Too costly a cure?

As heroin over­doses soar, so does the price of a life­sav­ing treat­ment.


First came Martin Shkreli, the brash young phar­ma­ceu­ti­cal en­tre­pre­neur who raised the price for an AIDS treat­ment by 5,000 per­cent. Then, Heather Bresch, the CEO of My­lan, who over­saw the price hike for its sig­na­ture EpiPen to more than $600 for a twin­pack, though its ac­tive in­gre­di­ent costs pen­nies by com­par­i­son.¶ Now a small com­pany in Rich­mond called Ka­leo Pharma is join­ing their ranks. It makes an in­jec­tor de­vice that is sud­denly in de­mand be­cause of the na­tion’s epi­demic use of opi­oids, a class of drugs that in­cludes heavy painkillers and heroin. Called Evzio, it is used to de­liver nalox­one, a life­sav­ing an­ti­dote to over­doses of opi­oids. More than 33,000 peo­ple are said to have died of such over­doses in 2015. And as de­mand for Ka­leo’s prod­uct has grown, the pri­vately held firm has raised its twin­pack price to $4,500, from $690 in 2014.


The price for a twin-pack of Evzio, a de­vice that is used to save peo­ple from heroin over­doses.


Amount the price has grown, com­pared with 2014, when the same pack cost $690.

Founded by twin broth­ers Eric and Evan Ed­wards, 36, the com­pany first sought to de­velop an EpiPen com­peti­tor, thanks to their own food al­ler­gies. Now, they’ve taken that model and mar­keted it for a ma­jor pub­lic health cri­sis. It’s an­other au­toin­jec­tor that de­liv­ers an in­ex­pen­sive medicine.

One dif­fer­ence, though, is that Evzio talks users through the process as they in­ject nalox­one. The com­pany 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.

Ac­cord­ing to Food and Drug Ad­min­is­tra­tion es­ti­mates, the Ka­leo prod­uct, which won fed­eral ap­proval in 2014, ac­counted for nearly 20 per­cent of the nalox­one dis­pensed through re­tail out­lets be­tween 2015 and 2016, and for nearly half of all nalox­one prod­ucts pre­scribed to pa­tients be­tween ages 40 and 64 — the group that con­sti­tutes the bulk of nalox­one users.

And the cost of generic, in­jectable nalox­one — which has been on the mar­ket since 1971 — has been climb­ing. A 10-mil­li­liter vial sold by one of the dom­i­nant ven­dors costs close to $150, more than dou­ble its price from even 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.

Still, ex­perts say the de­vice’s price surge 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.

Ka­leo, which is try­ing to blunt the pric­ing back­lash and turn Evzio into the trusted brand, is dis­pens­ing its de­vice free — to cities, first re­spon­ders and drugtreat­ment pro­grams. Such dona­tions were also es­sen­tial to the EpiPen’s busi­ness strat­egy.

The de­vice has been in­valu­able to pa­tients, said Eliza Wheeler of San Fran­cisco’s Harm Re­duc­tion Coali­tion, a non­profit or­ga­ni­za­tion that works to com­bat over­doses and has re­ceived dona­tions of Evzio. But at $4,500 a pack­age?

“I might have $10,000 to spend on nalox­one for a year to sup­ply a whole city,” Wheeler said. “If I have 10 grand to spend, I cer­tainly can’t buy two Evzios.”

Mark Her­zog, Ka­leo’s vice pres­i­dent of cor­po­rate af­fairs, said in an email that most ear­lier nalox­one de­vices were “de­vel­oped, de­signed and in­tended” for use in med­i­cally su­per­vised set­tings.

Prior kits con­tained a pre-filled sy­ringe. The Evzio was the first to help non­pro­fes­sion­als dis­pense the drug. And com­pe­ti­tion is lim­ited: One of the few con­sumer­friendly al­ter­na­tives to Evzio is a nasal-spray de­vice for nalox­one — its costs have climbed as well, though at about $150 for two doses, they are still far be­low Evzio’s.

A grow­ing mar­ket

The opi­oid cri­sis has led more ex­perts to call for ex­panded ac­cess to nalox­one — for peo­ple nav­i­gat­ing ad­dic­tion and for those around them. The idea is that if some­one nearby could over­dose, dis­pens­ing the drug should be as easy as pulling the fire alarm.

Fed­eral and state gov­ern­ments have spent mil­lions of dol­lars equip­ping po­lice of­fi­cers and other first re­spon­ders with nalox­one. In com­mu­ni­ties par­tic­u­larly hard-hit by drug over­doses, places such as schools, li­braries and cof­fee shops are keep­ing the an­ti­dote on hand. Physi­cians are pre­scrib­ing it to pa­tients who are tak­ing pre­scrip­tion painkillers in an ef­fort to make sure they — and their fam­i­lies and friends — are pre­pared.

The Evzio could be ideal, es­pe­cially when med­i­cal pro­fes­sion­als are not nearby, noted Traci Green, an as­so­ciate pro­fes­sor at Bos­ton Univer­sity’s School of Medicine. But the price lim­its ac­cess.

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

“There’s a lot of value to this for­mu­la­tion,” said Ravi Gupta, a med­i­cal stu­dent and lead author of a De­cem­ber op-ed on the pric­ing is­sue, pub­lished in the New Eng­land Jour­nal of Medicine. “But it’s not jus­ti­fied. This pric­ing is not jus­ti­fied.”

But con­sumers may not yet be pinched. In an­other My­lan par­al­lel, Ka­leo of­fers coupons to pa­tients with pri­vate in­surance, so they don’t have any co-pay when they pick up the de­vice.

So Ka­leo would say the price hikes are es­sen­tially moot. Her­zog said they are nec­es­sary to sub­si­dize pro­grams that do not of­fer co-pay­ments. In a fol­low-up email, he added that the list price is “not a true gauge,” be­cause in­surance com­pa­nies can some­times ne­go­ti­ate re­bates and dis­counts. And, he said, since the price in­crease, more pa­tients have got­ten Evzio pre­scrip­tions filled — so the cost doesn’t seem to be stop­ping them.

My­lan pro­vides a sim­i­lar EpiPen dis­count — a move that’s helped ce­ment it as the dom­i­nant ep­i­neph­rine provider. But even if con­sumers don’t di­rectly pay for the price in­creases, they’re af­fected, an­a­lysts cau­tioned.

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

That, an­a­lysts say, un­der­mines Ka­leo’s ar­gu­ment that they’re some­how in­creas­ing ac­cess. Af­ter all, while some govern­ment agen­cies and pri­vate or­ga­ni­za­tions get the drug free or at a deep dis­count, that isn’t true across the board. For those who don’t get that deal, the list price mat­ters.

Take Ver­mont. The state’s been par­tic­u­larly hard-hit by the epi­demic — more than 70 peo­ple died of opi­oid over­dose in 2015, and it’s been dubbed Amer­ica’s “heroin cap­i­tal.”

Its health de­part­ment is try­ing to get nalox­one into the hands of peo­ple us­ing opi­oids, set­ting up dis­tri­bu­tion sites around the state. But be­cause of its high cost, Evzio isn’t an op­tion, said Chris Bell, who runs the state health de­part­ment’s emer­gency pre­pared­ness and in­jury pre­ven­tion divi­sion. So it is opt­ing for the nasal spray that costs a frac­tion of the price.

That’s not true ev­ery­where, though. The Veter­ans Health Ad­min­is­tra­tion, known for its es­pe­cially high rate of pa­tients tak­ing opi­oid-based pre­scrip­tion painkillers, cov­ers the auto-in­jec­tor. It can do so, though, be­cause of its bar­gain­ing power — the agency is legally au­tho­rized to ne­go­ti­ate with phar­ma­ceu­ti­cal com­pa­nies.

As a re­sult, Veter­ans Af­fairs is pay­ing “far, far less” than the Evzio list price, said Joseph Can­zolino,

33K Peo­ple who died of opi­oid over­dose in the United States in 2015. $150 Price for a 10-mil­li­liter vial of in­jectable nalox­one. 4 Num­ber of Evzio in­jec­tions a San Fran­cisco non­profit can af­ford a year — to sup­ply the whole city.

deputy chief con­sul­tant for phar­ma­ceu­ti­cal ben­e­fits man­age­ment at VA. (He would not re­lease the pre­cise fig­ure.)

The agency’s buy­ing power is such, he added, that even when com­pa­nies drive up prices, what VA pays will stay more or less sta­ble — far be­low a fig­ure he called “pretty ex­or­bi­tant.”

Thanks to an in­fu­sion of pub­lic fund­ing to com­bat opi­oid over­doses, other in­sti­tu­tional buy­ers may also be able to af­ford Evzios. Their bud­gets are larger right now, so they’re less price sen­si­tive, said Ni­chol­son Price, an as­sis­tant pro­fes­sor at the Univer­sity of Michi­gan Law School.

But that money comes from some­where — most prob­a­bly tax­pay­ers. And it’s hardly sus­tain­able, Price noted, say­ing “at some point in time, the rub­ber’s got to hit the road.”

Ka­leo has given away more than 180,000 de­vices, Her­zog said, dis­trib­uted in 34 states among about 250 or­ga­ni­za­tions such as po­lice de­part­ments and non­profit groups that dis­trib­ute nalox­one to peo­ple at risk of over­dose.

Ad­vo­cates and phar­macy groups have made videos tout­ing the prod­uct. In neigh­bor­hoods where over­dose is com­mon, busi­nesses — such as fast-food restau­rants, gro­cery stores and other re­tail es­tab­lish­ments — are in­ter­ested in keep­ing read­ily dis­pens­able nalox­one on hand.

But those who’ve ac­cepted free Evzio de­vices and have come to rely on it may soon face with­drawal. Last year, Ka­leo’s do­na­tion sup­ply was ex­hausted by July. Her­zog said the com­pany has added to its do­na­tion sup­ply and is tak­ing ap­pli­ca­tions from groups hop­ing for free de­vices.

Bar­ring a mean­ing­ful ex­pan­sion, the free de­vice pro­gram could run out of sup­plies even sooner if the opi­oid cri­sis keeps up.

The prob­lem, Price noted, is that pol­i­cy­mak­ers haven’t found a so­lu­tion to get peo­ple needed med­i­ca­tion and keep pric­ing in line with value.

“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.”

Kaiser Health News, a non­profit health newsroom whose sto­ries ap­pear in news out­lets na­tion­wide, is an ed­i­to­ri­ally in­de­pen­dent part of the Kaiser Fam­ily Foun­da­tion.


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