Shares of K-V Pharmaceutical Co. (KVA, KVB) dropped after the
Food and Drug Administration said it won't take action against
pharmacies that create a cheaper alternative for a K-V treatment
that prevents preterm labor in pregnant women.
Specifically, the FDA refuted a letter K-V sent to pharmacists
warning the agency would take enforcement action against pharmacies
that use a compound based on a valid prescription for a
patient.
The news comes after two U.S. senators earlier this month
requested the Federal Trade Commission investigate anticompetitive
behavior after the treatment, which obtained seven years of
exclusivity under the Orphan Drug Act last month, saw a dramatic
cost increase.
The FDA said it only takes such actions if the products are
unsafe, of substandard quality or are not being compounded
according to appropriate standards.
K-V's shares slid 28% to $5.17 in recent trading on Wednesday. A
company spokeswoman wasn't immediately available to comment on the
FDA's statement.
The drug, commonly known as Markena, is a weekly injection of
progesterone. K-V was given orphan status for Markena last month,
and the cost has risen to $1,500 per injection--much higher than
the cost of the treatment that had been given by U.S. pharmacies at
a cost of $10 to $20 per injection.
Orphan status in the U.S. typically brings U.S. market
exclusivity for an extended period and other incentives if the
treatment is approved.
-By John Kell, Dow Jones Newswires; 212-416-2480;
john.kell@dowjones.com