KV Pharmaceutical

KV Pharmaceutical Company (KV) was an American drug company that brought generic and non-branded pharmaceutical products to the market. Headquartered in St. Louis, Missouri, it had research and manufacturing facilities, as well as marketing and sales operations, the latter activities conducted through its subsidiaries, Ther-Rx Corporation and Nesher Pharmaceuticals Inc.[1]

Background

KV was founded by Bob Keith and Victor Hermelin in 1942 who ran the company until 1975, when he was replaced by his son Marc.[2] Marc Hermelin was ousted in 2008 when a Food and Drug Administration (FDA) inspection took place. The following year KV, convicted of felony charges for the "making, marketing, and distribution of adulterated and unapproved drugs", was shut down by the FDA.[3] After a proxy fight, Marc Hermelin returned to the company's board.[2] Between 2008 and 2010, KV lost three-quarters of its workforce, down to 350.[2]

Makena pricing controversy

In February 2011, the FDA granted approval to KV for "Makena" (hydroxyprogesterone caproate or OHPC) for the prevention of premature birth in women with a single fetus of less than 37 weeks gestation who had at least one previous preterm birth.[5] For many years, however, OHPC had been available and used by obstetricians "off label". Before the release of Makena, the drug was compounded by pharmacies for $15, or less, per injection. Typically 15 to 20 injections are given over a treatment course, costing a total of $225 to $300.[4] With the FDA approval of Makena as an orphan drug, KV received the exclusive right to sell the drug for seven years. KV boosted its price by a factor of 100, to $1,500 per injection, or about $25,000 per treatment.[4]

The pricing policy of KV was heavily criticized as it substantially increased medication cost and removed less expensive alternatives.[4] KV indicated that the cost of taking care of a premature birth at about $51,000 justified the cost of the medication, and that a system would be in place to enable patients without means to obtain it.[4] Thus, expenses would essentially fall on the public sector and insurance carriers. A number of physician organizations have opposed the pricing policy of the company[6] as did the March of Dimes that supported the arrival of Makena.[7] The FDA commissioner, Margaret Hamburg, said that the agency was not in a position to influence pricing. Concerned about price gouging, two sSenators, Amy Klobuchar (D-Minn.) and Sherrod Brown (D-Ohio), indicated that they planned to initiate hearings with the Federal Trade Commission about KV's conduct.[7] The controversy spawned protests like the "Shame on You KV Pharmaceutical and CEO Greg Divis" Facebook page.[8]

By the end of March 2011, the FDA announced that pharmacies compounding the drug independently would not face legal reprisal, thus enabling the price of the drug to remain in the $10–20 range.[9] After this announcement, K-V's stock dropped by more than 60% on March 30, 2011, and the company cut the price of Makena to $690 per dose.[10]

traded as	nyse: KVA nyse: KVB
foundation	1942
founder	Bob Keith and Victor Hermelin
location	St. Louis, Missouri, U.S.
key people	Greg Divis, CEO
industry	Pharmaceuticals
homepage	www.kvpharmaceutical.com

Background

Makena pricing controversy

Bankruptcy and acquisition

Products

Ther-Rx Corporation

Nesher Pharmaceuticals

References