politically less powerful within the company but had more bioassay experience and more replicate tests said it was more like 1x.)

After clinical testing well into Phase III, it was decided that the cost of finishing things and getting FDA approval were unlikely to be offset by a drug whose marketing slogan was going to have to be something like, "No worse than brand X!"

If the government was funding studies directly there is no doubt in my mind that there would be an endless stream of bottom feeders making a good living "developing" X - for the treatment of Y, where X was basically isotonic saline and Y was whatever the government would pay for a study on.

IMHO, the government should, instead, take their money and use it to hire more FDA auditors** (I suspect I spend a greater percentage of my time working on my cars than the typical FDA auditor gets to spend on any one drug) and find a way to kick patent trolls right in the crotch.

*Remember, that's relative to what I've heard about KV. On an absolute scale they were probably as competent and ethical as the people running any other big company whose CEO doesn't face criminal charges.
**I'm saying this, and I'm one of the people who is supposed to live in dread of the day the FDA auditor shows up.
posted by Kid Charlemagne at 5:00 AM on March 10, 2011 [4 favorites]

Or maybe FDA approval has value and this value imposes a cost?

Hold up, I think you missed something:

These injections cost between $5 and $15 a dose and were regularly reimbursed by insurance companies and Medicaid.

Sounds to me like it was already approved, in function if not in form. Why was any additional FDA approval even necessary? We've been paying out for this already. Tell you what, how about instead of FDA approval and whatever amazing wonderful magical extra benefit and value that confers, how about we all just go back to the old way of doing things?

I guess my real question, though, is why am I reading about this? Why is this in the news today? Why were people "working" on this big "problem" that apparently nobody realized was a problem until this recent, wonderful announcement that now positively fucks a large group of people?

Work backwards. You don't just announce these sorts of things. It's not like Shelly Burgess of the FDA got up one morning and decided to put this announcement out on the internet. No, somebody gave her this announcement. Because a group of people have already been working on this. Who are those people? They also (presumably) are just doing their job that someone told them to do? Who told them to do this?

When things are working fine one day and the next there's some damned horseshit in the news that you've now got to go fix with protests and letters and hassle, if you just keep working backwards you'll find the inevitable fuckwad that is directly responsible.
posted by Civil_Disobedient at 5:01 AM on March 10, 2011 [2 favorites]

Kid Charlemagne wrote: If the government was funding studies directly there is no doubt in my mind that there would be an endless stream of bottom feeders making a good living "developing" X - for the treatment of Y, where X was basically isotonic saline and Y was whatever the government would pay for a study on.

We're not talking about developing new drugs, which already have protection under patent laws. The problem is orphan drugs that are well out of patent. Your government funded a study on colchicine by giving a company a monopoly on selling it for a few years, plus the ability to raise its price by a factor of 50. Your government will actually be funding most of this rip-off indirectly via Medicare and other government purchasers. I suggest that since your government had to assess the study anyway, why not fund it directly? That way it can get to choose the terms of the study, it can let people buy their medicine at normal prices, and it can avoid the ridiculous market inefficiencies caused by artificial monopolies.
posted by Joe in Australia at 5:17 AM on March 10, 2011 [4 favorites]

Generations to come will look back on this age in America as the second era of Robber Barons.

That's assuming that this time they will ever be forced to relinquish any of their power. They've learned a lot since the 1890s, and new technology gave them more money and more power than Standard Oil ever imagined in it's wildest wildest wet dreams.
posted by T.D. Strange at 5:24 AM on March 10, 2011 [3 favorites]

A few people have mentioned patents in this thread. I think it is important to point out that this has nothing whatsoever to do with patents, which are granted (in theory) only to novel and non-obvious inventions.

In this case, neither the compound nor its use in preventing premature births were novel. The monopoly granted to KV is not a patent granted by the US Patent and Trademark Office for having invented the drug or discovered a new use, but rather a (shorter) monopoly granted by the FDA on the basis of the Orphan Drug Act for going through the hoops of getting FDA approval for this drug and its indication in preventing premature births.

Doctors and pharmacists can prescribe and prepare non-FDA approved drugs (or FDA-approved drugs for non-FDA-approved indications, what is known as "off-label" prescriptions), but this heavily engages their professional responsability and can lead to hefty malpractice lawsuits if things turn awry. Getting FDA approval can thus greatly facilitate the prescription and sale of a drug, but it involves long and expensive clinical tests which may not be economically worthwhile for so-called "orphan drugs" with limited markets (as opposed to, say, drugs for ensuring the sexual potency of wealthy middle aged men...) Hence the rationale for the Orphan Drug Act.

However, exploiting the monopoly to obtain a 10000% markup clearly seems excessive. KV is being greedy and this may in turn generate a public backlash against the Orphan Drug Act.

One thing that intrigues me is that, at least in other countries, licensed pharmacists are exempted from patent monopolies when mixing a formulation themselves. I am somewhat (OK, only moderately) surprised that when the Orphan Drugs Act was passed, nobody thought of including a similar exemption, which would have prevented KV from acting like this.
posted by Skeptic at 5:38 AM on March 10, 2011 [5 favorites]

My wife got shots, on our couch, of progesterone during a combined seventeen weeks bed rest with our two, now thriving, children.

Fuck greed.
posted by I'm Doing the Dishes at 5:47 AM on March 10, 2011 [1 favorite]

"KV chief financial officer Tom McHugh, said the drug's cost is justified given the mental and physical problems that come with premature births."

Considering the mental and physical problems associated with brake failure, you won't mind if I charge you $30,000 to replace your brake pads.
posted by notsnot at 5:53 AM on March 10, 2011 [25 favorites]

I get my HRT medication compounded for me, and it is a lifesaver. The pharmacist at the little place that does it is always available for consultations and really knows her stuff. I hate to see a Big Pharma corporation taking away that business from them, even without the ramping up of the price to ridiculous extortionate rates.

This orphan drug status that precludes the specialty compounding pharmacies from making the injections now--could they get past that by adding, say, a harmless prenatal supplement to the injections?
posted by misha at 6:05 AM on March 10, 2011 [2 favorites]

I think that they're saying that fewer than 150,000 women will be viable candidates to receive this treatment

Well, at these prices they're probably right!
posted by backseatpilot at 6:10 AM on March 10, 2011

As someone who has had to give his wife shots of this in the past, and is scheduled to again, very soon, i'm very concerned.
posted by jbelshaw at 6:18 AM on March 10, 2011

My kids were four weeks early. My wife was on bedrest at 25 weeks. Gave herself daily injections of lovenox from 14 weeks. Daily injections of insulin to counter gestational diabetes from 23 weeks. Went into premature labor at 29 weeks. Racing with her to the hospital that day, it struck me that our kids might be born 11 weeks early and very well might not survive. I've never been so scared.

That afternoon, the doctor prescribed indomethacin to slow things down in the hope that labor would stop entirely and give us a little more time. The drug can cause premature closure of the ductus arteriosus, and they discussed that possibility with us before administering the drug. We made a choice and the kids turned out okay. It was covered by our insurance. Not every drug she took during her pregnancy was, though. We paid for them all without hesitation. You do what you need to.

I didn't realize this until my wife became pregnant, but your role as a parent begins at conception, not when the kids are born. The choices a mom-to-be makes throughout her pregnancy can and will affect her child's health once they are born. That's your responsibility.

This feels very much like a greedy drug company holding desperate parents hostage. The statement given by Divis seems like fearmongering masquerading as benevolence. Almost as if he's saying: 'You don't want your kids to grow up mentally disabled, do you? Isn't having a healthy child worth $1500 a dose?'

Does the compounding cost that much? Highly doubtful. As far as I can see, other than establishing rigorous testing procedures to make sure the drugs it sells are standardized, KV has no setup costs to speak of -- and that's a huge windfall for his company, considering that it can take up to 20 years and between $800m and $2b (USD) to discover a drug and bring it to commercial market.

At the time, I would have literally done anything to make sure my kids weren't born prematurely. KV should not be allowed to take advantage of vulnerable parents-to-be like this. It's not right.
posted by zarq at 6:49 AM on March 10, 2011 [8 favorites]

KV Pharmaceutical chief Gregory J. Divis Jr "said the cost is justified to avoid the estimated $50,000 cost of mental and physical disabilities that can come with very premature births." "Makena can help offset some of those costs. These moms deserve the opportunity to have the benefits of an FDA-approved Makena."

And if you can not afford the new price but could have afforded the old price, can you sue (And win with a jury) to stick Jr there with the extra costs which would have been prevented?

Cuz if you are that poor - the tax payer is gonna pay one way or another....
posted by rough ashlar at 7:00 AM on March 10, 2011

A 100x markup? Two fucking orders of magnitude? I think I'll take my chances with the compounding pharmacies, thanks.

For every inexpensive unapproved lifesaving injection, there are a dozen homeopathic cures that do nothing, and put the life of the mother and child at risk.

Clinical trials are a damn good idea for a very large number of reasons. However, doing them properly is expensive, and if the government isn't going to be in the business of doing these trials itself, then the Orphan Drug Act is a sad necessity (although, this incident demonstrates that it's flawed in its current incarnation without price controls).

_{(And, also, for whatever it's worth, back when I worked for a very large and influential pharmaceutical company, we were terrified of the FDA. I can't recall ever seeing any overtly visible signs of corruption, and if anything, Pharma often got screwed by the government. Compared to every other kind of patent and copyright, drug patents in the US are extremely short, especially considering that the drug is under trial (and not being sold) for approximately the first third of the patent's duration. KV didn't get torn to pieces by the FDA and nearly go bankrupt because it was cozy with the government. I hate to defend them here, but I really don't think they're in cahoots with the government, nor do I think that the FDA is particularly incompetent -- generally speaking, they're one of the best-run government agencies.)}
posted by schmod at 7:03 AM on March 10, 2011 [2 favorites]

This is absolutely sickening. I can understand the reasons behind the push to create a "FDA approved" progesterone shot, since currently many women who use progesterone shots during pregnancy must pay for the shots out of pocket. But there was no research or development that needed to be done here; the studies showing the efficacy of progesterone for preventing miscarriage and preterm labor were already in place, and any ma and pa compounding pharmacy is capable of formulating the correct dosage.

One way in which progesterone shots are increasingly being applied is to prevent miscarriages in women who are known to have a progesterone deficiency. Currently, this is a (relatively) cheap form of treatment, there are basically no known side effects for either mother or baby (predictably enough, since progesterone is a hormone which your pregnant body should be producing anyway, and the synthetic stuff is just making up for a deficit of that), and the progesterone shots allow women with a previous history of multiple miscarriages to go on to have healthy full term pregnancies. All wonderful stuff! But now that the shots are going to cost $1,500 per dose, how many women would be capable of bearing the cost out of pocket? How many health insurers are going to pick up the tab for a woman who has been diagnosed with a progesterone deficiency, but has not yet had a miscarriage or threatened preterm birth?
posted by Wavelet at 7:57 AM on March 10, 2011

Progesterone to prevent preterm delivery is now more expensive than gold
posted by zarq at 8:00 AM on March 10, 2011 [1 favorite]

Clinical trials are a damn good idea for a very large number of reasons. However, doing them properly is expensive...

Serious question, not snark: why are clinical trials so expensive?
posted by steambadger at 8:25 AM on March 10, 2011

Hopefully this repulsive case will lead to some pressure for better policies.
posted by East Manitoba Regional Junior Kabaddi Champion '94 at 8:34 AM on March 10, 2011

but I did not say anything because I was not needing progesterone injections
posted by CountOfStGermain at 8:54 AM on March 10, 2011 [3 favorites]

Please don't conflate compounding pharmacies with homeopathy.
posted by bq at 9:22 AM on March 10, 2011 [8 favorites]

Ethex Corp., pleaded guilty in March 2010 on two felony counts of criminal fraud

Eponysterical
posted by Pogo_Fuzzybutt at 9:33 AM on March 10, 2011 [1 favorite]

Please don't conflate compounding pharmacies with homeopathy.

I don't think anybody did, bq. schmod was just explaining why clinical tests and FDA approval are good things.
posted by Skeptic at 9:34 AM on March 10, 2011

steambadger: " Serious question, not snark: why are clinical trials so expensive?"

Cost depends on the trial, type of drug and what phase it is. Average cost for a clinical trial is (i believe) about $25K per patient -- but that's an average. Chemotherapy trials are exponentially more expensive than say, that for a topical dermatitis medication.

What matters here is who pays the bill. Because the pharmaceutical company or organization that sponsors the clinical trial doesn't pay for all its costs.

So, let's say that costs for a clinical trial are broken into "routine costs," "extra costs" and "research costs."

Routine costs would happen regardless of whether a patient is in a trial. This is especially true for people with chronic conditions or diseases, such as cancer. They include doctor visits, lab tests, scans and hospitalization. These are usually covered by insurance or the patient, not the organization or company sponsoring the study.

Extra costs happen because a patient is participating in a clinical trial, but they might just happen whether or not a patient is enrolled. They are usually covered by the organization or company sponsoring the study, but sometimes may also be covered by insurance or the patient. They may include extra medical scans, lab tests, additional doctor visits or other tests.

Research costs are for tests that are strictly and solely associated with the trial. They include employment of one or more medical staff (usually doctors, nurses, PA's and perhaps lab techs,) as well as any costs related to production of medication, lab work, medical scans, data collection and analysis. Research costs are covered completely by trial's sponsors. These costs can add up very, very quickly especially if hospital stays are involved.

But about 30 US states now require that medical insurance cover some or all of the cost of a person's enrollment in a clinical trial. So there's also that to consider. Every single time a state has attempted to pass a mandated clinical trial coverage law insurance companies have said that premiums would skyrocket. Go figure.
posted by zarq at 9:51 AM on March 10, 2011 [1 favorite]

Correction: 27 states and Washington DC have passed laws relating to insurance coverage and clinical trials.
posted by zarq at 9:57 AM on March 10, 2011

"KV chief financial officer Tom McHugh, said the drug's cost is justified given the mental and physical problems that come with premature births."

Considering the mental and physical problems associated with brake failure, you won't mind if I charge you $30,000 to replace your brake pads.

Well, if you had a monopoly on brake pads, you would, wouldn't you?
posted by Skeptic at 10:15 AM on March 10, 2011 [1 favorite]

I see what you're saying Joe and in that situation, which is what we're talking about here, it makes a certain ammount of sense (and is often done that way).

But I'd still be in favor of some sort of "kick patent trolls in the crotch" legislation.
posted by Kid Charlemagne at 10:35 AM on March 10, 2011

Why don't the right to life folks aim their sights at something like this for a change and support women who are trying to have babies?
posted by TedW at 10:47 AM on March 10, 2011 [9 favorites]

Please don't conflate compounding pharmacies with homeopathy.

I did not. But, the point remains: where do you draw the line?

Oh, right. With a clinical trial.

It's incredibly common for long-standing "common sense" medical knowledge to be turned on its head when placed under scientific scrutiny. Our general tendency to make these "common sense" assumptions is one of the primary reasons why the pharma industry is so incredibly tightly regulated.

I'm glad that this drug made it through the trial and verification process, and was proven to be effective without causing grievous side-effects years down the road. However, for every drug that turns out this way, there are 10 others that do not.
posted by schmod at 1:13 PM on March 10, 2011

Progesterone to prevent preterm delivery is now more expensive than gold

Cool let's base our currency on that instead.
posted by 7segment at 1:42 PM on March 10, 2011

There are apparently ways around this. Compounding pharmacies can make it differently. I wrote about it here.
posted by Maias at 2:30 PM on March 10, 2011 [4 favorites]

The drug was custom-compounded by wholesale and specialist pharmacies, legally, but without federal approval. These injections cost between $5 and $15 a dose and were regularly reimbursed by insurance companies and Medicaid

So there's a market for it, meaning there is demand. It follows that the product is likely to deliver some benefit even it's present formulation. If it is offered between $5 and $15 we can safely deduce its actual cost is certainly lower, maybe an order of magnitute lower.

On clinical trials: if well and honestly run they are likely to produce relevant and precious information, yet that doesn't in any way imply they must cost a fortune. Once the trial is over, the costs can be easily recovered; when they are fully recovered, in theory the price should be reduced, but that doesn't necessarily happen "in reality", in which the producing company keeps the price "high" because people are willing to pay $1.500 anyhow to avoid a miscarriage!

Economists have a way to describe this: the producer selling at $1.500 as opposed to $15 is taking away consumer surplus and turning into a private profit, while the social costs that may occour thanks to that mispricing (ever heard of some parent who robbed or killed somebody to save their children?) are shifted to society, both to expecting mothers and families and to state coffers, should the extra cost be carried by medicaid.

It's pure intellectual squatting: pharmacies must be allowed to keep selling the presently available formulation at its present relatively very low cost (with respect to average income), while that private company can certaily do all the trials they want and market the new formulation if they so wish, but they must carry the risk of their enterprise, not impose the risk and costs of the trial to people who actually need the drug. They are effectively jeopardizing pregnancies in order to (allegedly) save more pregnancies by running trials.

If this kind of system doesn't trouble you, I sincerely wish you will never ever need medications or help from doctors, but chances are you will, we are all frail humans.
posted by elpapacito at 3:37 PM on March 10, 2011

3) Was this incompetence or corruption at the FDA?

"Never attribute to malice what results from stupidity. Never attribute to stupidity what results from indifference."

--Robert Heinlein
posted by zardoz at 5:56 PM on March 10, 2011

Maias writes "There are apparently ways around this. Compounding pharmacies can make it differently. I wrote about it here."

Wow, Time is running their own link shortener. I hope that doesn't catch on. Expanded link to the story.
posted by Mitheral at 6:35 AM on March 11, 2011

Mitheral: Oh, it's catching on. A LOT of sites are doing it these days. Annoying as hell.
posted by hippybear at 7:37 AM on March 11, 2011

It's for twitter purposes. I updated the story today (long link), with from Sen. Sherrod Brown expressing outrage and calling for a price reduction and info on the ex-CEO being sentenced to prison today for mislabeling oversized morphine tablets when he was there (yeah, I know, it sounds good if you like drugs but too much morphine is obviously bad if you have no tolerance).

A friend pointed out, that suggests that their quality control isn't better than that of the compounders anyway so why should people pay more if the NIH paid for most of the work that allowed them to get through the FDA?
posted by Maias at 6:01 PM on March 11, 2011

I know it's for twitter, doesn't make it any less annoying. Previously permalinks were usually meaningful and at a minimum included the site name. Twitterfied links don't even give you that minimum instead turning the permalink into mystery meat.
posted by Mitheral at 7:37 AM on March 12, 2011

Update: FDA thwarts KV's over-the-top pricing on Makena
posted by Ery at 12:25 PM on March 30, 2011 [2 favorites]

Maker of pregnancy drug reduces price amid outcry

March of Dimes abandons KV Pharmaceutical
posted by hippybear at 10:24 PM on April 1, 2011

Good for the March of Dimes and FDA. And yah, boo, sucks to KV Pharmaceutical. What, having a monopoly on a life-saving drug wasn't enough?
posted by Joe in Australia at 5:36 PM on April 2, 2011