- The Washington Times - Wednesday, December 12, 2018

A Virginia drugmaker said Wednesday that it will roll out a far cheaper, generic version of its overdose-reversing naloxone, one month after Senate investigators accused the company of capitalizing on the U.S. opioid epidemic by dramatically hiking its price.

Richmond-based Kaleo will charge $178 for a carton of two auto injectors, much less than the $4,100 list price for its brand-name product, Evzio.

“With approximately 130 people dying daily from opioid overdoses, we recognize that more needs to be done to improve access for patients,” said Spencer Williamson, president and CEO of Kaleo.

Company officials said the generic version will be available by the middle of next year, well before the patent expires. They said they will offer Evzio to first responders, health departments and government agencies at the $178 price if they buy it directly from Kaleo or authorized distributors — down from a $360 discounted price.

The announcement was made just weeks after the Senate Homeland Security and Governmental Affairs permanent subcommittee on investigations, in a CBS “60 Minutes” expose, accused Kaleo of making a profit off the opioid crisis.

Sen. Thomas R. Carper of Delaware, the lead Democrat on the investigation, called Kaleo’s decision a “teachable moment for other drug manufacturers,” while Sen. Rob Portman of Ohio, the lead Republican, said overdose victims are the ones who will benefit.

“This news is a positive step forward, and I’m hopeful that it will increase access to naloxone, a critically important overdose reversal drug that has saved tens of thousands of lives,” said Mr. Portman, whose home state has been battered by the opioid crisis.

Evzio’s initial wholesale cost was $575 in 2014. It it ballooned to $3,750 by 2016 and to $4,100 with the launch of Evzio 2.0 milligram, a higher dose ushered in to reflect the new potency of opioid street drugs.

While some patients with commercial insurance pay nothing out of pocket, others — including Medicare Part D customers — must make copays based on the full list price.

The Senate investigation found federal taxpayers also spent a whopping $142 million on the drug through government health care programs over the past four years.

Company documents showed that outside consultants structured the business model to “capitalize on the opportunity” of “opioid overdose at epidemic levels,” the Senate investigation found.

Surgeon General Jerome Adams is encouraging more Americans to carry naloxone, a highly effective drug that can revive people suffering from opioid overdoses.

It is increasingly commonplace. Some people carry it alongside their house keys or lip balm to be ready in case they encounter an overdose victim.

Evzio is an auto injector that talks a user through the process of administering the antidote, making it a more enticing product than cheaper naloxone, which can be injected with a needle and is best left to first responders or doctors. It is one of two branded versions of naloxone. The other is Adapt’s “Narcan” nasal spray.

Gerard Anderson, a professor at Johns Hopkins Bloomberg School of Public Health, said Kaleo will be able to make a profit by offering two products at wildly disparate prices, even if the label is the only real difference.

“Why are they doing it? The first answer is not everybody buys the generic. If you can have a brand, and some people — including my wife — will always buy the brand, you make more money,” Mr. Anderson said. “The brand is the better product than the generic. That’s the perception of a number of people.”

The company’s move is similar to Mylan’s decision in late 2016, amid congressional scrutiny, to authorize a generic version of its EpiPen, an epinephrine auto injector that can save allergy sufferers’ lives by staving off anaphylactic shock.

The generic, at $300, was half the price of its brand-name version.

“One reason to do this is to pre-empt possible generic competition by capturing part of the market themselves and setting the benchmark for prices,” said Rachel Sachs, an associate professor of law at Washington University in St. Louis.

The price can serve as a kind of “anchor” for other entrants, she said. For instance, Teva’s generic EpiPen just entered the market at the same $300 price set by Mylan for its own authorized generic.

Kaleo said it decided to launch a generic because it is the fastest and most efficient way to get a cheaper product into the marketplace.

Dropping the price of its brand-name product would have upended the byzantine series of agreements the company has with other stakeholders in the supply chain, said Omar Khalil, general manager for addiction and neurology at Kaleo.

He said some customers may stick to the brand-name product based on insurers’ agreements, though the company thinks up to 90 percent of customers will opt for the cheaper alternative.

“We expect that volume is going to shift very quickly to the authorized generic,” Mr. Khalil said.


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