From $10-$20 a shot to $1500?

Incredible, infuriating story

A drug for high-risk pregnant women has cost about $10 to $20 per injection. Next week, the price shoots up to $1,500 a dose, meaning the total cost during a pregnancy could be as much as $30,000.

That’s because the drug, a form of progesterone given as a weekly shot, has been made cheaply for years, mixed in special pharmacies that custom-compound treatments that are not federally approved.

But recently, KV Pharmaceutical of suburban St.Louis won government approval to exclusively sell the drug, known as Makena (Mah-KEE’-Nah). The March of Dimes and many obstetricians supported that because it means quality will be more consistent and it will be easier to get.

None of them anticipated the dramatic price hike, though — especially since most of the cost for development and research was shouldered by others in the past.

“That’s a huge increase for something that can’t be costing them that much to make. For crying out loud, this is about making money,” said Dr. Roger Snow, deputy medical director for Massachusetts’ Medicaid program.


Just breathtaking!
At what point does lack of affordability affect whether mothers are helped to hang on to term, or their difficult pregnancies are just shrugged off and lost?

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  • Anonymous

    I had to take compounded progesterone with two of my pregnancies. If the cost was that high when I was needing it, I don’t know what we would have done. Horrible.

  • http://twitter.com/conversiondiary Jennifer Fulwiler

    That is so insane. My heart almost skipped a beat when I read the first few sentences, because I’m on a critical medication that I have to take during pregnancy that currently costs $30/shot that I must take daily — and my life would at risk without it. I thought you were talking about my drug and almost fell off the couch. I’ll say a prayer for the unfortunate women who have to take this one!

  • Linus

    Yeh, just wait until Obama care really kicks in!!! Maybe we really will have to have a revolution.

  • Linus

    Yeh, just wait until Obama care really kicks in!!! Maybe we really will have to have a revolution.

  • Anonymous

    Oh yes, the wonders and benefits of more government meddling!

    So why does my parish priest keep touting the virtues of government health care?

  • Nick

    Pray for the conversion of hearts.

  • http://pulse.yahoo.com/_6SQWADITZPYHKSWSM5ONMDI52I Greta

    Wow, imagine you are CEO of a company in an industry which is always battling both competition, PR, and the federal government. When a pharma company finds a compound or mix of compounds and starts work, it takes years to get one to market. Along the way, you might have 30-40 or more in the works to get that one single product that makes it through to market. So what you are paying for with drugs is that long list of failures as well as the successful ones. The amount of time has continued to go up as has the cost of insurance to cover lawsuits. The requirements in the end call for live patients and doctors to participate and stick to all the protocols that the government is ever increasing. So when a drug hits, its list price is then negotiated with the various players. But people don’t want to participate or do not follow the protocols and at the eleventh hour have to be thrown out and doctors are too busy just getting by so if they talk one into it and go through all the set up and training, most times after a year or less they drop out. And God forbid there is some reaction to the drug that the ambulance chasers can find in some number of people, you have class action lawsuites. Guess what, all of this is party of the cost. so when you have a drug that makes it through the maze, you set up a price that will help defray all these costs of doing business and then you set up a list price from which you will negotiate discounts. You can only protect the drug for a few years and then you lose out to generics.

    many people are unaware of how much drug prices are until they do not have insurance. I had a pill I which was costing me 35$ a month. I was without insurance for a few months and the price without insurnce discount was over 700$ a month. Some of the union protected public sector folks pay little to nothing for all drugs and so we are picking up the tab for outrageous healthcare costs. While this story is horrible and tragic for many and we should all scream about it, we should be doing more to fix this issue for everyone and for all ailments. The recent reform did nothing to change any of these dynamics. And if we simply make the pharma business unprofitable, most of the research will stop, especially on those disease states with very low percent of the public in need. Something should be done, but it requires a very good knowledge about the entire problem which in healthcare is never a bumper sticker problem or solution.

  • Beatrix

    Greta – I agree with most of what you say, but unless I’m reading this wrong “KV Pharmaceutical of suburban St.Louis (which) won government approval to exclusively sell the drug” didn’t develop the product; in which case this is essentially about the government granting a monopoly right to a company by fiat.

  • Dad of Six

    Yes, and one wonders who KV has supported in the past with their political contributions?

  • Jim

    Insured patients with annual household incomes of up to $100,000 who apply for and are eligible for copay assistance will have a copay of $20 or less per injection for Makena.

    Uninsured patients with annual household incomes of up to $60,000 who apply for and are eligible for patient assistance will receive Makena at no cost. Uninsured patients with annual household incomes between $60,000 and $100,000 will be able to acquire Makena at a cost that is comparable to the average copay assigned by commercial insurance plans.
    http://www.kvpharmaceutical.com/

  • Dan

    Jim,

    Good info. But, if they are saying it costs $1,500 a shot, someone is going to pay it, somewhere, eventually, through higher insurance premiums, for example.

  • Anonymous

    Reminds me of the narcolepsy drug Xyrem. I have narcolepsy and thank God I can manage without Xyrem, because it currently costs around $2500/month. And do you know what’s in Xyrem? It’s not some novel drug that was expensive to develop. It’s not some complicated molecule that’s difficult to synthesize. It’s basically just GHB, which is also a street drug of abuse. It can’t possibly be that expensive, as it’s commonly used in the club/rave scene and as a date rape drug. You can get it cheap enough to rape people recreationally, but if you’re uninsured and you want it to treat your severe disabling sleep disorder, you have to fork over your entire salary.

  • Fontevrault

    I hate to say it but it’s not just the drugs themselves. The insurance companies make millions based on those inflated prices. I’ve had 4 miscarriages and in between I’ve had lots of testing to try and figure out why. One round of testing included 15 vials of blood and over $4000. Oh – and here’s the good one – the insurance company only paid about $500 for that testing. They negotiate reduced prices for themselves, claim that higher health care costs reduce their profits, and get rich doing it. And the uninsured has to pay $4000 for the same service.

  • Sb

    This is another perfect example of the high cost of government intrusion in ANY area, healthcare being just the most obvious. The government granting monopolistic power (i.e. eliminating all competition in the name of “good intentions”) to a private company is corporate welfare and has nothing to do with our Free Market economy…it spits in the face of true capitalism. Obiviously this is politically motivated between politicians and their supporters.

    Instead of pointing fingers at profit seeking companies (if they made no profit, they would not invest in continued R&D for new drugs), look to the source of the problem: Government intrusion. As long as they keep their finger in the pie, the costs of healthcare and drugs will continue to sky-rocket. In a competitive market without government intrusion, profit seeking companies face competition, which automatically forces costs down to the lowest maintainable level while maintaining the highest quality (otherwise new competitors will enter and offer a lower price and better quality and drive the higher priced/lower quality companies out of business).

    We can’t put a band-aid on a gun shot wound, so all these small fixes by government to ‘correct’ healthcare is futile when the systemic issue is due to the same government.

    It’s easy to blame insurance companies, but if we took care of the greater problem driven by bad government policy (politicians know nothing about healthcare, science, business, or economics), then the other problems would solve themselves by the inherent nature of the market.

  • Jenny

    I work in the finance department of a major hospital and honestly I can’t make heads or tails of health care costs. It is a gigantic shell game as best as I can tell. Now I am not an accountant, so I have not been granted the special knowledge required to interpret the numbers I see. They (hospitals and government and insurance companies) claim costs that just cannot be that no individual actually pays, but the difference gets written off as losses.

    Nobody is actually paying $40 for a Motrin tablet and yet that is what my hospital charges. The insurance companies don’t pay $40 for it–they pay a preferred rate– and the uninsured get it written off of their bills. The government doesn’t pay $40 for it, but an overall rate by diagnosis that is supposed to cover all costs. I don’t know what the hospital is actually paying for the tablets, but I have hard time believing it is $40 a pill when you can get 200 pills at the drug store for $5 (that’s 2.5 cents a tablet).

    So why are we pretending the Motrin costs $40? I don’t know, but I suspect a similar thing is going on with this pregnancy drug.

  • http://pulse.yahoo.com/_6SQWADITZPYHKSWSM5ONMDI52I Greta

    You go to buy a car and the list sticker price is shown. when you negotiate a discount, who pays for the rest? No one. The car maker sets a higher price and then if necessary, discounts. When the car is in short supply, you pay sticker price.
    In healthcare, everything starts with a huge price if its CT or MRI scanners or specialized surgery techniques or hospital bills. Then a price is negotiated with payers (insurance companies and goverment Medicare, Medicaid, etc) and part of the agreement is what the provider, doctor or hospital, will receive for the service provided and in most cases, they have to agree that these charges are the total charges, and then according to your policy, the user pays some amount. This system was largely created by the federal government when they put Medicare in place. They set up what was called usual and customary fee for each service. However, new services had to be approved for payment and a price established. Thus when CT’s came about, they established a cost based on the cost of providing the service, but the family practice charge which was already in existence was set in stone with minor changes. That is why primary care is dying. The government has mandated many things the doctor has to do, but does not pay for them such as HIPAA protection. A doc in 1950 could get by with 1.2 staff per doc now averages about 4.3 staff.

    Each year, the government puts out a new fee schedule that is about the size of all the NYC phone books together with minor changes in many of the codes. These are not negotiated, but dictated. Docs and hospitals have to determine if they can make their cost providing those services and you must balance winners and losers and hopefully at least break even. Insurnace companies tend to follow the government charges with slight increases.

    Drugs like this one are rarely near the list prices except to those who do not have insurance and the pharma’s usually set up a plan to provide deep discounts as was done with this drug by KP for those making under a specific income and not insured.

    It is a mess and something that was not part of reform. ObamaCare makes things worse in many ways.

  • http://pulse.yahoo.com/_6SQWADITZPYHKSWSM5ONMDI52I Greta

    I saw this post and went to google and found hundreds of posts with the same info. Stories in healthcare like this often go viral all over the web to millions of people. From this they believe they have some window on the pharmacy industry or the insurance industry or the doctors and hospitals. Some actually think there is a healthcare system. Few understand all aspects of healthcare, even those in the industry for a lifetime. It depends on that part of healthcare you are involved in and your role in that small part.

    Those outside the Catholic Church entirely or those in the Catholic Church who could not tell you the actual teachings of the Church often talk about something they believe to be fact about the Church. To those who truly know all the teaching of the Church, it is often shocking that anyone would put out such a farce or believe it. Many are offended by what they see as outright distortions if not outright lies. Most of the time it is simply someone writing something that has not bothered to research it and before you know it, somehow it has become a new reality. The same thing happens with healthcare only multiplied a hundredfold. These “facts” are used by some people to demonize an entire industry as we witnessed during the healthcare reform by Obama and the left on the evil inusrance industry. I would have loved to see Obama take a test on that industry to see what he actually knows about it. So we had a bill that grew to 2000 plus pages when signed and has since grown larger with each release from HHS while also spurring the need for over 1000 wavers to date. When you touch a small part of healthcare, you will soon find you have to do something to that part which has been impacted which does not seem on the surface even related. If the government had not decided to get involved as a payer insurance provider in the first place, it would not be as crazy today. Government never fixes anything. Remember always as Reagan said, if you hear someone say “I’m from the government and I’m here to help” run away as fast as possible.

  • Steve_and_theresa

    Price gouging at it’s worst.

  • Anonymous

    After my head stopped spinning, I realized that the price hikes are normal U.S. economics in goverment regulated enterprises: the company promised to spend huge amounts of money on safety studies. How are they going to get that back? Some call it “gouging”.

    But is it, really? The article says the FDA does not set the price of drugs. Ah, but it does. It tells the company how extensive the studies must be, what kind of facilities it can be made in, the required educational background of those who make it, exactly who it may be sold to and who it must not be sold to, what the packaging must say, all under penalty of huge fines. I know, because I lived under, and enforced all that stuff. It is *very* expensive.

    If I had to get FDA approval to sell my local tap water as a treatment for moms in risky pregnancies, I would have to charge $1500 a dose, too.

  • RLC

    I wonder if at least part of the price increase might be preparation for future lawsuits by lawyers alleging that the drug is responsible for miscarriages, deformed babies, and the like? I’m sure no American jury would ever find for the drug company and the typical jury would think nothing of hiting the company with multimillion dollar judgments. Not to mention how many settlements the company would be made to minimize such costs. R&D costs are not the only thing a company considers in determining costs.

  • Theresaquigley

    The first few sentences also made me catch my breath. I was curious however when I read the full article that this drug is a synthetic form of progesterone. During my last pregnancy, which unfortunately still ended in miscarriage I was given progesterone injections twice a week but the progesterone was natural progesterone in oil. I am surprised they would recommend using a synthetic hormone in pregnant women.

  • tnmd

    i think the key here is the phrase “not federally approved.” if this was an off label use then the companies producing it had deniability. if there was a poor outcome (e.g. a very preterm birth leading to a child with multiple medical issues) they could not be sued because you weren’t “officially” supposed to be taking the drug for that purpose anyway. now that this drug is approved for this specific indication just watch the lawyers come out of the woodwork to sue the company any time someone ends up with a less than perfect pregnancy outcome after using this medication. there’s the reason for your new higher pricetag–they’re factoring in what they’ll have to pay out in legal fees.

  • http://pulse.yahoo.com/_6SQWADITZPYHKSWSM5ONMDI52I Greta

    Not sure how you think the insurance company profits on inflated prices. Where they make money is understanding those they are going to insure and using actuarial tables, determine risks and charges. It is frankly to the benefit of the people that they negotiate a price because the lower prices allow the insurance itself to cost less. If they are very good at their job which they are, they can make a nice profit which in many ways they deserve. You are not only buying the coverage, but their expertise and buying power to negoate the contracts with providers and pharma.

    Being uninsured is not the way to travel in America unless you are poor which would put you on medicaid. If you have anything at all, it will cause you great pain. As I stated on another comment, healthcare after government medicare began became a game of high list prices and negotiated payments which the insurance companies followed. However, the massive influx of money from the government also allowed the growth of high tech in the industry. Of course if the government put as much money into any single industry as they have healthcare, I suspect instead of cars on wheels, we would be getting around like the Jetsons now.

    A huge problem in healthcare is also the people themselves. Since we have insurance, we could care less what things cost, only what we have to pay. If a doctor told you a test would cost you 750$ versus 20$, many would say no thanks. If we had grocery insurance and paid 20$ per visit and could get whatever we wanted, we would all be eating lobter and filet mignon. I have friends who go in every time they have a slight twinge because they have insurance obtained by the unions and pay nothing at all. They eat up huge healthcare costs and could care less. Another friend on Medicare has been circulating between hospitals and rehab centers and home care for over a year. Each time one is ready to run out, he goes to the emergency room with “pain” and after massive tests and at his insistence, he is readmitted which seems to start the cycle of payments all over again. The providers are eager to help him through the maze and he pays nothing out of pocket. He honestly works himself up into pain worrying about where he will go after the time frame is up for rehad. We do not want or accept any pain. We spend huge amounts of our lifetime expenditure for healthcare in the last 6 months of our life clinging to every chance and avoiding any pain. Sad, but much of the problem is not them, but us…

  • Anonymous

    Thank you government intervention

  • http://twitter.com/FriendofYasmine Carolyn

    From the article: “Hormone drugs came under fire in the 1970s, following reports they might damage fetuses in early pregnancy. In the 1990s, the early incarnation of Makena was withdrawn from the market.”

    Liability costs are very high for drugs used during pregnancy. (Pregnancy-related medical lawsuits are how John Edwards got his big bucks and drove obstetricians out of his state). Imagine the liability for a drug which “might damage fetuses in early pregnancy”. THAT is why all those new clinical studies had to be done by the company, even for an old drug.

    It is unfortunate that the cost is so high. The current set-up of U.S. drug marketing, where drugs go to mandatory generic status after the expiration of the patent, means that drug companies cannot charge a little more for older drugs to even out cost differentials between newly-approved and older drugs. And if you read the article, not many individuals will be paying the full price, so the number of people from whom the drug company can recoup their costs and make some profit in a risky business is limited.

    And American consumers subsidize drug development for most of the rest of the world, where prices are set by government. This is especially true in countries like Canada with “mandatory licensing”. You don’t hear about many new drugs being developed in Canada, do you? The Canadian government has decided that it is in the country’s interest to force companies to sell for low prices BECAUSE they do no drug development in Canada. (This admission was made during a conference put on by Canadian regulators for American drug companies).

    Personally, I hope that we don’t develop the attitude that people should only be able to make a profit if they are producing something that people don’t really need. I like investors to choose pharmaceutical companies over entertainment companies which put out trashy stuff, for example. But we still need to figure out a better way to support the development of new products while making those developed more available to those who need them. This need will become even more evident in the new world of “biologicals”, which will be much more expensive to develop than more traditional pharmaceutical products.

  • http://twitter.com/FriendofYasmine Carolyn

    Another point: This drug reportedly received “orphan drug status”. This indicates that the FDA did not believe that a company would undertake the testing necessary to get a standard approval either because the patient population is small or because costs of approval were not expected to be recouped for some other reason. The FDA hates off-label use of drugs and was probably glad to have a company do the testing to get approval for a drug which was being compounded for off-label use.

    Even “orphan drug status” is not a walk in the park. Years ago, I tried to help someone without the backing of a big corporation get FDA approval for a product using common ingredients which dramatically decreased the pain and other symptoms of shingles in terminal AIDS patients. The product was approved by California’s version of the FDA but the Feds showed no inclination to help get it approved nationally. In this case, a poorly-thought-out law by Congress was probably the culprit.

    Incidentally, “originator companies” can continue to face liability costs even after a drug goes generic — even if they did not manufacture the drug which for which an adverse event is alleged.

    It does worry me some that, as “originator” pharmaceutical companies become fewer and larger, profits will be tied more and more to special political deals and less to the efficacy of products.


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