| Type | Public NYSE: KV.A/KV.B |
|---|---|
| Industry | Pharmaceuticals |
| Founder(s) | Victor Hermelin, 1942 |
| Headquarters | St. Louis, Missouri |
| Key people | Greg Divis, CEO |
| Website | [1] |
KV Pharmaceutical Company (KV) is an American drug company that brings generic and non-branded pharmaceutical products to the market. Headquartered in St. Louis, Missouri, it has 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]
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KV was founded by 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 an 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 Food and Drug Administration (FDA).[3] After a proxy fight, M. Hermelin returned to the company's board.[2] Between 2008 and 2010, KV lost three-quarters of its workforce, down to 350.[2] KV was reapproved for manufacturing drugs in 2010, while its Ethex manufacturing subsidiary was sold.[4]
Rather than developing new molecular entities, KV researches different modes of drug delivery. It developed bioadhesive drug delivery where molecules adhere to wet sites such as a mucosa (example Clindesse), and is investigating quick-dissolving and controlled-release drug venues.
In February 2011, U.S. Food and Drug Administration (FDA) granted approval to KV for "Makena" (17-hydroxyprogesterone caproate or 17OHPC) 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, 17OHPC had been available and used by obstetricians "off label". Prior to the release of Makena, the drug was made available by pharmacies that compounded the agent for $15 or less per injection (typically 15 to 20 injections are given over a treatment course).[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][6] KV indicated that the cost of taking care of a premature birth is about $51,000 justifying the cost of the medication, further, a system would be in place to enable patients without means to obtain the medication.[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[7] as did the March of Dimes that supported the arrival of Makena.[8] The FDA commissioner Margaret Hamburg stated that the agency was not in a position to influence pricing. Concerned about price gouging, two Senators, Amy Klobuchar (D-Minn.) and Sherrod Brown (D-Ohio) indicated that they plan to initiate hearings with the Federal Trade Commission about KV's conduct.[8]
By the end of March the FDA announced that pharmacies compounding the drug independently will 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,[10] and the company cut the price of Makena to $690 per dose.[11]