Thanks to the FDA, a company has been granted exclusive rights to produce a drug that helps prevent premature births. This new monopoly power for KV Pharmaceuticals to make and sell progesterone is giving it the power to price the drug at $1,500, which is a bit off its current market price of $10 to $15.
You’re probably thinking that KV is setting such a high price to recoup the money it had to invest in R&D, testing, etc. but according to Dr. Kevin Ault, “All the upfront development of the drug was done by the National Institute of Health. You and I paid for that with our tax dollars, it’s not like this pharmaceutical company is trying to recoup its investments in research and development, as is usually the reason for the price of new drugs.”
The importance of this drug cannot be overstated for women who have a history of preterm births. One woman is “a month further along than she was when her first child was born” with the help of progesterone, while another woman “carried two daughters full term.”
The ridiculously inflated price–“an estimated $30,000 in total per pregnancy”–is a concern for women who simply cannot afford it or don’t have insurance. Even if they have insurance, will their carriers cover it?
KV Pharmaceutical is definitely taking advantage of its monopoly power, and then some.
The first rule of monopoly club is to gouge people. The second rule of monopoly club is to gouge people.