WASHINGTON (Reuters) - K-V Pharmaceutical Co is suing the U.S. Food and Drug Administration for not cracking down on compounded versions of its premature birth drug Makena, in a last-ditch fight for the company's survival.

Makena is an injectable hormonal medicine that reduces the risk of pre-term birth in women who have already delivered early in the past. K-V got approval to sell Makena last year, giving it a new lease on life after it was barred from making and marketing its own drugs due to repeated manufacturing problems.

But pharmacies had already been compounding a similar, and far cheaper, drug for years for people who had a prescription from a doctor. They use the active ingredient hydroxyprogesterone that has been available on the market without formal FDA clearance.

In its lawsuit, K-V said the FDA was addressing the financial concerns of insurance companies that cover the cost of medications instead of the needs of patients in declining to stop pharmacies from making cheaper versions of the Makena drug. By law, the FDA is only allowed to make decisions based on science, not cost.

K-V said Makena's sales are not enough for the company to satisfy its creditors, and it would go bankrupt within three to six months if the FDA failed to act, according to the lawsuit filed on Thursday in the U.S. District Court for the District of Columbia.

FDA spokeswoman Sarah Clark-Lynn said the agency does not comment on pending litigation.

Shares of K-V closed up 2.2 percent at 65 cents on the New York Stock Exchange, above the 45 cents it hit last week, but still a fraction of its value of over $3 a year ago.


The FDA normally issues warning letters to distributors of unapproved drugs, or may seize their products.

The FDA recently launched a drive to remove all unapproved drugs from the market due to safety issues, and encouraged companies to apply for formal clearance, but has not taken a hard line against the pre-term birth medications.

Patients and insurers preferred the pharmacy compounds, which cost $10 to $20 per injection versus the $1,500 K-V initially sought to charge for Makena after it was approved in February 2011.

K-V reportedly tried to stop pharmacies from compounding the drug by sending them letters saying they were violating the law and threatening to sue them.

But the FDA said it would take no action against pharmacies that offered the cheaper product, following complaints from U.S. lawmakers and health insurers that K-V was price-gouging for a drug already available on the market. K-V then slashed the price of Makena by 55 percent to $690.

K-V still argued that the older pharmacy compounds were not as safe or effective as Makena, as pharmacies don't need to meet the same manufacturing, safety and efficacy guidelines.

The FDA agreed in November to look into the issue, inspecting 16 samples of the compounded drug and of its active ingredient. In an announcement last month, the health regulator said these versions of Makena posed no major safety risks, though they contained some impurities.

"Although the analysis of this limited sample ... did not identify any major safety problems, approved drug products, such as Makena, provide a greater assurance of safety and effectiveness than do compounded products," it said at the time.

The agency also said it was applying its "normal enforcement policies" in declining to stop the compounding pharmacies from making Makena, as it focuses its actions on products that are fraudulent or likely to cause harm.

The case is K-V Pharmaceutical Company v. FDA, U.S. District Court, District of Columbia, No. 12-01105.