KV falls on FDA analysis of compounded preterm birth drugs

KV Pharmaceutical Co. (NYSE:KVA) slid $0.30 (29%) to $0.75 on Monday after FDA found no major safety problems in an analysis of compounded hydroxyprogesterone caproate products, which have been used as a cheaper alternative to KV's preterm birth drug Makena hydroxyprogesterone caproate. However, FDA said approved drug products such as Makena "provide a greater assurance of safety and effectiveness than do compounded products." The agency added that it is applying its normal enforcement policies for compounded drugs to compounded hydroxyprogesterone caproate, including prioritizing enforcement to pharmacies that compound harmful or fraudulent products.

In connection with FDA's announcement, CMS issued a statement reminding states of their responsibility to cover FDA-approved products, such as Makena, that qualify as covered outpatient drugs under Medicaid. However, CMS added that states may cover APIs if such coverage is consistent with the state plan. ...