Inflated Drug Price Lands Pharma Company in Social Media Crisis

A Missouri-based drug maker appears frozen in the headlights after its decision to pump up the price of a drug meant to prevent premature births spawned widespread criticism and a popular anti-KV Pharmaceutical Facebook page.

The company’s decision to jack up prices for the drug to $1,500 per injection is also Exhibit A in how drug makers contribute to health care’s exorbitant costs. Here’s the background on the story from the St. Louis Post-Dispatch (emphasis mine):

The Bridgeton-based drug company did not invent the drug it now calls Makena, but recently obtained exclusive marketing rights as part of its long-awaited approval by the Food and Drug Administration. The same drug has been sold for years through wholesale pharmacies under the label 17P. And a growing number of doctors had prescribed 17P to prevent preterm births long before Makena’s approval.Until now, 17P has often cost less than $15 per shot and at times has sold for as low as $5.

KV’s pricing plan illustrates the risk-reward bets by drugmakers in the protracted and expensive FDA approval process, and their link to soaring health care costs. Although 17P has been promoted as a cost saver, KV’s pricing for Makena could actually increase the costs associated with preterm births and reduce women’s access to the drug. A full treatment of 15 to 20 shots would typically run $25,000.

(…)

Health considerations aside, treating 1,000 women at that price would cost at least $25 million and only prevent an estimated one-third of preterm births, according to a 2003 clinical trial. The average cost of an early birth, meanwhile, runs about $51,000 (about 10 times more than a normal birth), according to KV officials – bringing the total medical costs to nearly $61 million. That’s about $10 million more than if the same group of 1,000 women never took the drug, and all had preterm births.

In addition to generating negative media attention (more here), opponents of the company’s marketing plan launched a scathing Facebook “fan” page. Since launching barely a week ago, the site has drawn nearly 600 “likes,” including from some doctors.

“Why a Facebook page? Let’s harness the power of social media,” the group writes. “Maybe if we stand together and make a statement that this self-serving greed is exploiting families in their darkest moments, perhaps someone will notice. Perhaps someone will care.”

It’s hard enough to know what exactly the company was thinking when it announced its pricing plan, and it’s equally hard to see how it will wiggle its way out of this public relations mess after letting it rage unanswered for a week. The company is finding out the hard way how social media has knocked down the divide between business and consumers.

“Whilst traditional communications processes might have been adequate for most public relations challenges in the conventional world of the established media, social media has completely changed the rules of engagement,” Daniel Ghinn writes for Creation Healthcare. “And consumers are not playing by the same rules assumed by pharmaceutical company crisis management plans based on traditional media.

“The reach and speed of a platform like Facebook completely change the environment in which corporate and brand communicators operate.”

My guess is KV is burning up the phone lines right now getting quotes from crisis-response PR firms.

Update: Here’s a video sent to us by Dr. Mitchell Dombrowski, chief of Obstetrics and Gynecology at St. John Hospital in Detroit:

Sven Gustafson

About Sven Gustafson

Sven Gustafson is a senior writer in the Office of the President at Blue Cross Blue Shield of Michigan. He enjoys food, running, soccer and exploring Detroit and Michigan at large.
 
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3 Comments

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  1. Dryovage 3 years ago

    Dr. Dombrowski, I used to call on you and the physicians and residents underneath you when I worked for that company. They have been involved in all kinds of unethical practices. Thus one tops the cake. I am so happy to not work there anymore. I am happy you made this video. Good luck.

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  2. Sven Gustafson 3 years ago

    Hi Dryovage,

    Thanks for leaving a comment. I’ll see if I can pass it along to Dr. Dombrowski, whom I’ve never met.

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  3. William Price 3 years ago

    Well, if pharmaceuticals will be increasing their product prices, then this might be a big problem for the consumers. I don’t know but medicine is one of the staple needs of consumers all over the world. Now, if the prices would go up, then the people who are depending on cheap medicine will be affected.

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