The company has said that the quality and dosage of its branded drug will be more consistent than the array of alternatives offered in the past. Late Wednesday, KV chief financial officer Tom McHugh, said the drug's cost is justified given the mental and physical problems that come with premature births. Moreover, he said, many doctors are reluctant to prescribe drugs without FDA approval.

"There are probably many moms who go untreated right now for lack of an FDA-approved drug," he said.

Whether the market will bear the company's price remains in question. Under federal law, the secretary of the Health and Human Services Department negotiates rebates for FDA-approved drugs used by Medicaid patients. But each state also sets its own reimbursement rate for these medications. Missouri currently reimburses the use of 17P at $14.69 per shot; Illinois pays $20 per shot. The federal Centers for Medicare and Medicaid Services declined to comment on KV's pricing through a spokesperson.

Monopoly money

The stratospheric price hike would be made possible through the elimination of competitors. The Feb. 4 approval gives KV exclusive rights to market the drug for seven years. Normally, the agency only bestows such monopoly privileges for new and innovative drugs, as a reward for often expensive research.