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Mike Stobbe AP Medical Writer
Published: 01 April 2011

ATLANTA (AP) -- The price of an expensive drug to prevent premature births has been cut by more than half, following bitter controversy over its high cost.

KV Pharmaceutical Co. said Friday that it is dropping the price from $1,500 per dose to $690.

The company got government approval in February to exclusively make the drug named Makena, and it hit the market last month. For years, specialty pharmacies had been making a version of the weekly injection for $10 to $20 a dose, so the price of Makena was a shock to doctors who prescribe the drug and private and public insurance programs that pay for it.

Responding to the controversy, the Food and Drug Administration said Wednesday it would not stop pharmacies from making the cheap version. Two days later, the company slashed the price.

KV Pharmaceutical had earlier defended its pricing, saying the company spent millions to meet the requirements for federal approval. Chief executive Gregory J. Divis Jr. had said the $1,500 price was justified to avoid the mental and physical disabilities that can come with very premature births. The cost of care for a preemie is estimated at $51,000 in the first year alone, he said.

But on Friday, he acknowledged prospective buyers of the drug were not happy.

"We understand the concerns that key stakeholders raised under our original pricing structure. We also recognize the current budget challenges facing state Medicaid programs and other payers," Divis said in statement.

Makena is a synthetic form of the hormone progesterone. It was once available commercially but hadn't been sold since the 1990s. Interest was renewed after a 2003 study showed it helps prevent premature birth in women who previously delivered early, and special pharmacies made it to fill prescriptions.

KV had earlier announced a patient assistance program to help uninsured and low-income women get the drug at little or no cost. On Friday, the company announced an expansion of that program and offered to cap costs for state Medicaid agencies and health insurance plans.

"They had to respond, they had to bring the price down, because people were so outraged," said Dr. Kathryn Menard, a University of North Carolina specialist who oversees a state program that has been providing the drug to women at risk for preterm births.

She added that $690 may still be too much. For many obstetricians, the perks of having an FDA-approved drug - including added oversight of the drug's production and better national distribution - may not make up for the high price, she said.

The March of Dimes also issued a statement, announcing it was severing all professional ties with the KV subsidiary that is marketing Makena.

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