Cost of Kaleo Pharmaceutical’s Evzio Drug Skyrocketed 600%, Costing Taxpayers Millions
Nearly a third of the U.S. Senate sent a letter in February 2017 questioning Kaleo, a Richmond, VA-based drug company that had skyrocketed the price of its injector device delivering doses of naloxone opioid overdose antidote from $690 in 2014 to $4,500.
Yet that didn’t stop leaders of Physicians Against Drug Shortages (PADS) from promoting another of the pharmaceutical company’s drugs. Could this be because Eric Edwards, a co-founder of Kaleo Pharmaceuticals, is a co-chair of Physicians Against Drug Shortages? The group claims it is a “pro bono” advocacy group with a goal of ending “the chronic, unprecedented generic drug shortages by restoring integrity and market competition.”
The connections between the physicians’ group and Kaleo, and the similarity of their arguments about why there is a shortage of life-saving prescription drugs, raises questions.
A letter from Senators Mark Warner, Tim Kaine and 29 of their Senate colleagues was sent to Kaleo President and CEO Spencer Williamson. It read in part:
“Such a steep rise in the cost of this drug threatens to price out families and communities that depend on naloxone to save lives.”
Kaleo’s Responses Trigger Inquiries
The company’s responses to questions in the senators’ letter triggered a bipartisan inquiry by the Senate Permanent Subcommittee on Investigations and sparked a 60 Minutes segment. Both asked how Kaleo, a privately-held company, could justify billing Medicare and Medicaid $142 million for its product.
Throughout the period during which the Senate and 60 Minutes were conducting investigations, Kaleo sought to shift the blame to insurers and middlemen that negotiate for health plans.
Many experts and policy makers, including Senators Warner and Kaine, have cited naloxone products (of which Kaleo’s Evzio is one option) as “an important part of any community’s response to our nation’s opioid crisis.”
Amidst mounting pressure from the Senate investigation and 60 Minutes expose, Kaleo announced on December 12, 2018 that it will begin offering a generic version of Evzio at $178.
PADS Blames GPOs and PBMs
While the Senate Subcommittee and 60 Minutes were investigating Kaleo, PADS Chairman Robert Campbell, M.D., and Co-Chair Marion Mass, M.D. were publishing op-eds, speaking to editorial boards and appearing on television individually, jointly or with other members and friends of the physicians group. Their message was to blame GPOs and Pharmacy Benefit Managers (PBM) for high costs. Here’s a list of 16 media outlets that quoted or published op-eds, editorials or comments written by those affiliated with the physicians’ group and its Executive Director Phillip Zweig.
- In May 2018, Dr. Mass promoted Kaleo’s product Auvi-Q on her Facebook profile stating, “If you ask your physician they can write you for the Auvi-Q and you can get a free product from a company that does not care to consort with the PBM.”
- While promoting Auvi-Q, Dr. Marion Mass and Dr. Robert Campbell of PADS wrote an op-ed in Penn Live blaming group purchasing organizations for the making the winter flu crisis worse. In that op-ed, they also criticized one of the direct competitors to Kaleo’s Auvi-Q, Mylan’s EpiPen.
- In March 2018, they wrote another op-ed in the Washington Times blaming drug shortages on the “provision in the Medicare and Medicaid Patient and Program Protection Act of 1987 gives Group Purchasing Organizations (GPOs) a ‘safe harbor’ for monetary kickbacks from medical suppliers.”
- Another May 2018 op-ed in The Intelligencer of Doylestown, PA quoted Mass as saying, “The GPOs and PBMs don’t do research, manufacture or even distribute. They write contracts…and cost the US $200 billion per year, according to Physicians Against Drug Shortages co-chair, Dr. Marion Mass, of Bucks County.”
Kaleo Co-Founder Edwards appears to have made only one public comment when, on April 26, 2018 he promoted Auvi-Q on the Kaleo website. Meanwhile, he was listed as a co-chair by PADS. In his 60 Minutes interview, meanwhile, Kaleo CEO Williamson attempted to avoid responsibility by shifting the blame for his drug’s sky-high prices to anywhere other than decisions he had made.
As recently as January 2, 2019, Physicians Against Drug Shortages was defending Kaleo on Twitter, despite the recent investigations:
Physicians Against Drug Shortages claims to have no conflicts of interest, no vested financial interest in this policy issue, no outside funding. But their connections to Kaleo, Retractable Technologies and other medical device companies, combined with the similarity of policy arguments, appear to undermine the group’s credibility.
Scott Peterson is executive director of Checks and Balances Project, an investigative watchdog blog that seeks to hold government officials, lobbyists and corporate management accountable to the public. Funding for C&BP is provided by Renew American Prosperity and individual donors.