Agile Therapeutics had to resubmit its Twirla application twice...

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47 million

Number of women in the U.S. that use contraception, according to the CDC

Daily hormonal pills can have side effects ranging from mood swings and nausea to increased risks of blood clots and cancer. IUDs have to be implanted by doctors, in sometimes painful (and usually unanesthetized) procedures. Condoms are cheap and easy to get, but they require trusting one’s partner to use them correctly. These imperfect choices help explain why 45% of all pregnancies are still unplanned—upending women’s lives, costing the government an estimated $21 billion in public spending every year, and contributing to a horrific U.S. maternal mortality rate that falls especially heavily on Black women.

Now that the Supreme Court has overturned Roe v. Wade, effectively banning abortion in at least 13 states and opening the door to national restrictions on medication abortion, increased access to all kinds of birth control is more important than ever. Yet the field is “constantly under-invested in,” says Gandal-Powers. It’s a familiar story in women’s health: Even though women make approximately 80% of health care purchasing decisions, and account for more than half the population, the (mostly male) investment community shies away from products seen as “niche.”

Today, Big Pharma has largely abandoned women’s health, spending only 1% of all R&D investment on female-specific conditions other than cancer. In birth control specifically, large companies have mostly stopped developing new products after seeing their profits sapped by cheaper generics.

It all adds up to a huge market of unsatisfied customers—ones that entrepreneurs like Pelletier are eager to serve. Since 2018, the FDA has approved new contraceptives including Evofem’s nonhormonal gel; Agile Therapeutics’ Twirla, a weekly patch with a relatively low dose of estrogen; TherapeuticsMD’s Annovera, a vaginal ring that can be used for up to a year; Mayne Pharma’s Nextstellis, a pill with a plant-based form of estrogen; and Slynd, an estrogen-free pill manufactured by privately owned Insud Pharma.

But this is where the roadblocks of health care economics loom large. It can take more than a decade and sometimes billions of dollars to get FDA approval for a new drug. The startups that have successfully broken into birth control don’t have the same financial cushions as their Fortune 500 brethren, to survive the years of navigating the regulatory labyrinth. “Large companies aren’t interested in women’s health—and small companies have a hard time commercializing,” says Annabel Samimy, a managing director and senior biopharmaceutical analyst at Stifel. And those that win approval find that they can’t actually sell their products at a profit, because insurers refuse to cover them, and women can’t or won’t pay out of pocket when flawed but cheaper options exist.

1%

Share of medical R&D spending that goes to female-specific health issues other than cancer

Agile Therapeutics had to resubmit its Twirla application twice over a decade—and conduct a new set of trials—before it finally won FDA approval in 2020. All told, Agile spent about $250 million to get Twirla approved. “We won—but we came out of that broke,” recalls Agile CEO Al Altomari, a veteran of Johnson & Johnson’s women’s health business. “And we’ve never clawed our way back in the public market, because now we’ve got to face the insurance companies.”

It’s an all-too-familiar confrontation in the U.S. health care system: In the tug-of-war for profits between drugmakers and insurers, patients’ welfare is often lost in the middle. The ACA mandate should have sheltered contraception, and the women who use it, from this showdown—but insurers and their powerful pharmacy benefit managers (PBMs) are finding ways to avoid fully paying for what patients need. UnitedHealth Group, the nation’s largest insurer, is the worst offender, but most companies are dodging full compliance, according to industry executives, the House report, and dozens of Fortune interviews. “It’s incredibly frustrating—and it’s a detriment to the patient’s health,” says Dr. Daniel McDyer, an ob/gyn in Jacksonville, who says his office has to “jump through all kinds of hoops” to help patients get reimbursed for newer forms of contraception.

President Biden’s administration has issued guidance “clarifying” the law and has repeatedly called on insurers to fully comply. Now the administration “is actively investigating” reports of insurer noncompliance, Chiquita Brooks-LaSure, the U.S. Administrator for the Centers for Medicare and Medicaid Services (CMS), told Fortune in an emailed statement in late March. A source familiar with the investigations said that they include “audits into multiple insurers” and may eventually lead to enforcement or other “corrective actions,” such as fining insurance companies.

Any such crackdown would significantly help the 73 million U.S. women of reproductive age. But it may not come soon enough for the few companies that are actually investing in birth control. Those that have made it to market are struggling financially today: Mayne Pharma, the Australian company that took over TherapeuticsMD’s products and won FDA approval for its own Nextstellis pill in 2021, lost about $17 million on Nextstellis in its most recently reported six-month period; executives tell Fortune that they blame insurance coverage restrictions for its “slower than planned” sales. Agile, which has no products other than Twirla, lost more than $25 million last year; its stock is also trading for pennies and is on the brink of being delisted from the Nasdaq.

“When an entrepreneur comes to me and says they want to start a new women’s health care company,” Altomari adds, “I tell them, ‘Don’t do it.’”