Price of Lifesaving Antidote for Opioid Overdose Rises Dramatically

The price for the naloxone injector rose from $690 to $4,500 in one year

Price of Lifesaving Antidote for Opioid Overdose Rises Dramatically
Image: Pixabay
February 6, 2017

Another day, another drastic increase in the price of a lifesaving medication.

Drug manufacturer Kaleo is joining the ranks of Turing Pharmaceuticals and Mylan as a company that has dramatically raised the price of one of its drugs, a medication that has the potential to save lives, writes Scientific American.

Kaleo produces an injector device known as Evzio, which delivers naloxone, an antidote to opioid overdoses. The device has come into demand due to the nation's epidemic of opioid use, a class of medications including heavy painkillers and heroin. It is believed that more than 33,000 people died from such overdoses in 2015. As demand has grown, the company raised the price in 2014 from $690 to $4,500.

The company, which was founded by brothers Eric and Evan Edwards, was originally intended to develop a competitor to Mylan's EpiPen. Now Kaleo has marketed the model for a major public health crisis—another auto-injection device that provides a cheap medication.

One difference between Evzio and the EpiPen is that Evzio includes a mechanism that talks the user the process of injecting naloxone. According to Kaleo, the device is worth the high price because it is able to direct anyone to inject an overdose victim correctly, leave the injector's needle in for the correct amount of time, and possibly save the victim's life.

The Food and Drug Administration (FDA) estimates that Evzio accounted for almost 20 percent of naloxone dispensed through retailers between 2015 and 2016 as well as almost half of all naloxone products that were prescribed to patients between the ages of 40 and 64—the group making up the majority of the drug's users.

The cost of naloxone in generic, injectable form—which has been marketed since 1971—has been rising. Researchers say that a 10-mililiter vial sold by one of the dominant vendors costs nearly $150, which is more than twice the cost of the drug from even a few years ago and is much higher than it costs to produce the naloxone chemical. The other common injectable medication—which is produced in a smaller but more powerful dose—costs nearly $40, an amount that is still almost twice its cost in 2009.

The price hike is still much higher than production costs require, according to experts, and it is an unnecessary drain of healthcare 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.

Kaleo is dispensing the device for free to cities, first responders, and drug treatment programs—donations also essential to Mylan's business strategy for the EpiPen.

According to Eliza Wheeler of the nonprofit Harm Reduction Coalition, which works to fight overdoses and has received Evzio donations, the device has proved invaluable for patients. As for the price tag?

"I might have $10,000 to spend on naloxone for a year, to supply a whole city," she said. "If I have 10 grand to spend, I certainly can't buy two Evzios."

Mark Herzog, the company's vice president of corporate affairs, stated that most of the previous naloxone devices were "developed, designed and intended" to be used in medically-supervised settings.

Although there was a pre-filled syringe in previous kits, Evzio was the first that actually helped consumers to dispense the medication. And there is little competition for Evzio: one of the few alternatives that anyone can use is a nasal spray device for naloxone.

Due to the opioid crisis, experts have been calling for wider access to the drug, both for addicts and for those around them. The idea is that if a nearby person could overdose, it should be as easy to dispense the drug as it is to pull the fire alarm.

Governments at both the state and federal level have spent millions of dollars to equip police officers and other first responders with naloxone. In communities where drug overdoses are particularly common, places like schools, libraries, and coffee shops keep the antidote on hand. Doctors prescribe it to patients who take prescription painkillers to try to make sure that they—as well as their families and friends—are prepared.

Boston University School of Medicine Associate Professor Traci Green believes that Evzio could be ideal, particularly when there are no medical professionals close by. The price, however, prevents many people from getting access to it.

"It's a really good product," she said. "It's elegant. People do like it—but they can't afford it."

Medical student Ravi Gupta was the lead author of an op-ed on the pricing issue in a December issue of the New England Journal of Medicine.

"There's a lot of value to this formulation," said Gupta. "But it's not justified. This pricing is not justified."

Evzio buyers may not be experiencing significant financial distress yet, though. Like Mylan, Kaleo is offering coupons to patients who carry private health insurance, so these consumers have no co-pay when they receive the device.

For this reason, Kaleo would say that the price increases are, in effect, moot. According to Herzog, they are necessary in order to subsidize programs that don't offer copayments. He said that the product's list price is "not a true gauge" because insurers are sometimes able to negotiate on rebates and discounts. And since the price hike, he said, more patients have had their Evzio prescriptions filled, which seems to show that the cost is not stopping them.

Analysts caution, however, that consumers are affected by price hikes even if they don't pay for them directly.

"When you have these kinds of programs, the cost is still borne by patients, because insurance premiums go up," Beletsky said.

This, say the analysts, undermines the company's argument that they are actually increasing patient access to the drug. Though some government agencies and private entities receive it either for free or at a deep discount, not everyone does. For these, the list price is important.

Vermont has been hit especially hard by the opioid overdose epidemic: more than 70 people died as a result in 2015, and the state has been called America's "heroin capital."

Vermont's health department is trying to get naloxone to people who use opioids. It has established distribution sites all around the state. However, according to Chris Bell, who runs the department's emergency preparedness and injury prevention division, the high cost of Evzio means that it isn't an option. It has chosen the nasal spray that costs a fraction of Evzio's price.

This is not the case everywhere, however. The Veterans Health Administration (VA)—which is known for its particularly high rate of patients who take opioid-based prescription painkillers—pays for the device. But it is only able to do so due to its bargaining power: it is authorized by law to negotiate with pharmaceutical companies.

The result is that the VA is paying "far, far less" than Evzio's list price, according to Joseph Canzolino, who is the agency's deputy chief consultant for pharmaceutical benefits management. And it has so much buying power that, even when companies do raise prices, the amount that it pays will remain more or less stable, much less than a number that he called "pretty exorbitant."

Other institutions may also be able to afford the device due to public funding for fighting opioid overdoses. These are less price sensitive because their budgets are larger at this time, said Nicholson Price, an assistant professor at the University of Michigan Law School.

That money has to come from somewhere, though, most likely from taxpayers. This is hardly sustainable, said Price, who noted that "at some point in time the rubber's got to hit the road."

According to Herzog, Kaleo has donated more than 180,000 devices across 34 states among roughly 250 organizations, such as police departments and nonprofits that distribute the drug to people who are at risk of overdosing.

However, these organizations may soon have to face withdrawal. In 2015, the company's donation supply was exhausted by July. Herzog claims that it has increased its supply and is now taking applications from groups that hope to receive free devices.

However, unless it is significantly expanded, the free device program might run out of supplies ever sooner if the current epidemic continues.

Price pointed out that the problem is that policymakers have not found a way to get people the medication he needed while also keeping pricing in line with device value.

"Epi-Pen 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."