Regulatory Focus™ > News Articles > Pharmaceutical Manufacturer Sues FDA Over Use of Enforcement Discretion

Pharmaceutical Manufacturer Sues FDA Over Use of Enforcement Discretion

Posted 06 July 2012 | By Alexander Gaffney, RAC 

Minneapolis-based K-V Pharmaceutical has a problem: its flagship product, Makena, isn't maturing into the cash-generating product the company hoped it would become, leaving the company to face likely financial ruin if its cash-flow situation doesn't improve dramatically within the next few months.

The company's hopes for dramatic change may rest squarely on the success of a lawsuit it filed on 5 June. Reuters reports the company has filed suit against the US Food and Drug Administration (FDA) in the US District Court in Washington, DC (Case #12-01105) seeking to compel the agency to hold pharmaceutical compounders-more than 100 of them, according to K-V-to the same standards as other manufacturers of unapproved drugs.

'Unlawful Competition' Against Makena

K-V alleges FDA is promoting "unlawful competition" against its product by allowing small-scale pharmaceutical compounders to continue to manufacture Makena despite K-V's exclusive rights to market the drug in the US. FDA announced in February 2011 it would exercise "enforcement discretion" to allow compounders to make the drug, but only under certain circumstances.

K-V's lawsuit takes direct aim at FDA's use of enforcement discretion.

The company said in a statement to Regulatory Focus that it is "requesting that FDA be required to stop the widespread manufacturing and distribution of unapproved compounded 17P formulations - the presence of which has resulted in unlawful barriers to access to Makena."

"Unless FDA publicly signals that it will stop the unlawful competition by non-customized compounded drugs … K-V will not be able to attract new capital at a reasonable cost, and is likely to exhaust its working capital within three to six months and be forced to file bankruptcy before then," the company wrote in its complaint. "As a result of FDA's Statement, Makena is being, and will continue to be, widely displaced in the market by compounded [version of Makena, known as 17P]."

The real problem for K-V Pharmaceutical, according to its complaint, is that insurance companies-including Medicaid-will more readily reimburse the compounded version of Makena than they will the version manufactured by K-V. According to the company, its lack of cash flow has left it in a position to run out of cash within the next three to six months unless conditions improve.

The company contends this shouldn't be the case, and points to what it refers to as a "policy update" by FDA in June 2012 in which the agency recommends the use of FDA-approved drugs over their compounded varieties.

"[When] an FDA-approved drug is commercially available, the FDA recommends that practitioners prescribe the FDA-approved drug rather than a compounded drug unless the prescribing practitioner has determined that a compounded product is necessary for the particular patient and would provide a significant difference for the patient as compared to the FDA-approved commercially available drug product," the agency said in a statement.

K-V said in a statement to Regulatory Focus that it is requesting FDA put its policy "into practice and enforce the law in the best interests of pregnant women."

A Long Struggle

The company has been in a struggle with FDA for more than a year after reciving approval for its branded version of the compound 17P for the prevention of premature pregnancy. The compound has been used extensively and at length by doctors looking to prevent pre-term births, but K-V Pharmaceutical took advantage of FDA provisions that allowed it to obtain market exclusivity in return for conducting expensive clinical trials testing on the drug.

The company ignited a firestorm shortly after receiving FDA approval by announcing the cost of 17P, now branded Makena. While 17P used to cost $20 per injection, Makena was announced to cost $1,500 per injection. K-V dropped the cost to $690 per injection after a public outcry and instituted a patient assistance plan to help patients afford the drug, but critics did not seem to be overly mollified and insurers continue to balk at the price.

In a twist, FDA said it would still allow compounders to make the drug on a small scale despite recommending Makena based on its consistent quality. K-V then informed FDA that it had identified samples from compounders that were potentially dangerous to patients, and requested the agency ban compounders from manufacturing Makena.

FDA responded to K-V's concerns in a July 2012 statement, and said it was unable to find any substantial quality problems in the drugs provided by K-V. As a result, FDA said it would continue to allow small-scale compounding to occur. (See: Regulatory Focus' 18 June 2012 Story: 'FDA Maintains Compounding Exemption for KV Pharmaceuticals' Makena')

The agency then put out a Question-and-Answer document on 29 June 2012 in which it further stated it may take enforcement action against compounding pharmacies "if warranted," but presumably only if compounders had quality issues or exceeded "the scope of traditional pharmacy compounding."

In a statement to Reuters, FDA said it does not respond publicly to pending litigation and had no comment.

Read more:

Reuters - K-V sues FDA over Makena in fight for survival

K-V Pharmaceutical

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