Under Fire for 'Overpriced' Naloxone Injector, Kaleo Announces a Generic for 1/10th the Price

Under Fire for 'Overpriced' Naloxone Injector, Kaleo Announces a Generic for 1/10th the Price

Last November, Salt Lake City emergency room pediatrician Jennifer Plumb told 60 Minutes host Leslie Stahl that naloxone, used to reverse opioid overdoses, is a "miracle drug."

"Understand, this stuff is really good at what it does," Plumb told Stahl. "It has one job. Can't get high on it. Can't overdose on it. Can't relieve pain with it. You can just save a life with it. I mean, how amazing is that?"
Surprised, Stahl asked: "Does it really bring people back from death?"
"It really does," Plumb replied. "And it is black and white. It is someone 'Hey, hey, hey, hey, talk to me, talk to me,' no response, to up and alert and talking to you."

In its intro to the show, 60 Minutes said this: "In 1971, almost half a century ago, emergency rooms started reversing opioid overdoses using a medicine called naloxone. It's generic today, and industry insiders told us it can cost as little as a nickel a dose to produce."

The 60 minutes show was an investigation of pharmaceutical company Kaleo, Inc., maker of the easy-to-use Evzio "talking" naloxone injector. The company drew CBS's attention not because of the life-saving properties of naloxone, but because the company had boosted its original price of $575 to more $4,100 for a two-injector kit.

Kaleo's soaring price tag also drew the attention last year of the Senate's Permanent Subcommittee on Investigations. During a four-year span in which opioid overdose deaths accelerated to record levels, the subcommittee said, Kaleo was cashing in on the mayhem.

Taxpayers were footing much of the bill, says the subcommittee's report (PDF) on Kaleo's price hikes and its effects, and the drug was priced out of reach of most citizens. The report covers 99 pages - unprecedented in an era when pharmaceutical prices - and eyebrows - are rising everywhere with still no real action from Washington.

"While most of that tab was picked up by insurers and not at-risk individuals or their loved ones," said a StatNews article in December, "the Senate report found that the price hike cost government health programs like Medicare and Medicaid as much as $142 million."

Kaleo announces cheaper generic

When CBS asked Kaleo CEO Spencer Williamson to appear on its 60 Minutes special, the executive agreed, and surprised everyone by proposing a dramatic turnaround.

First, Williamson blamed the soaring price of Evzio on a marketing consultant's strategy which, he says, not only failed to work as expected, but caused the company to lose money on the product for its entire four years. The consultant, said CBS, has a known history of "engaging in similar pricing strategies with other pharmaceutical companies."

He then used the interview to publicly offer a stunning price drop for a generic, but essentially identical product, if insurers and pharmacy benefit managers would accede to some conditions.

On camera, Williamson said: "We want to reach out to all middlemen, all insurance companies, to say, 'We will lower this price to less than the original $575 if you will make sure that when a physician decides a patient is at risk, they can get it and they can afford it.'"

Saying the company would work with one insurance company at a time, he said that discussions have begun.

"But I'm announcing it on 60 Minutes that our hands are out to offer this price for less than $575 as long as patients won't be blocked when they need it. Kaleo will drop its price if insurers and PMBs stop putting up roadblocks that prevent it from getting into the hands of those who need it."

Price drop and an explanation

Williamson also explained to 60 Minutes' Leslie Stahl that, throughout the 4 years of price hikes and criticism, almost no one was unable to obtain Evzio because the company always made up the difference in personal costs. He said Evzio continues to be available at no cost through most private health insurance beneficiaries as well, and the generic version will be more available to Medicare beneficiaries.

Soon after the show aired, Kaleo announced that its subsidiary, IJ Therapeutics, will produce an identical version of the Evzio brand naloxone injectors for $178 retail for a two-injector kit.

Meanwhile, the company says its brand-name Evzio kits will be made available to first responders, such as police, emergency medical teams and health departments, at the same new price.

Just last summer, Surgeon General Jerome Adams urged all Americans with friends or family at risk of opioid overdosing to get and carry naloxone at all times. The Evzio auto-injector has been promoted by some health officials to be co-prescribed along with opioid prescriptions for patients deemed at risk for overdose.

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