Rent seeking: FDA outlaws competition, price jumps from $10 to $1,500

[KBCraig]

ATLANTA—The price of preventing preterm labor is about to go through the roof.

A drug for high-risk pregnant women has cost about $10 to $20 per injection. Next week, the price shoots up to $1,500 a dose, meaning the total cost during a pregnancy could be as much as $30,000.

That's because the drug, a form of progesterone given as a weekly shot, has been made cheaply for years, mixed in special pharmacies that custom-compound treatments that are not federally approved.

But recently, KV Pharmaceutical of suburban St.Louis won government approval to exclusively sell the drug, known as Makena (Mah-KEE'-Nah). The March of Dimes and many obstetricians supported that because it means quality will be more consistent and it will be easier to get.

None of them anticipated the dramatic price hike, though -- especially since most of the cost for development and research was shouldered by others in the past.

http://www.boston.com/news/local/massachusetts/articles/2011/03/10/preemie_birth_preventive_spikes_from_10_to_1500/

[KBCraig]

Oh, and if "March of Dimes and many obstetricians" wanted improved quality control, it sounds like they really backed the right horse here:

http://www.kmov.com/news/local/Former-KV-Pharmaceutical-CEO-pleads-guilty-to--117773374.html

Former KV Pharmaceutical CEO pleads guilty to misbranding drugs
KMOV.com
Posted on March 10, 2011 at 7:38 PM

Updated today at 8:18 PM

ST. LOUIS (KMOV) – Former KV Pharmaceutical CEO Mark Hermelin pleaded guilty Thursday to two federal charges of misbranding drugs.

Hermelin, 69, was sentenced to one month in prison and a one million dollar fine.  He will also pay a $900,000 forfeiture to the United States as part of a plea agreement.

According to documents filed with the U.S. Attorney's office, KV manufactured generic prescription drugs under Hermelin's leadership

From 2006-2008, Hermelin decided to increase the company's production of morphine sulfate, an analgesic pain relief drug and opiate, on a daily and annual basis.

During that time, KV's drug production increased approximately 182 percent. KV's internal manufacturing controls also discovered oversized and irregular tablets of several different types of drugs, and also received consumer complaints about the oversized and irregularly shaped tablets.

In Hermelin's plea agreement, he admitted that during the summer of 2008, KV shipped two oversized morphine tablets to retailers in San Francisco, California and Canada.  The drugs' labeling was false and misleading because it stated that the drugs were of uniform strength when the tablets of the drugs were oversized and contained more of the active ingredient of the drug than what was specified on the labels.

The California morphine tablet weighed over twice the specified amount, while the Canada morphine tablet was 65 percent stronger than what the label claimed.

[Raineyrocks]

ATLANTA—The price of preventing preterm labor is about to go through the roof.

A drug for high-risk pregnant women has cost about $10 to $20 per injection. Next week, the price shoots up to $1,500 a dose, meaning the total cost during a pregnancy could be as much as $30,000.

That's because the drug, a form of progesterone given as a weekly shot, has been made cheaply for years, mixed in special pharmacies that custom-compound treatments that are not federally approved.

But recently, KV Pharmaceutical of suburban St.Louis won government approval to exclusively sell the drug, known as Makena (Mah-KEE'-Nah). The March of Dimes and many obstetricians supported that because it means quality will be more consistent and it will be easier to get.

None of them anticipated the dramatic price hike, though -- especially since most of the cost for development and research was shouldered by others in the past.

http://www.boston.com/news/local/massachusetts/articles/2011/03/10/preemie_birth_preventive_spikes_from_10_to_1500/

Wow, sadly hardly anything surprises me anymore.  Is this what would be called a monopoly?  I just want to see if I understand that concept correctly. 

[littlehawk]

new ad for expecting Mothers:               

FREE SERVICE

Have boiling water and good hands, WILL DELIVER.   

[KBCraig]

Is this what would be called a monopoly?  I just want to see if I understand that concept correctly. 

Yes.

The irony is that the government prosecutes businesses for being "monopolies", when the truth is only the government can create monopolies by outlawing competition.

[ShortyLong]

Yes.

The irony is that the government prosecutes businesses for being "monopolies", when the truth is only the government can create monopolies by outlawing competition.

So true. Excellent KB

[MaineShark]

Have boiling water and good hands, WILL DELIVER.   

You know, I've never actually boiled water for a birth.  Except a small amount, to make some tea, afterward.

Joe

[KBCraig]

U.S. catfish farmers, who have never been under USDA controls, won strict inspections and controls by USDA in an attempt to block their Asian competitors.

Oops.

http://finance.yahoo.com/news/Catfish-wars-heat-up-over-apf-2648816717.html

But in a lesson on being careful what you ask for on Capitol Hill, the move may be backfiring, and the domestic industry could soon be trying to undo what it accomplished just a few years ago. In a worst-case scenario, the domestic farmers could end up stuck with the tougher new inspections while the imports they were hoping to suppress are left with the status quo.

Doesn't anyone ever learn the lesson that protectionism ultimately destroys the industry it's supposed to protect?

[Raineyrocks]

Is this what would be called a monopoly?  I just want to see if I understand that concept correctly. 

Yes.

The irony is that the government prosecutes businesses for being "monopolies", when the truth is only the government can create monopolies by outlawing competition.

Thanks, I thought so.    Really, your so right with what you wrote here too!