Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of drugmaker KV Pharmaceutical (NYSE: KV-A) plummeted more than 25% on Wednesday after the Food and Drug Administration said it won't take action against compounders of its pre-term birth drug Makena.

So what: KV seemed determined to take full advantage of its exclusive rights to sell Makena when it raised the price of the drug 100-fold, but the FDA statement suggests that pharmacies will be able to continue marketing a cheaper alternative unperturbed. Of course, the news comes amid ever-increasing outrage from doctors, patients, and politicians toward KV's particularly extreme price hike.

Now what: KV continues to be an uncertain situation. KV management hasn't responded to today's news yet, but you've got to think that there has to be some kind of Makena price reduction coming. Exactly how big of a discount, of course, may end up determining whether today's plunge of more than 25% is under or overdone.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

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