Company reduces price of naloxone

Action comes after Senate report details 600 percent price hike

Almost a month after a U.S. Senate report detailed how kaléo exploited the opioid epidemic by significantly increasing the price of its EVZIO naloxone, the company has announced it’s reducing its price.

On the EVZIO website, the company announced the opioid overdose reversal medicine is available at a significantly decreased price for government agencies, first responders, health departments, and other qualifying groups “when they purchase directly from kaléo or authorized distributors.”

The medicine is available for $178 per carton, down from $4,100.

“This news is a positive step forward and

I’m hopeful that it will increase access to naloxone, a criticallyimportant overdose reversal drug that has saved tens of thousands of lives,” Sen. Rob Portman, R-Ohio said.

The Portman-chaired Senate Permanent Subcommittee on Investigations released its report last month that showed that kaléo increased the price of EVZIO by more than 600 percent (from an initial price of $575 per unit to $3,750 and then $4,100 eleven months later), “resulting in more than $142 million in charges to taxpayers in just the last four years.”

EVZIO launched in 2014 with a wholesale acquisition cost of $575. With sluggish sales at its initial price point, the subcommittee investigation states that the company implemented a new distribution model proposed by consultant Todd Smith that increased the price by more than 600 percent by 2016.

Per the report, as part of the distribution model, kaléo’s sales force focused on ensuring doctor’s offices signed necessary paperwork indicating that EVZIO was medically necessary. This ensured the medicine was covered by government programs like Medicare and Medicaid.

Before the price increase, industry experts recommended pricing EVZIO between $250 and $300. Those experts told the company it would “own the market” at that price. One of those experts went on to work with Adapt to price Narcan at $125, which the report stated has “cornered the market” at that price.

EVZIO costs roughly $174 to make, according to the report. That includes $52 for manufacturing, $29 in overhead and $93 in “obsolescence.”

The investigation found that kaléo’s new distribution model worked. EVZIO fill rates increased from 39 percent to 81 percent.

“While kaléo said its new model focused on commercially-covered patients, the majority of its initial revenues were from Medicare and Medicaid, and the resulting cost to taxpayers, to date, has been $142 million despite the fact that much less costly alternatives are available,” the reported states.

The company paid Smith and a partner at his Underhill consulting firm more than $10.2 million for about two years of work. That rate was based on revenue generated by their distribution model, according to the investigation.

Smith had previously installed his distribution model at Horizon and Novum pharmaceutical companies, where he drastically raised drug prices.

In response to the Senate report, kaléo stated it believes there are “two critical facts to the EVZIO story.”

“First, we have received voluntary reports from recipients of donated product that EVZIO has saved more than 5,500 lives since we launched the product in 2014,” the statement read. “Second, we have never turned an annual profit on the sale of EVZIO. Patients, not profits, have driven our actions.”

Portman said the subcommittee “will continue its efforts to lower prescription drug costs and protect taxpayer-funded programs like Medicare and Medicaid.”

Portman