Your friend is on the floor unconscious. The culprit: a heroin overdose. You panic, but then remember a gadget that can save her life. She told you where it would be if this ever happened, didn’t she? You run to her bedside table, fling open the drawer, and grab the compact purple and yellow injector. After you pull off the lid, the device speaks, telling you to place the plastic case on your friend’s thigh, press down, and dispense the life-saving drug inside. You do what it says, and a few seconds later, your friend’s eyes open wide. She’s alive.
That’s the scenario pharmaceutical company Kaleo envisioned when it developed the Evzio auto-injector. The phone-sized gadget is new, but the drug it administers—naloxone—is an old and inexpensive chemical that works immediately to reverse the effects of opioid overdoses. In 2014, it got FDA approval and hit the market for a list price of $575, an exciting new tool to battle the country’s overwhelming opioid epidemic.
But three years after Evzio came out, its cost has exploded to $4,500 per prescription. Like the pharma company Mylan did with Epi-Pen—another simple, life-saving drug—Evzio’s maker has raised its price as high as the market will bear.
If you have a friend or loved one who’s addicted to painkillers or heroin, they likely won’t pay anything for the device. That’s not how Kaleo makes money. Insurance holders can get the medication for $0. Same if you make less than $100,000 a year; if you pay cash, it’s just $360. Typically, pharma companies set the highest retail price they can get insurance companies to pay and then work out rebates with individual payers. But with Evzio, there’s yet another third party to bilk, one with a government mandate to buy the drug in bulk: law enforcement agencies.
In the past few years, state legislatures responded to the growing opioid epidemic by passing laws requiring first responders to carry naloxone. President Obama even signed a law last summer to provide $181 million in funding for naloxone programs. “There was this major push to get cops access,” says Leo Beletsky, a professor of public health at Northeastern University who helped the Department of Justice write guidelines for naloxone. “Now thousands of law enforcement agencies have equipped their officers with naloxone.” That created an entirely new market for the drug.
To drive awareness of the product, Kaleo has handed out 200,000 Evzio devices free to groups that work with addicts, including to law enforcement, though the company hasn’t released information on how many agencies negotiated deals or what they paid. When Beletsky was working with one nonprofit group in New Mexico, people asked for Evzio directly. “They call them talkies. It’s a cool, sleek compact gadget,” says Beletsky. It’s the perfect example of tech taking something clunky but critical and making it sleek and accessible.
Except for the whole price thing. Now that the New Mexico group has run out of talkies, they can’t afford to buy any more. That doesn’t mean the opioid-addicted people in New Mexico are stuck high and dry; they still have access to the old-school syringe options or the nasal spray Narcan, which just got FDA approval last year and offers bulk deals to harm reduction groups at $37.50 a dose.
But lawmakers want families and first responders to have the easiest-to-use version of naloxone—and when states started passing laws to increase access to naloxone, Kaleo benefited. Florida, Ohio, and Louisiana passed laws in the last three years that required first responders to carry FDA-approved versions of naloxone—which, until last year, only included Evzio. Beletsky says Kaleo actively lobbied to have the laws written that way. (Kaleo did not comment.) Legislators in Florida and Ohio later rewrote the laws so cheaper options are allowed. But other states continue to push for brand names. State Senator Royce West introduced a bill in Texas last year which would limit naloxone options to Evzio and Narcan.
Senator Claire McCaskill, along with 30 other Democratic senators, sent a letter to Kaleo earlier this month demanding an explanation for the price increase. In response, CEO Spencer Williamson pointed out all the outreach programs and rebates the company offers. “To support our enhanced patient access program and to ensure that as many patients as possible have access to Evzio for $0, the list price was increased,” he wrote in a letter sent back to lawmakers and the press. In other words, the people who do pay—insurance companies and some government agencies—are footing the bill for people who pay nothing. “It’s kind of like a game that pharmaceutical companies play,” says Beletsky. “[Kaleo] is trying to make up as much profit as they can before they get scooped.”
Which, given that Adapt Pharma’s Narcan nasal spray now has FDA approval and costs much less, won’t be long. In fact, in Vermont, which has been hard-hit by the opioid epidemic, pharmacies can now sell Narcan over the counter. It may not be as flashy as Evzio—it doesn’t talk—but it’s nearly as simple to use and it works. And most importantly, it doesn’t cost $4,500.