What Can Be Learned From The Biggest Drug Launch Disasters?

Launching any product in the life science market, whether that takes the form of medical technology, a health aid or a medicine itself, requires a level of care, consideration and mindfulness of the market beyond what may be expected in other areas.

This is especially true in the United States, where the economics of drug discovery, where pharmaceutical manufacturers aim to make their research and development costs back during the exclusivity period that allows them and only them to sell it.

This need for profitability has to be balanced with the optics of ensuring that everyone who needs a particular medication has ready access to it, and this leads to the complex drug launch disaster that was KV Pharmaceutcal’s Makena.

Known generically as hydroxyprogesterone caproate or OHPC, Makena was a medication prescribed to reduce the risk of premature birth in pregnant women determined to be at risk and was approved by the FDA as an “orphan drug” that KV would have the exclusive rights to for seven years.

The problem was that OHPC had been sold in the United States since 1956 under the name Delalutin until it was withdrawn from the US market in 1999. However, it had for 12 years been used “off-label” and sold for as little as $15 per injection.

With KV’s exclusivity rights to Makena, they increased the price 100-fold, making the total treatment cost between $22,500 and $30,000, leading to accusations of price gouging, an accusation that intensified when KV lobbied to try and get “off-label” compounders prosecuted.

After just a month of being on the market, the FDA announced in favour of pharmacies, meaning that Makena was competing with pharmacies charging 100 times less for the same drug.

KV swiftly cut the price to $690 per dose, but by this point, it was far too late. Within 18 months they filed for bankruptcy, and the drug they had attempted to sell was itself withdrawn from the market in 2023.