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Goodbye to the ADHD Patch: After 9 Recalls and a Federal Probe, Shire Gives Up

ADHD: No patch, no problem.
Back in December, I suggested that Shire (SHPGY) should ditch Daytrana, its ADHD patch for kids, because the liners on the device malfunctioned so frequently that the product was recalled eight different times. Customers had difficulty peeling the backs off the patches.

Shire confessed in its annual report that a ninth Daytrana product recall occurred in January and that -- along with a September subpoena from federal prosecutors into Daytrana's marketing --- appears to be the final straw: Shire is giving up on Daytrana.

Why did Shire take so long to figure out that Daytrana wasn't going to work when problems on it arose as early as 2008? One theory is that this is an example of that infamous management bugbear, the fallacy of sunk costs. Having committed to marketing the drug, Shire's management felt psychologically unable to spike the product even though it only earned $16.3 million in revenues per quarter.

Daytrana -- yes, that's really its name; say it out loud for a clue as to how it's supposed to work -- was also the only ADHD medicine available if your kid didn't want to take a pill. The drug industry regards non-pill alternatives as a sort of holy grail. But as I've noted frequently on BNET, patches are often an unreliable way to deliver medicine compared to pills and injections.

Noven (NOVN) CEO Jeffrey Eisenberg says he's "excited" to re-acquire his company's global rights to Daytrana, and that the product will be relaunched in the U.S. in 2011. I don't know what he's excited about -- the European drug authorities looked askance at the thing back in March.

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