The company: K-V Pharmaceuticals
The drug: Makena
The condition: Preventing premature birth
Sales: K-V reported $5.1 million in revenue for the final quarter of 2011.
K-V Pharmaceuticals became the poster child for drug launch disasters when it rolled out its new treatment to prevent premature births last year. Interested in seeing a tested product on the market, the FDA handed out its benediction. And K-V enthusiastically began selling it for $1,500 a dose, or a whopping $30,000 for a full course.
The problem was that this therapy was already being made by a string of compounding pharmacies for a mere $10 to $20 a dose. Payers had a field day. Matt Salo, the outspoken head of the National Association of State Medicaid Directors, called it "ludicrous and offensive."
As stories about price gouging spread around the country--even as K-V lobbied to get the FDA to shut the compounders down--the FDA publicly sided in favor of the pharmacies. K-V tried to salvage its product with a price cut, down to $595. In some cases, Medicaid can get it for less than $300--20% of the original price. And a federal judge tossed K-V's lawsuit attempting to force the FDA to shut down the competition.
None of the discounting, though, could save K-V from rushing into Chapter 11 for bankruptcy court protection. Forced to miss a $45 million licensing payment owed to Hologic, the original developer sued to get Makena back, saying that K-V "mismanagement" had been to blame for the launch disaster.
K-V, for its part, has been fighting back. Without Makena, creditors will have precious little to look forward to from the company. As it stands, there isn't much upside in any case. K-V's wounds have been largely self-inflicted, making this one of the best examples of a bad launch.
Hologic says K-V 'mismanagement' killing Makena
Loss of Makena suit against FDA compounds KV's problems
KV bargaining with states on price of Makena
KV tries to force states to pay $500 premium for Makena
Escalating problems culminate in K-V Pharmaceutical bankruptcy