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What: Shares of drugmaker KV Pharmaceutical
So what: KV has been criticized for its move to raise the price of Makena, an injection used to prevent premature births, from $10 to $1,500, but yesterday, U.S. Sens. Amy Klobuchar, D-Minn., and Sherrod Brown, D-Ohio, turned up the heat. In a letter Thursday to the Federal Trade Commission, the two urged an investigation into what they deemed price gouging from KV, concerned that the actions "will result in diminished access to appropriate health care for women and result in increased preterm births."
Now what: I'd be cautious about pouncing on today's pullback. Even with the recent wave of backlash, KV shares are still up a staggering 450% since receiving approval for Makena last month. With the negative sentiment toward KV -- whether justified or not -- only getting stronger, the downside seems just too big at this point.
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