The FDA struck a blow at KV's plan to sell Makena for $1500 a pop by saying it will NOT go after compounders who continue to make the "unapproved" versions of the drug. That is providing the compounder is following appropriate standards, and is formulating a safe and effective product. Since compounders have been providing this product for 50 years, many know how to produce just fine.
The FDA is taking this unusual stance despite the fact that KV just went through the trouble of getting and FDA approved drug, and did so under the auspices of the Orphan Drug Act to afford itself market exclusivity. This action by FDA effectively negates the exclusivity protection and the agency says it is doing this over a concern that the product be available to all consumers who need it
KV was counting on market exclusivity to support its price. Now KV stock is in a nose-dive and dropped 33% today after the FDAs position was made public. That is a very effective way to block this type of price exploitation and is a LOT quicker than waiting for the FTC to act, or the Congress to rewrite aspects of the Orphan Drug Act were it so inclined.
Posted by Bruce Lehr March 30th 2011.