February 8, 2017

Amid opioid misuse epidemic, drugmakers hike price of overdose antidote

Daily Briefing

Drugmakers are raising the price of naloxone, a drug used to reverse the effects of an opioid overdose, amid an increasing opioid misuse epidemic in the United States.

According to the Kaiser Health News/Washington Post, more than 33,000 U.S. residents died from opioid overdoses in 2015.

Kaléo hikes price of its naloxone product

Researchers in a perspective piece published in the New England Journal of Medicine found that the drugmaker, Kaléo Pharma, raised the price of its twin-pack auto-injector formulation of naloxone, called Evzio, by 500 percent over two years, from $690 in 2014 to $4,500 in 2016.

According to the KHN/Post, Evzio—which verbally instructs users on how to administer the drug—accounted for 20 percent of naloxone dispensed through retail outlets between 2015 and 2016, and nearly half of all naloxone products prescribed to individuals ages 40 to 64 (who make up the majority of naloxone users).

Kaléo Vice President of Corporate Affairs Mark Herzog said the drug's list price is "not a true gauge," because insurance companies can negotiate discounts and rebates on the product. Herzog added that Kaléo has given away more than 180,000 devices at no cost to the recipients.

But some observers say the price increase has had an effect on access to the product. For example, Leo Beletsky, an associate professor of law and health sciences at Northeastern University, said even though insurers can negotiate discounts and rebates for the drug, the price increase "still [is] borne by patients, because insurance premiums go up."

Further, some agencies and organizations might not to be able to negotiate discounts and, as a result, have to pay the drug's list price.

Chris Bell, who runs the Vermont health department's emergency preparedness and injury prevention division, said the state has been trying to help opioid users access naloxone, but Evzio's high price has caused the state to use another formulation of the drug that is available at a lower price.

Eliza Wheeler of San Francisco's Harm Reduction Coalition, a not-for-profit group that works to curb opioid overdoses, said, "I might have $10,000 to spend on naloxone for a year to supply a whole city," adding, "If I have 10 grand to spend, I certainly can't buy two Evzios."

Separately, Ravi Gupta, a medical student and lead author of the NEJM paper, said, "There's a lot of value to this formulation," but "this pricing is not justified."

Price hikes not exclusive to Evzio

Kaléo is not the only drugmaker to recently increase its price for its naloxone product. According to Vox, Hospira has increased the price of its generic, injectable naloxone from $62.29 in 2012 to $142.49 today. In addition, the price of Amphastar's nasal spray version of naloxone has spiked by 95 percent to $39.60 since 2014.

The researchers in the NEJM paper wrote the products' rising costs could be inhibiting increased use of naloxone, and likened the price hikes to "an overall trend of increasing prescription drug prices for both new brand-name drugs and old, off-patent generics." The researchers called on policymakers to implement reforms intended to limit prescription drug prices (Luthra, Kaiser Health News/Washington Post, 1/27; Gupta et al., New England Journal of Medicine, 12/8/16; Belluz, Vox, 2/3).

What providers can learn from the drug pricing debate

We already knew that patients are becoming more sensitive to health care costs. But public uproar over one drug's 5,000 percent "overnight" price hike proves that patients are more discerning—and vocal—than ever. With more of their money on the line, patients are actively deciding when and where to access care based on cost.

We saw it coming—and we laid out concrete tactics for dealing with price sensitivity in your market. The first chapter in our study, The Consumer-Oriented Ambulatory Network, focuses on how you can retain market share by making services more affordable. Download the study to learn more.

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