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K-V Pharma's Makena could face more sales, pricing pressure if upcoming generic gets off-label use - experts BioPharm Insight
• McGuff Pharma pursuing Delalutin ANDA, indications such as management of amenorrhea and abnormal uterine bleeding
• Makena’s USD 10 patient copay is positive but actual cost to insurers may be higher compared to generic
• FDA has completed compounded 17P sample review, decision expected soon, FDA official says
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K-V Pharmaceutical’s (NYSE:KV.A) Makena for preterm birth will be challenged with a forthcoming generic that is the active ingredient of its drug, said consultants and physicians. They noted that price parity to the generic may not make up for cost to insurers.
A new competitive threat comes in the form of McGuff Pharmaceuticals’ filing for an abbreviated new drug application (ANDA) of a generic form of Delalutin (hydroxyprogesterone caproate) injection, industry experts said. The company filed a generic submission 12 October 2009 and it typically takes the agency 36 months to review and approve generic filings, said Damon Jones, McGuff’s vice president of operations. He said he expected the review to be done by the end of the year, adding that there is no indication that it’s not approvable.
K-V declined to comment on McGuff's generic Delalutin plans and any potential impact on Makena.
The FDA approved Makena in February 2011 but a version of the drug’s active ingredient - hydroxyprogesterone caproate - has been available for many years through pharmacy compounding as 17P. After FDA approval, its list price, which is much higher than the compounded version, drew Democrats’ wrath. At one time the price was about USD 1500 per Makena injection versus USD 10 to USD 20 per injection for a compounded version. K-V has since lowered the price to USD 690 per injection.
A K-V spokesperson said the company has extended substantial supplemental discounts to payers, and patients have affordable access to Makena. More than 250 commercial payers are covering Makena and the average copay for Makena is less than USD 10 per injection, which is less than or equal to compounded 17P, the spokesperson said. KV will continue to provide Makena at no out-of-pocket cost to uninsured women through its financial assistance programs, the spokesperson added.
McGuff’s drug should be on the market soon after approval, Jones added, noting that it will be competitively priced. Bristol-Myers Squibb (NYSE: BMY) originally sold the drug to non-pregnant women for the treatment of advanced adenocarcinoma of the uterine corpus (Stage III or IV); in the management of amenorrhea and abnormal uterine bleeding; as a test for endogenous estrogen production; and for the production of secretory endometrium and desquamation.
BMS requested the drug’s removal in 1999 and in 2000 the agency withdrew the new drug application. The agency clarified in a 2010 citizen petition that Delalutin was not withdrawn for reasons of safety or efficacy, and the FDA can approve ANDAs for hydroxyprogesterone caproate. McGuff’s ANDA seeks approval for the original Delalutin indications, Jones said, and noted the company will not promote off-label use. The company became involved in hydroxyprogesterone caproate clinical trials since 2004, long before Makena entered the market, he noted.
The agency approved Makena under the auspices of the Orphan Drug Act, which means KV Pharma was granted seven years of market exclusivity for the preterm birth indication.
The low patient copay is positive, but the cost-shifting onto insurers means that McGuff’s generic poses competitive risk, said a drug industry and reimbursement consultant. She added that pharmacists prefer to first dispense a compounded product, then a generic and then brands in order at which they are paid most.
A gynaecologist agreed that cost-shifting to insurers is the largest issue. “Someone is paying for the drug even if the copay is just USD 10,” he said. If Delalutin is priced well below Makena, it would be preferred, he added.
The USD 10 copay is less expensive than a typical generic copay, said a second reimbursement consultant, but pharmacists are inclined to dispense generics because their software shows them as brand alternatives. Most payers do not know what a drug is prescribed for when reimbursement requests come through unless there are safety risks, so it is probable that off-label Delalutin use will happen, he added.
Current generic drug laws would effectively promote that McGuff’s drug can pick up all the indications for Delalutin as a less-expensive option, noted a drug industry consultant and former ex-FDA official.
The expected switch from Makena to off-label Delalutin is exacerbated by some states where pharmacies can make substitutions where they deem appropriate, noted a second drug industry consultant and ex-FDA generics drug official.
The gynaecologist called Makena’s USD 10 copay “typical” in the US depending on the insurance plan. A second gynaecologist added Delutin’s off-label use for preterm birth would depend on its price, and assuming it is cheaper than Makena, will be used over Makena. If Delalutin is less than USD 100 a shot, it will be used over the compounded drug, he added.
K-V will likely contest that Makena is the "only branded on-label drug" and fight for formulary position based on that, the third consultant added. It is possible that K-V might also try to get insurers to put off-label drugs on prior authorization citing safety concerns, she noted.
But prior authorization for generics is extremely rare unless there is significant misuse or off-based pricing, said the first reimbursement consultant.
This news service reported earlier this year that the FDA would soon make a decision on how Makena stacked up in purity and potency to compounded ingredients. In October 2011, K-V submitted data to the agency which showed variability in the purity and potency of bulk active pharmaceutical ingredients and compounded hydroxyprogesterone caproate.
FDA’s drug center Director Janet Woodcock intimated recently at a conference held by the Marwood Group that FDA had finished the sample analysis and “something would happen soon,” said a source familiar. This news service has previously reported that it is unlikely the FDA would ban compounding.
An FDA spokesperson could not immediately comment.
The second reimbursement consultant noted the caveat to McDuff’s drug success could be if Makena decides to file suit for inducing infringement. He said there have been cases where a generic enters the market and the brand files suit even if the former has been approved for different indication.
Approval of the generic could further hamper the company's ability to raise capital, reported sister publication Debtwire. Holders of K-V’s USD 200m 2.5% convertible notes due 2033 have organized an ad hoc group under financial advisor Duff & Phelps and legal counsel Stroock & Stroock & Lavan. The convert holders recently moved to organize in anticipation of the drugmaker’s upcoming USD 45m mandatory payment to Hologic (NASDAQ: HOLX), which could put the company in a liquidity squeeze, the service reported.
K-V’s market cap is USD 65.27m.
by Jennifer C. Smith-Parker in Washington, DC and Surani Fernando in London
K-V Pharma's Makena could face more sales, pricing pressure if upcoming generic gets off-label use - experts BioPharm Insight
• McGuff Pharma pursuing Delalutin ANDA, indications such as management of amenorrhea and abnormal uterine bleeding
• Makena’s USD 10 patient copay is positive but actual cost to insurers may be higher compared to generic
• FDA has completed compounded 17P sample review, decision expected soon, FDA official says
________________________________________
K-V Pharmaceutical’s (NYSE:KV.A) Makena for preterm birth will be challenged with a forthcoming generic that is the active ingredient of its drug, said consultants and physicians. They noted that price parity to the generic may not make up for cost to insurers.
A new competitive threat comes in the form of McGuff Pharmaceuticals’ filing for an abbreviated new drug application (ANDA) of a generic form of Delalutin (hydroxyprogesterone caproate) injection, industry experts said. The company filed a generic submission 12 October 2009 and it typically takes the agency 36 months to review and approve generic filings, said Damon Jones, McGuff’s vice president of operations. He said he expected the review to be done by the end of the year, adding that there is no indication that it’s not approvable.
K-V declined to comment on McGuff's generic Delalutin plans and any potential impact on Makena.
The FDA approved Makena in February 2011 but a version of the drug’s active ingredient - hydroxyprogesterone caproate - has been available for many years through pharmacy compounding as 17P. After FDA approval, its list price, which is much higher than the compounded version, drew Democrats’ wrath. At one time the price was about USD 1500 per Makena injection versus USD 10 to USD 20 per injection for a compounded version. K-V has since lowered the price to USD 690 per injection.
A K-V spokesperson said the company has extended substantial supplemental discounts to payers, and patients have affordable access to Makena. More than 250 commercial payers are covering Makena and the average copay for Makena is less than USD 10 per injection, which is less than or equal to compounded 17P, the spokesperson said. KV will continue to provide Makena at no out-of-pocket cost to uninsured women through its financial assistance programs, the spokesperson added.
McGuff’s drug should be on the market soon after approval, Jones added, noting that it will be competitively priced. Bristol-Myers Squibb (NYSE: BMY) originally sold the drug to non-pregnant women for the treatment of advanced adenocarcinoma of the uterine corpus (Stage III or IV); in the management of amenorrhea and abnormal uterine bleeding; as a test for endogenous estrogen production; and for the production of secretory endometrium and desquamation.
BMS requested the drug’s removal in 1999 and in 2000 the agency withdrew the new drug application. The agency clarified in a 2010 citizen petition that Delalutin was not withdrawn for reasons of safety or efficacy, and the FDA can approve ANDAs for hydroxyprogesterone caproate. McGuff’s ANDA seeks approval for the original Delalutin indications, Jones said, and noted the company will not promote off-label use. The company became involved in hydroxyprogesterone caproate clinical trials since 2004, long before Makena entered the market, he noted.
The agency approved Makena under the auspices of the Orphan Drug Act, which means KV Pharma was granted seven years of market exclusivity for the preterm birth indication.
The low patient copay is positive, but the cost-shifting onto insurers means that McGuff’s generic poses competitive risk, said a drug industry and reimbursement consultant. She added that pharmacists prefer to first dispense a compounded product, then a generic and then brands in order at which they are paid most.
A gynaecologist agreed that cost-shifting to insurers is the largest issue. “Someone is paying for the drug even if the copay is just USD 10,” he said. If Delalutin is priced well below Makena, it would be preferred, he added.
The USD 10 copay is less expensive than a typical generic copay, said a second reimbursement consultant, but pharmacists are inclined to dispense generics because their software shows them as brand alternatives. Most payers do not know what a drug is prescribed for when reimbursement requests come through unless there are safety risks, so it is probable that off-label Delalutin use will happen, he added.
Current generic drug laws would effectively promote that McGuff’s drug can pick up all the indications for Delalutin as a less-expensive option, noted a drug industry consultant and former ex-FDA official.
The expected switch from Makena to off-label Delalutin is exacerbated by some states where pharmacies can make substitutions where they deem appropriate, noted a second drug industry consultant and ex-FDA generics drug official.
The gynaecologist called Makena’s USD 10 copay “typical” in the US depending on the insurance plan. A second gynaecologist added Delutin’s off-label use for preterm birth would depend on its price, and assuming it is cheaper than Makena, will be used over Makena. If Delalutin is less than USD 100 a shot, it will be used over the compounded drug, he added.
K-V will likely contest that Makena is the "only branded on-label drug" and fight for formulary position based on that, the third consultant added. It is possible that K-V might also try to get insurers to put off-label drugs on prior authorization citing safety concerns, she noted.
But prior authorization for generics is extremely rare unless there is significant misuse or off-based pricing, said the first reimbursement consultant.
This news service reported earlier this year that the FDA would soon make a decision on how Makena stacked up in purity and potency to compounded ingredients. In October 2011, K-V submitted data to the agency which showed variability in the purity and potency of bulk active pharmaceutical ingredients and compounded hydroxyprogesterone caproate.
FDA’s drug center Director Janet Woodcock intimated recently at a conference held by the Marwood Group that FDA had finished the sample analysis and “something would happen soon,” said a source familiar. This news service has previously reported that it is unlikely the FDA would ban compounding.
An FDA spokesperson could not immediately comment.
The second reimbursement consultant noted the caveat to McDuff’s drug success could be if Makena decides to file suit for inducing infringement. He said there have been cases where a generic enters the market and the brand files suit even if the former has been approved for different indication.
Approval of the generic could further hamper the company's ability to raise capital, reported sister publication Debtwire. Holders of K-V’s USD 200m 2.5% convertible notes due 2033 have organized an ad hoc group under financial advisor Duff & Phelps and legal counsel Stroock & Stroock & Lavan. The convert holders recently moved to organize in anticipation of the drugmaker’s upcoming USD 45m mandatory payment to Hologic (NASDAQ: HOLX), which could put the company in a liquidity squeeze, the service reported.
K-V’s market cap is USD 65.27m.
by Jennifer C. Smith-Parker in Washington, DC and Surani Fernando in London