Price Soars For Key Weapon Against Heroin Overdoses

Originally published on October 28, 2015 12:01 pm

Around the U.S., a worsening heroin epidemic has more and more cities turning to the anti-overdose drug naloxone to reduce deaths from abuse. Also known as Narcan, the medication blocks the effects of opioids and reverses the respiratory depression that occurs during an overdose.

Baltimore recently stepped up its naloxone training, focusing on drug users, and their families and friends. So far this year, city health workers have taught nearly 4,400 people how to use naloxone. That's more than quadruple the number trained in 2014.

A big concern for Baltimore and other cities is the price of naloxone, which has risen dramatically as demand has gone up. In February, the Baltimore City Health Department was paying about $20 a dose. By July, the price had climbed to nearly $40 a dose.

Maryland Rep. Elijah Cummings, ranking member of the House Oversight and Government Reform Committee, places the blame squarely on the manufacturers and, in particular, Amphastar Pharmaceuticals, the company that makes the naloxone most widely used by health departments and police.

"When drug companies increase their prices and charge exorbitant rates, they decrease the access to the drug," Cummings said this summer. "There's something awfully wrong with that picture."

Amphastar says it raised prices because of increased manufacturing costs, including a rise in the prices of raw materials, energy and labor.

Naloxone isn't a new drug. It was first approved by the Food and Drug Administration in 1971 as an injectable medication, used primarily in hospital settings.

Today, Baltimore and other cities are choosing intranasal naloxone for community use — naloxone that can be sprayed into the nostril and doesn't require needles. The intranasal delivery method isn't explicitly approved by the FDA. Amphastar is currently the only company that makes naloxone in a dosage that can be administered that way.

Daniel Raymond is policy director for the Harm Reduction Coalition, which advocates for broader access to naloxone. He discussed naloxone pricing over the years, the changing market for the drug and what it means for prices and competition. Here are highlights, edited for length and clarity, from a conversation with All Things Considered's Audie Cornish.

On the price of naloxone a decade ago

When we started following this issue, it was over 10 years ago, and for the injectable naloxone it was about a dollar a shot. Each vial was dirt cheap. So it's been a really dramatic increase over a fairly short period of time.

On how the market for naloxone has changed

Emergency rooms have traditionally been the main purchasers of naloxone. It's also used by anesthesiologists, and it's been used on some ambulances. So it was typically a hospital market. The hospital would buy in bulk, and there wasn't a whole lot of prescribing going on.

Now we've got over 40 states that have passed laws facilitating access to naloxone, and have first responders carrying it and community distribution. That's the majority of the country that's moving in this direction of making naloxone more accessible.

On intranasal naloxone and potential new competitors

Amphastar is currently the only manufacturer in the U.S. who makes the dosage of naloxone used for intranasal administration. They have no competition. They can set whatever price they want, and almost a year ago, they decided to almost double that price. It's hitting programs and health departments and first responders across the country really hard.

There are a couple companies that saw the need for an FDA-approved intranasal naloxone device. They've designed new devices that they've submitted to FDA for approval. So, I'm hoping by the end of the year, we'll have one or two other intranasal naloxone devices available. The challenge will be whether these companies decide they want to compete on price, or they just want to take a share of the market.

On Evzio – the naloxone auto-injector

What the makers of Evzio — a company called kaleo — thought about was: Can we make something that your grandmother could use? So they designed this cartridge that's an auto-injector. It actually talks you through the process of reversing an overdose. Now, they needed to do the research to show they had the right dose, to show that people could actually follow the instructions and use it without any training at all. And they needed to do all the manufacturing and assembling. So those R&D costs start to add up. The costs of the production line start to add up. Their gamble was, if they could take the complexity of educating somebody out of the picture, then they could drive more doctors to prescribe this.

On pharmaceutical companies' pricing strategies

I think their choice in front of them is that they can have a narrow market at higher prices, or a much broader market at lower prices. Either way, they're going to making money. The latter way, they're saving more lives.

NPR and All Things Considered will continue reporting from Baltimore in the coming months, checking in with Baltimore Health Commissioner Leana Wen and her team periodically. Stay tuned for future stories.

Copyright 2015 NPR. To see more, visit http://www.npr.org/.

Transcript

AUDIE CORNISH, HOST:

Yesterday, we reported from Baltimore on the city's efforts to fight a heroin epidemic. A key part of that plan is the drug naloxone, which can reverse an overdose not just for heroin, but for all kinds of opiates. And Baltimore's not alone. Many cities now give it to their police and emergency responders, and as that's happened, the price of the drug is way up. Baltimore is paying close to $40 a dose now, up from $20 earlier this year, and lawmakers have noticed. Maryland congressman Elijah Cummings spoke about it earlier this summer and blamed the manufacturers.

(SOUNDBITE OF ARCHIVED RECORDING)

ELIJAH CUMMINGS: When drug companies increase their prices and charge exorbitant rates, they decrease the access to the drug. There's something awfully wrong with that picture.

CORNISH: Cummings' main target is Amphastar. That's the company that makes the naloxone most widely used by health departments and police. It comes in a prefilled syringe that can be attached to an atomizer and sprayed into the nostril.

Now, using naloxone this way is not FDA approved. It's an off-label use. Naloxone was approved as an injectable drug back in 1971. Today, it's not under patent. It's a generic. So why is it so expensive? To help answer that question, we brought in Daniel Raymond. He's policy director for the Harm Reduction Coalition. It's a group that advocates for broader access to naloxone.

DANIEL RAYMOND: When we started following this issue, it was over 10 years ago, and for the injectable naloxone, it was about a dollar a shot. Each vial was dirt cheap, so it's been a really dramatic increase over a fairly short period of time.

CORNISH: And you said it's injectable. So at that time, it was where, emergency rooms? Who was using it?

RAYMOND: Emergency rooms have traditionally been the main purchasers for naloxone. It's also used by anesthesiologists, and it's been used on some ambulances. So it was typically a hospital market. The hospital would buy in bulk, and there wasn't a whole lot of prescribing going on. There wasn't very much happening at the patient level. So it was a very different kind of market than when you think of cholesterol drugs or antibiotics.

CORNISH: And now you have all of these police departments, health departments. I mean, some of them want to give it away. That's what we're learning this week. That's a whole different scale, and that's definitely affecting the market and price.

RAYMOND: It's definitely affecting the market and price. We've got over 40 states, most of whom, only in the last couple of years, passed laws to facilitate access to naloxone - first responders carrying it, community distribution. That's the majority of the country that's moving in this direction of making naloxone more accessible.

CORNISH: Baltimore, like a lot of other health departments, is paying nearly double what they were...

RAYMOND: Yeah.

CORNISH: ...Just in February for naloxone. In this case, we're talking about the intranasal spray version. So why can't they just buy it from someone else?

RAYMOND: Amphastar is currently the only manufacturer in the U.S. who makes the dosage of naloxone used for intranasal administration. They have no competition. They can set whatever price they want. And about a year ago, they decided to almost double that price, and it's hitting programs and health departments and first responders across the country really hard.

CORNISH: So if there's one manufacturer, it's not something that you can ramp up easily, right? I mean we can't expect another naloxone factory to kind of pop up in the next two years.

RAYMOND: Well, what we can expect is, in the next few months, there's a couple of companies that saw the need for an FDA-approved intranasal naloxone device, and they've designed new devices that - they're submitted to FDA for approval. So I'm hoping by the end of the year, we'll have one or two other intranasal naloxone devices available. The challenge will be whether these companies decide they want to compete on price or they just want to take a share of the market.

CORNISH: So we've also heard about a new product called EVZIO, and that is a version of naloxone that comes in an auto-injector, which, for people at home, is kind of like an EpiPen, and the wholesale price of this is much higher - nearly $300 a dose. But help us understand how you get to $300, right? How do you start with a drug that could be a few dollars in its regular - like, a little vial - to something that's in the order of the few-hundred?

RAYMOND: What the makers of EVZIO, a company called Kaleo, thought about was, we've seen these naloxone products, but they require some training; can we make something that your grandmother could use? So they designed this cartridge that's an auto-injector. You don't see the needle, and it actually talks you through the process of reversing an overdose.

Now, they needed to do the research to show that they had the right dose. They needed to do the research to show that people could actually follow the instructions and use it without any training at all. And they needed to do all the manufacturing, assembling, so those R&D costs start to add up. The cost of the production line start to add up. And their gamble was, if they could take the complexity of educating somebody, if they could take that out of the picture, then they could drive more doctors to prescribe this because the doctors wouldn't have to have those potentially awkward conversations with their patients about, you might be at risk of an overdose.

So their hope is that while it's $300 per cartridge, if they can get insurers to pay for it and doctors to prescribe it, then the out-of-pocket cost will be minimal to the patients.

CORNISH: So when you look at that or any other version of the drug, do the pharmaceutical companies have a point that the effort that they're putting into making naloxone easy to use should be worth the higher price?

RAYMOND: I would say that they have definitely invested some R&D into making naloxone simpler to use, simple to administer, but I think that their choice in front of them is that they can have a narrow market at higher prices or a much broader market at lower prices. Either way, they're going to be making money. The latter way, they're saving more lives.

CORNISH: That's Daniel Raymond, policy director with the Harm Reduction Coalition. I spoke with Spencer Williamson, the CEO of Kaleo, the company that makes the auto-injector, and he said access is something they're working on. While they try to get more insurers onboard, they're donating kits, including to places like Baltimore.

We also heard from Amphastar. The company told us that it manufactures all of its drugs in the U.S. and that a steady increase in manufacturing costs, including a rise in the price of raw materials, energy and labor, drove them to raise prices on a majority of their products last year, including naloxone. Transcript provided by NPR, Copyright NPR.

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