By: Allison Bunyer
Opioid overdoses are becoming more and more prevalent in the US. Last year alone, 72,000 Americans died due to opioid overdoses;however, thousands more survived because of naloxone (CDC), which is a drug that can be used to reverse overdoses. The drug comes in many forms, from the classic needle injection, to a nasal spray called Narcan, to an auto injector. To inject a person with the needle, you need professional training. This is the cheapest method, with a syringe and medicine starting at $15, but is not accessible to many people who need to know how to save themselves or others in a dire situation. The Narcan device is becoming more and more accessible, with the price of $125 for a pack of 2. Many organizations across the country are starting to hand out these devices for free, but device is still very expensive. The final product, the auto injector Evzio, is made by the company Kaleo, who also produces the epinephrine auto injector, Auvi-Q. The auto injector for naloxone costs around $4000 for a pack of two (Bloomberg). Something needs to be done to control this industry, or soon the most accessible means for reversing overdoses will not be available to the average consumer. 
Kaleo, the pharmaceutical company that produces the auto injector Evzio has a monopoly over the auto injector device. The device gives you instructions on how to use the device, where to insert, how long, and talks through the process with you. The company uses almost the identical device for both naloxone and epinephrine. Because they have the only device of its kind, they are able to charge high prices for their products in an effort to make the most money they can. This device is the easiest to use out of the three options for delivering naloxone. When the product was first introduced into the market, its price was $690, and has risen to $4000 today (The New England Journal of Medicine). Though they have patents protecting Evzio, even if someone wanted to create a similar product, the industry is too hard to enter. Due to high costs of manufacturing pharma products and creating a device that can deliver the drug, a lot of time would be needed to create a product of its kind. The high barriers of entry make this industry a oligopoly because all of these products use naloxone, but just deliver it in different ways.In many cities around the US, organizations are receiving grants to buy devices like Narcan to distribute to citizens. Dr. Jennifer Plumb, a Utah pediatrician and founder of Utah Naloxone hands out overdose kits to people in the Salt Lake City are to prevent overdoses. Utah has the 4th highest rate of overdoses in the US, causing its citizens to be at one of the highest chances of overdosing (Utah Naloxone). Naloxone companies operate in the way that allows first responders and cities to purchase the drugs at half the price the average consumer would pay (CBS). But, that means Narcan, in a pack of 2 still costs around $63. Many cities now have to weigh the opportunity cost of purchasing these lifesaving drugs. The money spent on these devices could be going towards new roads or buildings, but instead must be spent on saving their citizens. Some cities see the benefits of purchasing Narcan or Evzio, but some do not and leave their citizens without easy access to overdose reversing drugs.
Since Narcan has been legalized to be used by the public in 2017, many doctors have begun co-prescribing naloxone with opioids (IHS). By co-prescribing, the patient has access to the naloxone, in case of an overdose. This has caused a deeper look into what patients are paying for the lifesaving drug. Pricing for the products can vary based on many factors. Many insurances, including Medicaid and Medicare will pay for naloxone, but not Narcan (Prescribe 2 Prevent). This causes patients to have to be trained how to administer the drug, how to use the needle and the medicine in the correct way. Kaleo has looked at the situation very differently and has created a price discrimination method that can give the medicine free to many patients. If an insurance company will not pay for the auto injector, Kaleo will step in and give the product free to the consumer (CBS). Kaleo also uses their own pharmacy that mails the product to the patient, allowing doctors to go through minimal paperwork and an easier process. But, if your insurance company does agree to cover the cost, all the consumer has to do is pay for the copay. This process causes price discrimination to come into play because people are being charged different prices, based on the insurance they have or the access to medical care they have as well. Kaleo makes money from the insurance companies that will pay for the product, which eventually covers the cost of the free auto injectors they give out, since the cost to produce Evzio is $80 (CBS).Naloxone is very important, as it plays a large part in saving the lives of Americans who overdose. With drug companies taking advantage of this new need in our world, something needs to be done to make sure people are not paying outrageous prices for life saving needs. Oligopolies and price discrimination need to be addressed to make this industry fair for consumers.
For additional info on using the Evzio, check out this video:
https://www.youtube.com/watch?v=mtdPk__7xlc
Works Cited
Caldwell, Tiffany. “A Doctor Focused on Preventing Drug Overdose Deaths in Salt Lake City Now Plans to Run for Jim Dabakis' State Senate Seat.” The Salt Lake Tribune, 11 Mar. 2018, www.sltrib.com/news/politics/2018/03/12/doctor-focused-on-preventing-overdose-deaths-in-salt-lake-city-now-plans-to-run-for-jim-dabakis-state-senate-seat/.
“FAQ.” Prescribe To Prevent, prescribetoprevent.org/faq-2/.
“Pain and Opioid Use Disorder .” Indian Health Service, www.ihs.gov/opioids/.
“The Rising Price of Naloxone - Risks to Efforts to Stem Overdose Deaths | NEJM.” New England Journal of Medicine, 8 Dec. 2016, www.nejm.org/doi/full/10.1056/NEJMp1609578.
Stahl, Lesley. “Evzio: The Overdose-Reversal Drug with a $4000+ Price Tag.” CBS News, CBS Interactive, 18 Nov. 2018, www.cbsnews.com/news/evzio-the-opioid-overdose-reversal-drug-naloxone-with-a-4000-price-tag-60-minutes/.
“Utah Naloxone - Home.” Utah Naloxone - Home, www.utahnaloxone.org/.
I wonder how the availability, or lack of it, will impact how doctors prescribe opiods. If the Naloxone is less available will doctors more prudently prescribe opiods? If Nalaxone is more available will doctors more freely prescribe opiods and prescribe the overdose reversing drug along with it? I'm curious to know how this debacle will impact, not only the economy, but the pandemic opiod crisis that plagues the world today.
ReplyDeleteEpinephrine injectors have stayed at ridiculous prices for a long time. I need an epinephrine injector due to my allergy, and it’s insane how expensive they can range. It’s vital to many people’s lives, so the companies know that they’ll still gain profit because the consumers need it. The opioid reversion injector is a creative idea with a similar device that walks you through how to use it. I never would have thought this would be a device accessible to society, and that the dilemma would have progressed to this dangerous of a level. Auvi Q’s are also the cheaper alternative to the Epi-Pen, and even then, Auvi Q has high prices. This new injector to save opioid overdoses will probably increase in price as well, because it can save many lives. However, if it would remain consistently affordable, more lives could be saved and more recoveries could start.
ReplyDeleteUnfortunately, this monopolistic behavior is quite common in the medical world. One fairly famous example, as mentioned, is EpiPens. Pharma products are artificially inflated, because they don't really face much competition, which makes it harder for people to obtain the lifesaving medicine they need. This is one area in which the government should really step in to create a price ceiling so that more people can afford the medicine they need.
ReplyDeleteThis raises many questions about how a city is supposed to use the money. I initially understood those first responders are equipped with Naloxone, but I never knew how expensive it was. To pit topics like saving lives from overdoses, or saving lives from safe roads against each other, each city must decide how to use the limited money. Detroit, for example, has a high rate of overdoses and has been ranked as one of the most unsafe cities to drive in. How is the government supposed to decide who to save? How much does the economy play a role in their decision versus other principles such as religion, ethics or utilitarianism? How can we now better understand the way to analyze the costs. Does it come down to passively watching the death of motorists to save overdose victims or is there more that can be done.
ReplyDeleteWhile there are many examples of medical companies being able to raise their prices to a ridiculous amount I think this example is a little different. While this device is life saving in the midst of the opioid epidemic should it be the government's responsibility to provide these to citizens? Or rather should they spend more money on prevention and rehab? Also will having this device encouraging citizens to use drugs more because they don't need to worry about overdosing?
ReplyDeleteA drug as powerful as Naloxone, especially when it takes so much money to make just a 2 pack of the product. But human life doesn’t have a price tag. Something as powerful as reverting an overdose may cost hospitals money, but they’re saving literal lives. Let the companies have their money if it means saving lives.
ReplyDeleteAfter reading your post I started to wonder what the world would be like without this medicine. Would the world be better suited to not having Narcan? If this device wasn’t produced would people stay further away from drugs like heroin or opium due to no reversing drug like Narcan- or would millions continue with their overdoses and our population would continue to plummet? In my opinion I want to believe that more people would consider the hazards of no real life saving drug to bring them back from their poor choices but the other part of me still believes that people will still do it because they are addicted to it- making them crave more and more until they reach their limit.
ReplyDeleteThe medical field in US in general has very high prices in comparison to the value of the products being received. A patient in the US is likely to pay two times as much money for a drug or procedure than patients in Europe. This stems from the creation of monopolies, which the US fails to prevent. The AMA and government work together to create the ability for high prices in the medical field. Other countries such as Canada will decide the price of the drug and force the company to sell at that price, to protect the consumers.
ReplyDeleteI agree that something should be done in order to lower prices for these life saving medical devices. However, the problem in fact lies in demand; because these products are necessities, demand is inelastic and thus customers are not greatly affected by a change in price. On the other hand, I do feel like these companies have an obligation to be involved in price discrimination, as Ezvio is, as it makes the drug more accessible to those who would otherwise not be able to afford it. Furthermore, price discriminating helps the oligopolies themselves because it takes the consumer surplus and turns it into profit. Finally, as others have brought up, I wonder if it is the government's responsibility to pay for these CDC products; should they rather focus on prevention while it remains the sole responsibility of doctors, insurance companies, and the consumer to pay for and prescribe the drug?
ReplyDeleteAfter reading your post I am curious as to how much the company is worth because by price discriminating, Kaleo is maximizing their profit by turning consumer surplus into a profit. Although it may be imperative to price discriminate so that lower-income consumers have the means to purchase this necessity, it could also create difficulties. If consumers paid the full and expensive price of the Naloxone injector, and were to find out that others received it at a discounted price, chaos and anger would pursue.
ReplyDeleteIt is frustrating to know that there are many different products doing the same thing, but the most effective is the most expensive. Kaleo may be doing something that benefits their company, but is it socially acceptable? Since the demand for life saving medical equipment is so high, the industry is able to set prices higher because they know people are always going to purchase it, the demand is inelastic. As previously said, Kaleo is able to do something for themselves, by price discriminating - they can charge different prices to different people. For such a critical piece of equipment, it should be available for everyone at the same, low price. It's hard to say what would happen if the consumers realized the inequality, in the sense that they would be angry, but not really able to do anything since Kaleo is part of a powerful oligopoly. I think that with the opioid epidemic today, products like these need to be made accessible for most everyone. For once, a greedy industry should consider its consumers.
ReplyDeleteYour post makes me wonder the ethics behind the high prices of these products. Although lifesaving products have a large benefit, that doesn't mean your income should determine if you survive or not. The opioid crisis in Utah is very dangerous, however if it can be counteracted with more people like Dr. Plumb it will lead to positive results in the community. The price discrimination is hurting the consumers because they are unable to purchase the product, and while the may lead to exorbitant profits for Kaleo it overall hurts the people who need it most.
ReplyDeleteThis article was interesting to me, as I have not previously heard of a drug that could reverse overdoses. When reading this blog post, I began to think how Evzio is in a similar situation to what EpiPen experienced, in which they are a monopoly for an essential good, allowing them to be price makers and have a high selling price. However, I wonder what the success and profit difference is between EpiPen and Evzio, due to the fact that Evzio effectively utilizes price discrimination to maximize their profit. If Evzio is more successful from using this method, should EpiPen look in to finding a way to incorporate this as well?
ReplyDelete