First came Martin Shkreli, the brash pharmaceutical entrepreneur who raised the price for an AIDS treatment by 5,000%. He was followed by Heather Bresch, the CEO of Mylan, who oversaw the price hike for the company’s signature epinephrine auto-injector, EpiPen, to more than $600 for a twin-pack, even though its active ingredient costs pennies. Now a small Virginia company called Kaléo is joining their ranks, according to a report from Kaiser Health News (KHN).
Kaléo makes an auto-injector device that is suddenly in demand because of the nation’s opioid epidemic. Called Evzio, the device is used to deliver naloxone, a life-saving antidote to overdoses of opioids. More than 33,000 people died from such overdoses in 2015. As the demand for Kaléo’s product has grown, the privately held firm has raised its twin-pack price to $4,500, from $690 in 2014.
Founded by twin brothers Eric and Evan Edwards, 36, the company first sought to develop an Epi-Pen competitor, thanks to their own food allergies. Now, they have taken that model and marketed it for a major public health crisis. It’s another expensive auto-injector that delivers an inexpensive medication. One difference, however, is that the Evzio device talks users through the process as they inject naloxone. Kaléo says the talking device is worth the price because it can guide anyone to jab an overdose victim correctly, leave the needle in for the right amount of time, and potentially save his or her life.
The Evzio auto-injector could be ideal, especially when medical professionals are not nearby, noted Dr. Traci Green, an associate professor at Boston University’s School of Medicine. But the price limits access to the device.
“It’s a really good product,” she said. “It’s elegant. People do like it—but they can’t afford it.”
According to FDA estimates, the Kaléo product, which was approved in 2014, accounted for nearly 20% of the naloxone dispensed through retail outlets between 2015 and 2016, and for nearly half of all naloxone products prescribed to patients between the ages of 40 and 64—the group that comprises the bulk of naloxone users.
In addition, the cost of generic, injectable naloxone—which has been on the market since 1971—has been climbing. A 10-mL vial sold by one of the dominant vendors costs close to $150, more than double its price from a few years ago and far beyond the production costs of the naloxone chemical, researchers say. The other common injectable, which comes in a smaller but more-potent dose, costs closer to $40––still about double its 2009 cost.
Experts say the price surge for Evzio is way out of step with production costs and a needless drain on health-care resources.
“There’s absolutely nothing that warrants them charging what they’re charging,” said Leo Beletsky, an associate professor of law and health sciences at Northeastern University in Boston.
Kaléo, which is trying to blunt the pricing backlash and turn Evzio into a trusted brand, is dispensing its device for free—to cities, first responders, and drug treatment programs. Such donations were also essential to the EpiPen’s business strategy.
But those who have accepted free Evzio devices and have come to rely on it may soon face withdrawal, according to the KHN article. Last year, Kaleo’s donation supply was exhausted by July.
The problem is that policymakers haven’t found a solution to provide people with needed medications and keep pricing in line with value, said Nicholson Price, an assistant professor at the University of Michigan Law School.
“EpiPen happened, and everyone was like, ‘Wow, this is terrible. We shouldn’t allow this to happen,’” he said. “And we haven’t done anything about that, and it’s not clear what the solution is. Now––shocker––it’s happening again.”
Source: Kaiser Health News; January 30, 2017.