Kaléo Pharma, an American pharmaceutical company, is in hot water for raising the cost of an overdose antidote and for selling an epi-pen alternative called the Auvi-Q for $4,500. The Auvi-Q is automatic and offers audio instructions on how to administer the antidote, less than $5 worth, to the patient. In 2015 the Auvi-Q was listed at $450- 10% of the current price.
What is quite interesting is that the Auvi-Q was pulled from the market after malfunctioning- it was delivering inconsistent doses of epinephrine, failing to do precisely what it is designed to do.
Another intriguing piece of information about the Auvi-Q from Kaléo is that its co-pay, the customer’s out of pocket cost, is quite low relative to the rest of the market for epi-pens. This creates better access to markets for the drug companies, allowing them to sell more drugs. Also, the company says that the high price allows for greater discounts, and the rest of the costs to be shouldered by insurance companies.
This begs the question- how in the world is it ethical or logical to sell a product 10 times the amount of the original price to a customer base that needs the product in order to survive, especially after it had failed previously? This sounds a lot like pharmaceutical greed, something that is not unheard of. The most recent drug related incident of this nature was Martin Shkreli a few years ago, after he jacked the price of an anti parasitic drug from $13.50 per pill to $750 per pill, an action that was clearly unethical.
Kaléo is at a crossroads, the best move for the company could be to keep the price high and reap the benefits of having a very high profit margin. The company could utilize that fact that this product is in such high demand, and people/insurance providers will pay for it if it is needed. However, they could also keep the price lower and still make a profit, though not as high, and keep the price for the Auvi-Q at a much more affordable level for its customers, as well as lower the price of the bill that insurance companies must cover.
Along with the Auvi-Q, Kaléo is under fire for spiking the cost of their opioid overdoes treatment, Evzio. Evzio is also offered for $4,500, and has audio instructions to make it easy for anyone to administer a potentially life-saving injection to themselves or someone else. This administers naloxone rather than epinephrine, still at a very low production cost, allowing Kaléo to reap huge profits from its sale.