Ther-Rx lowers price of Makena, but not enough; March of Dimes cuts ties with company

I was hoping that it wouldn’t come to this, but when it happened I was very pleased to see it unfold the way that it did.

Earlier this week, KV Pharmaceutical/Ther-Rx met with the March of Dimes, American College of Obstetrics and Gynecology, American Academy of Pediatrics, and Society for Maternal and Fetal Medicine. As a result of that meeting, Ther-Rx agreed to significantly modify the pricing of Makena, and said that they would announce the new pricing today. Because the drug was so outrageously priced, a “significant” decrease could result in anything from a reasonable price to still being extortionist. Many of us awaited the announcement, hoping that it would be the former.

If you’ve been following this story, you’re already aware that the initial list price of Makena was $1,500 per dose, a 7,400%-14,900% increase over the previous price of $10-$20/dose from compounding pharmacies. This is especially heinous because a standard course of treatment for an expectant mother who has gone into labor prematurely on a prior pregnancy is 18-20 doses. That means that a full course of treatment went up from $200-$400 to a whopping $30,000! While a significant price increase was not unexpected, and Ther-Rx will have substantial expenses related to the drug, there’s a difference between making a profit after recouping your investment and financially raping pregnant women, insurers and other payers.

Ther-Rx announced their new price today: $690 per dose, a 54% price cut. That makes the net increase over the compounded version $670-$680 per dose, or 3,350%-6,800%. As I wrote in yesterday’s post, there’s no reason that Ther-Rx shouldn’t make a profit. They’re entitled. There are limits to everything, though. A price of $200 per dose, as anticipated by some drug outlook services during Makena’s application process, would have been just fine, and would have given Ther-Rx an estimated $533 million in net revenue, as opposed to the $4 billion that they were extorting. $690 per dose? $13,800 per course? Not acceptable.

And the March of Dimes agreed. The March of Dimes first issued a press release stating that the price drop was a step in the right direction, but that “the March of Dimes has decided to exercise our right to terminate our current contract and sever all professional relationships with Ther-Rx.” They also condemned Ther-Rx’s approach, noting that their “handling of the launch of Makena, and the initial list price, were highly unsatisfactory and unacceptable to the March of Dimes and the families we represent.”

March of Dimes then sent a letter to Ther-Rx President Greg Divis making it official. The letter, from March of Dimes President Jennifer Howse, thanked Ther-Rx for their support of fundraising efforts and the NICU Family Support Project over the past several years, and then informed them that the March of Dimes was “exercising our option to terminate our agreement with Ther-Rx Corporation, and hereby provide you with thirty days written notice of such termination. We ask that you immediately cease and desist the use, distribution or publication of or reference to the March of Dimes name and/or logo on any and all materials or communications in connection with KV Pharmaceuticals, Ther-Rx and Makena.”

The letter went on to note that “Access to 17-P is and always has been our paramount concern. We hope to continue to work with you to address the issues discussed by stakeholders over the last several weeks, and to ensure the intention you strongly expressed: that this therapy is accessible and affordable to all clinically eligible women.”

The contract being terminated was a more-or-less standard sponsorship contract, in which Ther-Rx provided funding for the NICU Family Support project in exchange for getting their logo on materials and announcements related to the program. The contract also stated that March of Dimes would participate in the announcement of Makena’s approval, though they would not endorse the product.

It’s likely that—when Makena’s price was first revealed—March of Dimes wanted to try to preserve the partnership, and work within the bounds of their relationship to quietly convince Ther-Rx to make the price more reasonable. They said that they also relied quite a bit on assurances that Ther-Rx’s patient assistance program would cover the costs of the treatment. But as word of $385/week and $1,900/month copayments emerged, confidence in that program eroded and March of Dimes started being more vocal. First, they released a letter “respectfully requesting” that Ther-Rx revisit the pricing structure. After there was no movement, a stronger statement was released, warning that continued lack of response would result in termination of the contract.

Now, with the contract at an end (or, at least, after the 30 days notice has concluded), the March of Dimes is free to take a more adversarial approach with Ther-Rx and rightfully separate themselves from the situation that they found themselves embroiled in after Ther-Rx surprised many with their price point.

It should be noted that Ther-Rx’s latest press release contained the promise of a series of other cost-containment measures, such as capping the cost of treatment for health insurance plans and state Medicaid agencies to 15 doses (instead of the full course of 20), promising supplemental rebates in addition to the standard Medicaid rebate of 23.1%, and expanding the patient assistance program. But really, why are they creating all of these artificial adjustments to the price if they really are planning to reduce the actual cost of the medicine? Why don’t they just cut the price further in the first place? Could it be that these reductions aren’t really going to do what they say they will? I don’t know. I don’t have enough familiarity with the industry to know. But I do know that “rebates,” especially to consumers, are frequently not submitted and/or paid, due to laxness in consumers submitting rebate forms and restrictions on filling out forms in a specific fashion.

Instead of putting forth the array of rebates, price caps, and patient assistance programs, why not be more straightforward and just cut the price of the drug? I don’t buy Ther-Rx’s plan, and neither does the March of Dimes. And that’s why I’m a March of Dimes supporter. They tried to work collaboratively with Ther-Rx, and when that didn’t work they realized that the only way to accomplish anything was to switch to a confrontational approach and terminated their relationship.

I’m back on board. I applaud the efforts and stance of the March of Dimes against the outrageous pricing of Makena, and I will restart my March for Babies fundraising appeal, with the added emphasis that more money is needed to help fill the funding gap left by the termination of the Ther-Rx contract. Let’s raise more money so that the March of Dimes doesn’t feel the loss of money from Ther-Rx. Let’s raise more extra money than Ther-Rx was giving. If you’re already walking, use this as a rallying cry to increase donations. If you’re not already walking, please consider signing up. If you won’t walk, please donate. You can click on the donation badge above and to the right to donate to my walk (or to join my fundraising team), or you can go to the March of Dimes website to make a direct donation.

You can also donate directly to the NICU Family Support Program, the program that will be directly losing the money from Ther-Rx. Now, more than ever, the March of Dimes needs your support. Let’s fill the gap created by the March of Dimes taking a stand against Ther-Rx and more!

If you’re willing to lend your voice, sign up for one of the organization’s advocacy programs. Talk with your local chapter to find out when the next advocacy day is with your state or local governments. Ask whether there will be any public activities to bring light to the Makena situation and get involved with it. Blog, tweet, post on Facebook or use any other email or social media channel to spread the word about the outrageous pricing of Makena and demand that something be done. We’ve got Ther-Rx on the run now, and maybe we can get Makena to a price point that we can actually support. If not, then support the use of compounding pharmacies to distribute 17P for the next seven years until an official generic version of Makena is available.

What do you think? Is the action of the March of Dimes in alignment with your expectations? What do you think is the next step? Did I miss anything, or is my logic flawed anywhere? Please comment below!

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3 Responses to Ther-Rx lowers price of Makena, but not enough; March of Dimes cuts ties with company

  1. No way am I back on board. The fact that March of Dimes had a co marketing agreement with Big Pharma is wrong. It also shows that they have no idea what they are doing because they not only didn’t see this coming (everyone else did), but were sloth like in the way they acted on it.

    The Internet has a long memory. As long as people Google the March of Dimes, they will read how they were eager to hop in bed with KV Pharmaceuticals. They again, they have to pay Dr. Howse’s $600k salary somehow. And all their PR guys. And legal.

  2. Mark says:

    Jen, I understand and respect your position. March of Dimes is not perfect. By the same token, the organization has funded, supported, and championed many medications, therapies, and protocols that have saved many lives, including my son’s. If it weren’t for the use of surfactant and decadron, he would not be here. They’re providing a great deal of support for the next generation of medications, therapies, etc., and saving lives. While they’ve certainly got their issues, I think that they’re a great asset as long as the current healthcare system exists.

    I know that you’re looking for changes to the whole system, and are not willing to accept partial victory. We need people with that vision and drive. I also feel that we should support the existing successes while we wait for the full system overhaul.

    Another thing to bear in mind is that March of Dimes’ involvement with Makena dates to multiple years and multiple companies before KV/Ther-Rx got involved. March of Dimes championed 17P after Delalutin was taken off the market. They helped with the initial submission of Makena (then called Gestiva) by Adeza, and continued their support when Adeza was acquired by Cytic and then Cytic was acquired by Hologic. At the time that KV bought the rights from Hologic, they were still a solvent company showing a strong stock price.

    It was only months later (likely after March of Dimes had signed on to support their launch of the drug that March of Dimes was already supporting) that KV’s wheels came off. They had the massive recalls, entered into the consent decree, and stopped manufacturing for two years. Their stock price went into the toilet. At that point, March of Dimes still needed to get a form of 17P as an on-label use approved by the FDA, and there was nobody else who could do it in a reasonable amount of time.

    March of Dimes thought that they could work from the inside to influence KV/Ther-Rx, and that was their mistake. They did not realize in a timely manner when they needed to switch from a collaborative to a confrontational stance. They’ve come out against Ther-Rx, cancelled their contract, and will work to make sure that 17P is available to all at-risk expectant mothers. I think that shows a great deal of fortitude for them to admit their mistakes, leave money on the table, and do what’s right.

    It’s not 100 percent victory, but I think that it’s enough to help them to move in the right direction and to support them.

    As a side note, they’re also aligned with you in another of your current primary causes. They’ve come out against the HCG diet.

    Keep doing what you’re doing. The take-no-prisoners, total-victory-or-bust approach is what works for you, and it’s necessary for someone to be doing that. But we also need people to work on interim goals, in a collaborative fashion, and I’ll take that role. We’ll both create change, in different ways, on different scales, and in different timeframes. And both are good.

  3. Max says:

    I’m still not back onboard. If March of Dimes was too incompetent or ignorant to know how to manage this situation, they should never have been involved in the first place. If, alternatively, they foresaw these problems but didn’t care until after the backlash, that’s even worse.

    Fact is, March of Dimes has only vaguely apologized for what happened, and has not even admitted what, specifically, they did wrong, or explained how they will keep it from happening in the future. They similarly made no changes whatsoever to management, even after their entire team lead them into an appalling debacle that sabotaged their entire constituency. They’re not sorry this happened, they’re sorry they were caught.

    It’s just not good enough, particularly not when the March of Dimes is such a poorly run organization anyway. Over $20 million in administrative costs? For what? And why do they have a President with no medical training paid more than $600k annually?

    I’m moving on. There’s better things to do with my time and fundraising energy than fund an inefficient (that’s the most charitable view) organization that’s either incompetent at its core mission or didn’t care about selling out its constituents to a pharmaceutical company. I appreciated the opportunity to raise awareness about the issues which affected my own family and I resent the fact that I can’t participate in that anymore without suspecting I’m just part of a marketing scam. Until they offer a real apology, announce real changes for the future, and change the management, I’m out.

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