Can the March of Dimes win back our trust after the Makena debacle?

I’ve already written about the Makena controversy and why it has made me question my support of the March of Dimes. I’m still not convinced that I should trust them again. They effectively supported a process that got FDA approval for the 7,500%-15,000% increase in the cost of a drug that prevents premature birth in 1-of-5 predisposed women. Why? What could possibly be behind their support of this?

Previously available through compounding pharmacies (pharmacies that mix “custom” drugs that are not manufactured by large drug-makers) and known then as 17P or 17OP, this synthetic progesterone has helped to prevent one in five women who had previously gone into premature labor from doing so again, allowing them to carry subsequent babies to full term. The drug carried a cost of $10-$20 per shot, which—at the standard course of 18-20 weekly injections—cost up to $400 per pregnancy.

March of Dimes supported the efforts of K-V Pharmaceutical to get approval to manufacture the drug as an “orphan drug” under the name Makena, giving them a monopoly on its production for seven years. With the monopoly assured, K-V and its affiliate Ther-Rx (which will distribute the drug) raised the price to $1,500 per dose. At-risk pregnant women will typically receive 18-20 weekly doses of the drug, meaning that the cost increase took it from a maximum of $200-$400 per pregnancy to as much as $30,000 per pregnancy.

When K-V was criticized for pricing it so high, the only reason that they gave was that it’s cheaper than what it costs to bring a premature baby home from the hospital. That’s not a financial argument, that’s an excuse. K-V investor briefing documents show that Makena has a gross profit margin of 97.5%, according to a post by Dr. Jennifer Gunther. It’s obviously their plan to get out of their current financial hole.

I’ve been trying to come up with reasons why they did this, and most of them don’t give me any confidence in the organization. Here’s what I’ve come up with, expanding a bit upon the ideas I put forth in the comments to my post:

Greed

Did the March of Dimes sell out? They receive hundreds of thousands of dollars in donations each year from K-V Pharmaceutical. It doesn’t take much of a leap to hypothesize that either K-V offered the March of Dimes more money to support their application for approval of Makena as an ”orphan drug,” or threatened to cut their financial support if March of Dimes didn’t support their application. That’s a bit simplistic and implies that the March of Dimes would sell out their mission for financial gain, so I’m going to largely discount this.

Poor strategic insight

Did the March of Dimes not have a clue that, upon receiving a monopoly on the drug, K-V/Ther-Rx would keep the price of Makena reasonable, despite the fact that K-V was having serious financial issues? Industry analysts reportedly knew that the astronomical price was coming. Were the March of Dimes’ own industry analysts completely unaware? This implies a level of incompetence that, again, is difficult to consider. The March of Dimes has done a very good job at getting legislation passed and making changes in medical and industry practices, so how could they have been so blind to this?

Naïveté

Did March of Dimes blindly trust a company in financial trouble to provide sufficient financial assistance to all? K-V and Ther-Rx announced a patient assistance program that they said would help to lower copayments for eligible women to either $20 (for insured women) or zero (for the poorest, uninsured women). We’ve already had a report of a woman being told by her insurance company that she would have to pay $385 per week for her doses. Even if K-V/Ther-Rx does come through with lowering the woman’s copayment, what about the insurance company? Their cost wouldn’t be lowered, causing them to increase their premiums, and hence the cost to us. Women who are on Medicaid or other similar coverage would cost the government those higher payments, likely requiring higher taxes or fees to pay for it.

Incompetence and lack of concern

Could the March of Dimes really believe that the high price might not cause resistance? Again, this is a bit much to consider. If the March of Dimes knew how high the cost for Makena would be, how would they be true to their mission in thinking that a higher cost for the same, baby-saving drug would be accepted?

Another possibility?

I spent some time trying to come up with another possible reason that didn’t reflect so badly on the March of Dimes, because remedying any of those four reasons in the March of Dimes organization would probably be a long and painful process. I have the feeling that there’s some information that’s missing from this whole picture, and nobody seems to want to make it public. With the available information so one-sided and the parties under fire making no effort to clear it up, I find myself asking “why?” Why would they support this drug company’s heinous profiteering? If there is a good reason, why would they not bring to light anything that would help to clear up this public relations nightmare? Is it really that they don’t have anything valid to counter the arguments?

I think that I may have an idea, but it’s a bit convoluted, involves a bit of intrigue, and requires quite a bit of a leap of faith. Stay with me on this.

While 17P was being prescribed for at-risk pregnant women through compounding pharmacies, it was not an FDA-approved use of the drug. In fact, there was no FDA-approved drug for reducing the likelihood of premature birth. Even though it has been used for quite a long time for this purpose, the drug could not get approval as a generic without first being approved for that use. By getting approval of Makena, the March of Dimes now has a drug that will be recognized by all insurance plans as an approved medical treatment for fighting prematurity. That, in a way, is a huge victory for the March of Dimes. The victory, however, is being overshadowed by the cost issue.

But apparently, while K-V has sent letters to compounding pharmacies warning them that they must cease making the 17P doses, there is a way for the pharmacies to keep distributing the drug. Perhaps K-V knew this and raised the price of Makena because they know that many pregnant women will still be able to use the compounded 17P, thus reducing the demand for Makena? If doctors keep prescribing compounded 17P for their patients for the next seven years, Makena will lose its orphan drug status and generic manufacturers can then begin making it at a reasonable price. That would then have mass-produced, generic 17P available to all women, approved by the FDA and cheap enough to be on formulary through all insurance companies.

Could the March of Dimes, after playing a key role in getting Makena approved by the FDA, possibly be letting doctors know, unofficially and behind the scenes, that they can still order the compounded 17P for their patients? This would imply a significant level of subterfuge on the part of the March of Dimes, which has always been (to my knowledge) a straightforward organization which would not turn to a shady process such as that.

It’s a long shot, but it’s the only possibility that would not indicate an inability by the March of Dimes to do an adequate job of protecting the health and well-being of at-risk mothers and their babies.

So here are my questions for you:

Which, if any, of these options do you believe is the case? Why did the March of Dimes support the approval of Makena as an orphan drug? Also, why have they not said anything other than the fact that they believe that an FDA-approved drug is a good thing, and that they have “respectfully requested” that K-V/Ther-Rx “reconsider the market price” of Makena?

More importantly, now that there is a rising cry against the part of the March of Dimes in this whole debacle, what can the March of Dimes do to earn back the trust of all of those – like myself – who have lost faith in the organization?

If the March of Dimes made a grand statement in some way, perhaps refusing to take any more support from K-V, returning what they got this year (or setting it aside in a fund to act as a safety net for those who don’t qualify for the Ther-Rx assistance program), and taking a more public advocacy position against the pricing of Makena, would that change your opinion of them?

Please let me know in the comments below. I still need some help in deciding whether to support the March of Dimes again this year or to back out of this year’s March for Babies, and I’d like to hear some more, well-reasoned arguments on any side.

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7 Responses to Can the March of Dimes win back our trust after the Makena debacle?

  1. Jim says:

    Your recommended “grand statement” is exactly what was suggested in an e-mail to the MOD a couple of weeks ago as a way to mitigate the PR nightmare. They needed to act swiftly and strongly which is rule #1 in PR. Unfortunately their letter to Ther-Rx dated March 14,2001 was neither swift nor strong. The MOD may not lose the Ther-Rx “donations” but likely will suffer the loss of millions of supporters that make the MOD model work. The MOD, many believe, is an organization that has outlived its purpose. Really, what have they really accomplished since the polio vaccine. Ever wondered why they suddenly lacthed onto the preterm birth issue which is a long way from being solved. Perhaps a new organization dedicated to helping identify and implimenting practical solutions (although difficult) like smoking cessation, pre-conception folic acid intake, etc.

  2. Arnold W. Cohen, MD says:

    Your convoluted possibility does not ring true since the MOD nor any other major organization such as ACOG came out with a clear and concise statement of their outrage over the pricing initially. It took many people over the country to mount this effort to finally get the big guys to come out and let everyone know how outrageous this situation is. I personally wrote to the MOD when this happened and their first response was from Dr. Alan R. Fleischman, MD Senior. Vice President & Medical Director of the MOD who said he welcomed the drug as the first approved drug to decrease the risk of preterm delivery. It was only after the AP story came out and revealed that the MOD had accepted hundreds of thousands of dollars in support from KV Pharmaceuticals did a new response come out stating that the pricing was high.
    You must be a nice guy to come up with this possibility. I just think it was naivite on the part of doctors. We do things because we think it is the right thing to do. We don’t think as business people. Business people do things to make money. KV saw the possibility of making a boat load of money with very little investment and didn’t realize that doctors are the stewards of healthcare and we saw a major injustice here. The fact that patients would not have to pay out of pocket did not negate the enormous increase in costs without any benefit to one baby that would be passed on to the tax payor or employer who purchases healthcare.
    Shame on KV. As far as the MOD is concerned, I will forgive them, eventually but only if we get the FDA to say that it is ok to continue to allow compounding pharmacies to produce 17P at a reasonable ($10-20) cost.

  3. A.K. says:

    “only if we get the FDA to say that it is ok to continue to allow compounding pharmacies to produce 17P at a reasonable ($10-20) cost.”

    I can’t even imagine that happening. It’s such a Slippery Slope for the generic drug issue. And yes, companies developing pharmaceuticals DO need to be able to recover their development costs.

    Interestingly, this weekend I attended a conference which had absolutely nothing whatsoever to do with this issue, but I did attend a workshop by a journalist discussing PR issues in a different context. I did think about this issue and I wondered if the things he was saying might apply, remotely, to this situation. The most general observations this journalist made (in a completely different context,) regarding the organization about which he reports:

    1- The organization was not pro-active in predicting the public response to the stories and so was not prepared to tackle the fall-out, let alone prepared in advance to address them head-on before they came from others.

    2- The organization was slow and inadequate in its response, such that by the time it did respond, however sincere and honest the response was, it fell short and did little to offset the negative public opinion.

  4. Mark says:

    Jim,

    I agree that the March 14 letter was too little, too late.

    You may feel that March of Dimes has outlived its usefulness, but I can tell you that, without the surfactant and decadron therapies that they supported research on and championed the adoption of, my son would not be here. To me, that says that they’re still doing useful work.

    Arnold,

    I do try to see the opposing viewpoint, as sometimes in my civil service career, we have to do things that people think is crazy but would agree with us if they knew the behind-the-scenes facts that we can’t tell them. I want to believe that there was a good reason for doing what they did, but I honestly can’t come up with one yet.

    I agree that K-V is the big villain in this story, and I can’t really come up with a redeeming thing to say about them. I haven’t given up hope on March of Dimes yet. I’m close, but not quite there. That’s why I’m willing to give them another chance to convince me.

    A,

    Did the journalist draw any conclusions as to what the organization in question could do moving forward to regain trust? Or was that not covered or not as relevant? I’m curious, because the SVP of Marketing at March of Dimes has invited me to call him to follow up on this blog post, and I’m still trying to come up with a firm idea of what could put me more at ease.

    As always, thanks to all of you for contributing your thoughts! Sharing ideas to gain better understanding is what it’s all about.

  5. A.K. says:

    In the case of the journalist, he was analyzing two specific PR blunders and one PR success and he had some suggestions/observations specific to the three situations, but from those lists, ideas that might apply to this situation:

    In the future, proactively predict what will be the hang-ups in the story (in this case, obviously, the incredible price increase,) and be prepared with a strategy to address it ahead of time, planned statements and materials prepared with evidence that can defend the rationale/reasoning.

    Better vett for problems before hand. (In this case, did they know about the consent decree?) (Did I spell “vett” correctly? Is it just vet?)

    Don’t duck the hard questions, and gather support in advance of announcements/events.

  6. Mark says:

    A,
    But in this case, March of Dimes apparently didn’t predict the hang-up, weren’t prepared with a strategy ahead of time, were not prepared to defend the rationale/reasoning, didn’t vet for problems, ducked the hard questions, and didn’t gather support. Now, they’re bailing quickly while others are helping their ship sink. Any lessons from the journalist as to how to fix an existing situation after it has already gotten out of hand?

  7. Pingback: The March of Dimes finally responds about Makena price and Ther-Rx, well, sort of… | The Preemie Primer Guide from Dr. Jen Gunter

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