Old Drug, New Price

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Old Drug, New Price

Chicago Tribune – The federal Food and Drug Administration's announcement that it had approved a drug that helps prevent premature births sounded like cause for celebration. The March of Dimes applauded. So did Wall Street: The drug's manufacturer, St. Louis-based KV Pharmaceutical, saw its stock jump 30 percent. That was before women and their doctors learned that an injection that used to cost $10 to $20 now would cost $1,500.

That's right: A drug already in wide use suddenly costs 100 times as much because it carries the FDA stamp of approval. KV is gaming the regulatory system to gouge patients, insurance companies and Medicaid for potentially billions of dollars per year.

FDA approval gives KV exclusive rights to market the drug for seven years — at whatever price it can get. That arrangement is meant to encourage pharmaceutical companies to invest in the lengthy, expensive and risky business of bringing a new drug to market.

But in this case, most of that work had already been done — and paid for largely by taxpayers. The drug, approved in 1956 to treat problems with adrenal glands and ovaries, had long been prescribed off-label to guard against premature birth. When its manufacturer stopped making it in 2000, doctors turned to compounding pharmacists, who essentially make it to order.

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