KV Pharmaceuticals has fought, and failed, on multiple fronts to capitalize on a drug used to prevent preterm births known as Makena.
Now the bankrupt drug maker is turning to Utah Attorney General John Swallow in a bid to strike a Medicaid policy favoring KV's competitors compounding pharmacies that make the drug for pennies on the dollar.
"In violation of Utah law, compounding pharmacies continue to make and distribute large volumes of … copies, or essential copies of Makena," alleged KV vice president Patrick Christmas in a letter preceding a private meeting on Tuesday with Swallow.
Pointing to the deadly meningitis outbreak caused late last year by products compounded by a pharmacy in New England, Christmas suggests Utah should more tightly regulate compounders.
"FDA-approved drugs such as Makena provide a greater assurance of safety and effectiveness than do compounded products," he said, citing a June 2012 FDA statement.
Rex Olsen, an attorney in Swallow's office, characterized the meeting as informational. "It's not a new issue, but they brought up some concerns worth investigating," he said.
But removing Medicaid restrictions on Makena could cost the state more than half-a-million a year, according to data from the Utah Department of Health.
"Your taxes will go up, my taxes will go up and there will be less money for other Medicaid drugs," said Richard Rasmuson, owner of University Pharmacy, one of six specialty pharmacies in Utah that have mixed the drug for years.
Makena, an injectible synthetic version of the hormone progesterone, was first marketed as a generic decades ago by Bristol-Myers Squibb. When Squibb stopped manufacturing it, pharmacies such as Rasmuson's started mixing it for as little as $10 to $15 per injection.
In 2010 KV won exclusive approval from the U.S. Food and Drug Administration to market the injection under the Orphan Drug Act, and the price shot up to $1,500 a dose.
Two years ago KV dropped the price to $690 per injection. With discounts Utah Medicaid could pay under $300, according to a KV spokesman.
But that's still well above the rate charged by compounders, which is why many states, including Utah, require doctors to seek special approval to prescribe Makena to Medicaid patients. They must provide proof that the compounded version caused an allergic or adverse reaction.
Such policies have hurt sales, plunging KV into bankruptcy.
Medicaid filled 390 prescriptions last year, all of them compounded, for an estimated savings of $640,158 over what KV would have charged, not including drug maker discounts.
The FDA, after coming under fire for the price hike, announced in 2011 it would not enforce KV's exclusive rights, especially since most of the cost for development and research was shouldered by others in the past.
KV has been tussling with the FDA ever since, claiming in a lawsuit that the agency abdicated its responsibility to crack down on rogue compounders, which was tossed out by a federal judge.
The company has also sued several states' Medicaid programs, sometimes successfully.
Utah law prohibits compounders from making any prescription drug in doses regularly and commonly available commercially.
Still, Olsen doesn't believe compounding pharmacies are breaking the law.
"We don't want clients getting anything inferior. But in this case, the product has been on the market for years," he said.
Tim Morley, director of Utah's Medicaid pharmacy program, said there have been no safety problems with compounded versions of the drug.
Ray Ward, a family physician who served for years on an advisory committee to Medicaid, said the dispute highlights the undue influence that pharmaceutical companies exert over America's patent system.
"There are several medicines that have been around for years that companies come back and patent and sell at 100 times the original cost," he said. "These are not breakthroughs and they should not be patentable."
What is Makena, and who uses it?
Makena is a synthetic form of the hormone progesterone that first came on the market more than 50 years ago to treat other problems.
It has been shown to calm the muscles of the uterus, preventing preterm labor in women. These very early births produce children who if they survive need months of intensive care and often suffer disabilities.