An alternative to the EpiPen has been released on the market by Kaléo, which bears a hefty price that is more than seven times that of the leading drug, but manages to have the lowest out-of-pocket costs for patients due to an intricate system of coupons and discounts.

Mylan, the pharmaceutical company holding the rights to EpiPen, received much flak from inflating the price of the EpiPen, its epinephrine auto-injector, from $56.64 to $317.82.

A convoluted price plan

However, on 14 February, Kaléo released its competing product, the Auvi-Q, priced at $4,500 per pack of two. Among its features are an automatically-retracting needle and a voice prompt system with step-by-step instructions for less than $5 worth of epinephrine.

Nevertheless, no competing product "will cost a commercially insured patient less out of pocket than Auvi-Q", according to the company’s chief executive, Spencer Williamson.

Kaléo offers a program called Auvi-Q AffordAbility, whereby the devices are free of charge to patients with commercial insurance or those without insurance and who have a household income of less than $100,000. Others without insurance have to pay $360 in cash for one pack.

On the other hand, insurance companies are expected to cover the cost.

"The reason the list price is high is it's the only way we can make sure patients have access and can get it for $0," said Williamson.

Pricing could have harmful effect on overall healthcare costs

Many question the viability of this pricing, as it would have the opposite effect – that the high prices would eventually deny accessibility to those most in need. Prescription growth for the product is slow as many are deterred by the price.

“To me that seems like a very backwards pricing model,” said Joseph Ross, an associate professor at Yale University.

“It’s a brilliant auto-injector – is it fair to say it’s worth $4,000 itself? That’s $3,000 more than your iPhone, and you can only use it once,” Ross added.

Critics also contend that Kaléo’s practice could lead to the detrimental effect of hiking up overall healthcare costs, and insurance companies would then redistribute this to patients in the form of higher fees to remain profitable.

“What is the purpose of the list price being so high, if in fact on the back end they offer all of these rebates? It lacks transparency,” questioned Tonya Winders, president and CEO of Allergy and Asthma Network.

A case of action motivated by questionable ethics

Kaléo holds patents on two products – the aforementioned Auvi-Q and Evzio, another auto-injector which delivers naloxone. Both used to cost $450 and $690 respectively, until in 2015, when Auvi-Q was pulled from the market due to inaccurate epinephrine dosage, causing losses up to $110 million. Both now cost $4,500, a price increase of more than 500%.

“We believe the prices for Auvi-Q and Evzio are egregious and are another example of how some drugmakers try to get around formulary management tools that help save payers and patients money,” said Jennifer Luddy, a spokeswoman for Express Scripts.

This is not the only time the ethics of the pharmaceutical industry have been called into question. Early this year, Mallinckrodt Pharmaceuticals was charged with having undertaken anti-competitive practices and increasing the prices of its Acthar gel by 85,000%. Trump’s recent election in the US has also introduced uncertainty into the future of the industry, with some speculating that healthcare costs could even rise further.

“I am concerned about what this means for the overall system,” Winders commented. “The greater question is – why do pharmaceutical companies feel the need to price these products in this structure?” MIMS

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