K-V Pharma Slashes Prices Of Preterm Labor Drug After FDA Move

K-V Pharmaceutical Co. (KVA, KVB) slashed the list price of a drug to help prevent preterm births, following the Food and Drug Administration's denial it will take action against pharmacies that make a much cheaper alternative.

Class A shares fell 5.2% to $5.68 in recent trading and are off 37% this week.

On Wednesday, the FDA rebutted a letter K-V had sent to pharmacists warning the agency would take enforcement action against them if they made or compounded the active ingredient in Makena, a drug the company makes that was approved in February. Prior to the drug's approval, a similar product was made by pharmacists for between $10 and $15 a dose.

K-V's Ther-Rx unit, which makes Makena, said Friday it would cut the drug's list price by 55% to $690 per injection and offer supplemental rebates. It capped the costs for a full course of therapy to a maximum of 15 injections for contracted health insurance plans and state Medicaid agencies and removed caps to qualify for financial assistance from the company.

The treatment had faced criticism from lawmakers and doctors about its price. Legislators had sent the Federal Trade Commission a letter urging the agency to launch an investigation into potentially anticompetitive behavior because of the increase in the cost of Makena compared with compounded products.

Makena was given seven years of market exclusivity when it was approved under an FDA program that grants incentives to companies developing treatments for rare ailments.

-By Matt Jarzemsky, Dow Jones Newswires; 212-416-2240; [e-mail]