The following post from Pharmalot provides an interview of two FDA watchers from the healthcare analysis firm, Prevision Policy. They have several comments on how the FDA's decision in the KV case broke with precedent. The comment that I find most interesting regards pricing.
The analysts note that the FDA looks like it responded in the KV case as a direct result of KV's proposed pirce hike of treatment from aroudn $20 to $1500 per dose. The FDA is not supposed to concern itself with pricing and has no idrect jurisdiction. The analysts wonder if they aren't now on the slippery slope. For example, why don't they get involved with Provenge's ($93 K per patient) or Yervoy's ($120 K per patient) pricing?
I think there is a distinction to be made. Both Provenge and Yervoy are drugs that were just developed - at considerable risk and expense by Dendreon and BMS (or its companies) respectively. both are novel therapies for cancer. These companies did actually invest. In the case of KV, they merely got an existing therapy licensed. They did do some work and they do deserve a premium for that work. The question is should it be the premium represented by a $20 to $1500 increase? Especially, since they did not discover the drug, it was in use for decades from the compounders, and they don't even manufacture it. And -- they are exploiting the Orphan Drug Act to gain exclusivity and the CHOSE to introduce a price that is offfensive to many in the medical community. That's the problem - they are outpricing their perceived value with minimal investment and risk on their part.
So they got slapped.
Posted by Bruce Lehr March 31st 2011.