- Kaléo, under fire for sharply increasing prices on its opioid overdose treatment Evzio, will launch a generic version of its own drug at a cost that amounts to less than 5% of the list price of its branded version, the company said Dec. 12.
- The company's authorized generic of Evzio will be priced at $178 for a pack of two autoinjectors, far below the $4,100 Kaléo charges for the branded drug. Kaléo will also make the naloxone treatment available to first responders, government agencies and health departments at the same, lower price — provided they buy direct from Kaléo or authorized distributors.
- It's the latest example of an unorthodox response to pricing criticism and follows similar moves from Mylan and Gilead Sciences, both of which rolled out cheaper authorized copies to their own products. In each case, the drugmakers criticized a system they imply has made reducing branded prices difficult.
Kaléo is a month removed from the release of a scathing report from the Senate permanent subcommittee on investigations which criticized the company's pricing practices. The committee's findings were also profiled in a "60 Minutes" episode that drew comparisons between the company's treatment of Evzio (naloxone HCI injection) and past controversies over increased drug prices.
According to the Senate report, Kaléo swiftly raised the wholesale acquisition cost of Evzio from its introductory price of $575 per pack in 2014 to the current $4,100 by January 2017.
Naloxone, the active ingredient in Evzio that works to reverse opioid overdoses, is already a generic drug. Kaléo's injectable version, along with a nasal spray marketed by Adapt Pharma, are packaged to permit easy use by untrained individuals responding to an emergency. (Adapt is now owned by Emergent BioSolutions.)
The Senate committee's report claims Kaléo's pricing strategy was designed to extract greater revenue from patients with insurance, thereby subsidizing uncovered patients to whom Kaléo provided the drug at no cost.
Much of the revenue Kaléo has earned from Evzio has come through Medicare and Medicaid. In the first quarter of 2017, for example, the government insurance programs accounted for only 25% of the units sold in that three-month period but 75% of net sales, the Senate committee found.
All told, Medicare has paid $142 million for Evzio since 2014.
In introducing its authorized generic, Kaléo framed the move as the least disruptive way to increase access to Evzio, particularly for Medicare Part D patients and plans.
"We have been working for some time with the major pharmacy benefit managers and insurers to identify solutions for removing barriers and restrictions that may impede access," said Kaléo CEO Spencer Williamson in a Dec. 12 statement.
"We are encouraged by these ongoing conversations and are confident that introducing an authorized generic is the most efficient way to provide greater coverage of a lower priced option — with the least amount of disruption to the healthcare system."
Williamson's argument mirrors those made by Gilead and Mylan, which criticized the system for passing on costs to patients while downplaying the role played by drugmakers in setting the higher price.
Kaléo's launch of an authorized generic pleased one critic, at least.
The news that @kaleo has taken steps to reduce the price of its life-saving naloxone drug is a positive step. This drug is critical in saving thousands of lives & as chairman of PSI, I’m proud our investigative work helped lead to this change of course. https://t.co/3rHAFNm3kG— Rob Portman (@senrobportman) December 12, 2018