Friday, May 13, 2011

Makena: Money for Nothing

A month or so ago, I wrote about a "new" drug called Makena, which is used to prevent preterm labor and therefore improve outcomes for babies born prematurely. I put "new" in quotes because Makena isn't new at all -- it's a formerly open-source drug that was prescribed without a fancy marketing name until the FDA handed over exclusive sale rights to a company called KV Pharmaceuticals.

Guest blogger Harold DeMonaco over at reports on a new study of the cost of the open-source preterm labor drug vs. the exclusive Makena:

[the open-source drug] has been available from compounding pharmacies with a 20 week course costing about $300. Earlier studies demonstrated the Number Needed to Treat is 14 so the cost of preventing a premature birth is $4,200. The direct cost associated with a premature birth is $33,200. That was until the FDA approval.

K-V Pharmaceuticals has priced Makena at $29,000 to the pharmacy for the same 20 week treatment. Based on this pricing, the direct costs for preventing a premature birth is $406,000.
Wow. The number needed to treat -- a key piece of information in determining whether a treatment is worth the cost -- went from $4,200 to $406,000 overnight.

DeMonaco continues:
These drugs represent significant health policy issues. Both deserve considerable thought and assessment prior to any judgment on the part of the public. So, while there has been some news coverage of these drugs, journalism could provide a better public service by dropping back to address the bigger picture for news consumers and health care consumers…. help citizens understand why we lead the world in percentage of the GDP devoted to health care spending without a concomitant world-leading rank in health care quality and outcomes.
I have a friend whose daughter is currently experiencing preterm labor while she waits (on bed rest) for her twins to be born. So I admit I'm extra-sensitive to the greed of KV Pharmaceuticals. They make a big deal of doling the drug out at a low cost to uninsured women, but they'll make out like bandits from anyone who has insurance, which will then have a clear effect on all of our insurance premiums.

And the only goodies KV Pharmaceuticals brought to the table are an awkward name like Makena and a marketing budget.

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