Drug companies aren’t known for their subtle reactions to the times. This week, it’s Kaleo, makers of a novel auto injector device that delivers a potentially life-saving dose of a drug that can reverse opioid overdose. The drug, Evzio, which is patented for its delivery system of a generic drug, Naloxone, sold under the brand name Narcan, has shot up in price from $690 for a two-pack in 2014 to $4,500 today. This is the most extreme example of across-the-board price spikes for Naloxone.
Opioid addiction is a growing problem in the United States, and there has been a growing epidemic of overdoses. The CDC identified more than 33,000 opioid overdose deaths in 2015, and noted that the number has quadrupled since 1999.
Kaleo is a small drug maker, also known for its innovative take on the anti-allergy drug EpiPen, the AUVI-Q. Like Evzio, AUVI-Q’s novelty comes from its delivery system: It’s an auto-injector of epinephrine (the same drug found in EpiPens) that has a small speaker built into the device, talking the person through the process.
In both of these situations — drug overdose and allergic reaction — Kaleo’s device makes a lot of sense and could change the market. Kaleo’s focus — on emergency, life-threatening situations — is due for some innovation. And yet, Kaleo is pricing both the Evzio and the AUVI-Q at insane prices. Though it has pledged not to pass the $4,500 price tag onto consumers, and says it will sell it for no more than $360 cash price, even to those without insurance, the price it charges insurance companies far outpaces anything it could justify to cover the drug — which is generic and quite cheap — or its production.
Kaleo’s pricing scheme for the AUVI-Q, which was FDA approved then recalled last year for quality problems and is set to return to the market this month, appears to work out in favor of the consumer. But for the Evzio, which the American Pharmacists Association says accounts for about 20 percent of all Naloxone prescriptions, the pricing at least appears to be passed onto consumers, and the price hike is reportedly due to increased demand for the product. The APA further reports that Kaleo distributed some of the product for free, “getting people hooked,” before raising its prices. Many are sold to nonprofit drug centers with limited budgets. It’s currently unclear if the new pricing is permanent or not.