K-V Complaint Over Compound Medicine Rejected by U.S. ITC

K-V Pharmaceutical Co. (KVPHQ), a bankrupt maker of women’s health-care products, lost its bid to use a U.S. trade agency to keep competitors from importing versions of a medicine that prevents premature births, after federal drug regulators had refused to stop them.

The U.S. International Trade Commission in Washington, which has the power to block imports, said yesterday it wouldn’t investigate a complaint K-V filed in October. K-V, which blamed lax federal enforcement for its bankruptcy, claims the companies are violating exclusivity rules for the active ingredient in its Makena treatment.

The commission, whose job is to protect U.S. markets from unfair competition, questioned whether it had the authority to investigate the case and to enforce exclusive marketing privileges granted to a drugmaker. Most of the unfair import cases it handles involve allegations of patent infringement.

“K-V’s complaint does not allege an unfair method of competition or an unfair act” under the commission’s authority, the ITC said in a notice posted on its docket. “The commission also notes that the Food and Drug Administration is charged with the administration of the Food, Drug and Cosmetic Act,” the law that K-V claims was violated.

K-V, based in St. Louis, claims that compounding pharmacies are violating a marketing privilege awarded to drugs that treat rare conditions, and which allow the company to sell its product without competition for seven years. Makena was approved in February 2011.

Unapproved Versions

“It most certainly was not Congress’s policy choice to provide this market-based exclusivity incentive, which bars FDA approval of competing safe and effective versions of an approved orphan drug such as Makena, while at the same time condoning the importation and sale of unproven and unapproved versions of the approved orphan drug,” K-V said in a Dec. 3 letter to the agency.

The active ingredient in the drug is made in China and shipped to compounding pharmacies in the U.S.

K-V has made previous attempts to protect its market share from compounders, which are lightly regulated pharmacies that can make versions of brand-name drugs as long as they stick to individual prescriptions unavailable through regular avenues. A federal judge dismissed a lawsuit from K-V in September against the FDA after the agency refused to block compounding pharmacies that made versions of Makena.

Women’s International Pharmacy of Madison, Wisconsin, one of the compounding pharmacies named in the complaint, argued K-V didn’t have the legal authority to bring a case to enforce federal drug law. Wedgewood Pharmacy of Swedesboro, New Jersey, said K-V initially charged $1,500 per dose for a treatment that had been available at less than $20 a dose.

FDA Enforcement

Congress “has expressly committed enforcement of the laws to the FDA,” Women’s International said in a Dec. 10 letter.

K-V filed for bankruptcy court protection in August after saying weak federal enforcement, as well as state Medicaid restrictions, prevented it from attaining the “full value” of Makena, which has the active ingredient hydroxyprogesterone caproate.

K-V attempted to get the FDA to stop compounding pharmacies from selling versions of Makena by producing testing data that called into question the purity and potency of compounded products. The FDA conducted its own testing. It said in June that three of 26 samples failed the standard for potency and no major safety issues were identified.

The FDA said it has discretion to enforce laws against pharmacies to keep them from making versions of approved drugs.

Unfair Trade

The ITC is a quasi-judicial agency in Washington that investigates allegations of unfair trade practices. While the agency can’t award monetary damages like a court, it has the power to block imports of products that infringe U.S. patents or other intellectual property rights.

Other pharmacies, as well as a group of doctors and the March of Dimes, warned an import ban could harm women who rely on the medicine to prevent premature births, which have been linked to problems including cerebral palsy, learning disabilities and breathing difficulties.

In the complaint, K-V named 36 compounding pharmacies, three U.S. distributors and seven China-based manufacturers. The company sought an order to block imports of the active ingredient, also known as 17P, except for shipments by the one company that supplies K-V.

K-V said Dec. 12 it has received $85 million in new financing that it will use to pay a settlement with Hologic Inc. (HOLX) to confirm full ownership of Makena. The financing, settlement and a reorganization plan are subject to approval by a bankruptcy judge.

To contact the reporters on this story: Susan Decker in Washington at sdecker1@bloomberg.net; Anna Edney in Washington at aedney@bloomberg.net

To contact the editors responsible for this story: Reg Gale at rgale5@bloomberg.net; Bernard Kohn at bkohn2@bloomberg.net

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