State, Pharmaceutical Company at Odds Over Pre-Term Birth Therapy

The distributor of a drug designed to prevent pregnant women from delivering premature babies has sued a number of states, and Texas could be next. 

The drug, Makena, which is marketed by St. Louis-based KV Pharmaceutical, is the only version of 17-alpha hydroxyprogesterone caproate, or “17P,” FDA-approved to treat women at high risk of premature delivery. But its high cost — especially compared with an unbranded drug produced by “compounding pharmacies” that customize medications — has prompted some state Medicaid programs to refuse to offer it.

KV, which filed for Chapter 11 bankruptcy last summer, has sued state Medicaid officials in Illinois, Georgia and South Carolina to get those states to offer and pay for Makena. (A Georgia judge ruled in the company’s favor; the Illinois Department of Healthcare and Family Services settled its suit.) In September, a federal judge threw out KV’s suit alleging that the FDA had not cracked down on pharmacies that were compounding 17P.

No suit has been filed in Texas — yet. But the company says Texas’ Medicaid policy is unacceptable as written; it approves Makena for poor pregnant women who have had a previous pre-term delivery only if there is no compounding pharmacy within 50 miles of their doctor’s office, and none that will deliver.

“As a practical matter, the vast majority of the population in Texas either has a compounding pharmacy within 50 miles or one across the country that will deliver,” said Scott Goedeke, senior vice president over KV’s commercial arm. “We view that candidly as a de facto barrier to getting Makena. We certainly haven’t seen any Medicaid patients in Texas get Makena.”

State health officials say doctors have safely compounded injectable versions of 17P for years, and that they have not received any complaints from Texas women about the drugs. Asked if the state Health and Human Services Commission was worried about potential litigation from KV, spokeswoman Stephanie Goodman replied, “Should we be worried about the tactics of a company trying to sell a product that has $10 in ingredients for $1,500 a dose?”

KV says it has made a “very fair and compelling supplemental rebate offer,” one that would bring the price to the joint state-federal Texas Medicaid program down to “well below $300” per injection. (A routine course of 17P, which costs just $10 to $15 per injection when produced by a compounding pharmacy, can reach up to 20 injections.)

While an FDA analysis of compounded 17P did not identify any major safety problems, the federal Centers for Medicare and Medicaid Services released a memo in June reminding states that they must cover FDA-approved drugs that provide such rebates, and that “approved drug products, such as Makena, provide a greater assurance of safety and effectiveness than do compounded products.”

The company says it has not heard back from Texas since an August in-person meeting with state health officials and a subsequent conference call — despite the news this fall that a national meningitis outbreak was linked to a compounding center.

“We don’t want high-risk pregnant moms to be the next patient group tragically affected by a problem with a compounded drug when an FDA-approved one is sitting on the shelf ready to ship,” Goedeke said.

Goodman said an FDA review "found no safety concerns" in samples of the compounded drug from several sources. Until the FDA takes action to “limit the availability of compounded versions of this drug,” she said, HHSC doesn’t have any plans to change course.

KV has its own history of drug mistakes; in 2008, the company came under fire for producing oversized doses of morphine and other drugs and failing to report some of its errors to the FDA. The company was forced to halt production and lay off much of its staff, and its former chairman and chief executive was banned from working with federal health care programs for two decades.  

In 2011, when KV first put Makena on the market, it priced the drug at $1,500 per injection, a number that sparked public outrage from health providers, elected officials and the March of Dimes. Under pressure, the company cut the price by 55 percent, and offered additional rebates to state Medicaid programs — including Texas.

“We don’t comment on litigation,” Goedeke said, “but our desire and our hope is to work this out in an amicable way.”