America’s Opioid Epidemic Puts Drug Pricing Under Scrutiny… Again

It’s long been known that prescription painkiller use in the US has been on the rise, but what’s less well known is the severe effects that we’ve seen when use of prescription painkillers shifts toward abuse. But the truth is, we’re currently in the midst of what is increasingly being acknowledged as an opioid epidemic across the US, as prescription painkiller use spurs addiction, and the street price of these pharmaceuticals directs people to get heroin for their fix.

Surprisingly for many, in 2015, the number of deaths due to heroin overdoses surpassed those due to gun homicides in the US for the first time ever, according to numbers from the Centers for Disease Control and Prevention. All told, more than 33,000 people died from opioid overdoses in 2015. So, what has the pharmaceutical industry done in response to the massive growth in deaths related to abuse of their products? Boosted the price of drugs that can awaken those who’ve overdosed, of course.

“I’ve seen the price of Narcan as well as epinephrine just skyrocket,” says Brandon Heard, a fire department captain in Farmington, New Mexico,” as reported in a recent piece from CNBC. Narcan is the brand name of naloxone, a drug that can quickly reverse opioid overdoses. “It makes it difficult for us as a municipality to purchase the same medications and provide the same treatment and abilities that we have in years past.”

How Does Naloxone Save Lives?

When a person overdoses on an opioid drug like heroin, which binds to opioid receptors in the brain, it can cause the body to stop breathing. Naloxone essentially works by knocking the opioids off the receptors in the brain, restoring breathing, and bringing a person back in seconds. Due to its potentially life-saving efficacy, naloxone has seen a major push to become a household drug, available without a prescription.

In April, Walgreens (WBA) announced they would make the medication available in 110 pharmacies in Alabama available without a prescription, following similar moves in 35 states and Washington DC. Naloxone has also widely been put to use by police and community groups throughout the country, and was even made available in various high schools in Pennsylvania last year.

How Naloxone is Being Priced Out of Reach of Those Who Need It

As the opioid epidemic has grown, so too has the demand for naloxone… and thus, the price of naloxone has surged. In a story that would make Martin Shkreli beam, one generic form of naloxone owned by Pfizer (PFE) rose in price from less than a dollar per millimeter back in 2005 to more than $15 in 2014. Meanwhile, newer delivery systems currently range from $125 for two doses to $3,750 for high-end version of the drug Evzio. Which, as you might imagine, is not exactly pocket change for a great number of heroin addicts out there, most of whom live on less than $20,000 per year.

While $3,750 for a life-saving drug would seem exorbitant to just about anybody, Spencer Williamson, CEO of Evzio manufacturer Kaleo insists the initial price point doesn’t tell the full story. “The list price, which gets a lot of media attention, is a price that really nobody pays,” Williamson says. That’s because Kaleo has a financial assistance program to cover the co-pay for any patient with commercial insurance who would struggle to afford the drug. It’s a program that was put in place by the company after a patient who was prescribed Evzio died because she neglected to fill her prescription, according to Williamson, who claims Kaleo will also cover the whole cost of the drug if a patient faces hurdles in acquiring insurance coverage.

The complex back-and-forth of raising drug prices, only to offer to pay the cost for many customers is a clear indicator of just how labyrinthine the pharmaceutical industry has become in the US today. The system is certainly maddening even to the most ardent defenders of free market principles, who would rightly argue that market competition and advances in technology tend to bring down prices over time. But for the tens of thousands dying of opioid overdoses and their loved ones in the US today, time is simply not a luxury they have to work with.

And thus far, the market has failed to set naloxone at a price that is feasible for many who need it – and not just for high-end versions of the drug like Evzio, but for generics as well. In the US today, there are at least four manufacturers of generic naloxone. Each is priced similarly, and over the past decade, all have raised their prices by more than ten-fold.

While the prices of most consumer tech have plummeted in the past few years, the cost of many life-saving pharmaceuticals like naloxone seem to just keep surging. So what happens when the free market forces of supply and demand don’t bring down prices, putting the lives of thousands of Americans at risk? Simple…

Congress Takes Note

Last fall, the House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law held a hearing on pricing of naloxone and buprenorphine pricing. Further still, Congressman Elijah Cummings, who represents much of Baltimore, as well as Sen. Bernie Sanders wrote a letter to Amphastar in 2015, enquiring about the eyebrow-raising price increases.

In a statement, Pfizer responded to the Congressional criticism, stating that “from the time naloxone entered our portfolio in September 2015, our focus has been on providing access to this life-saving treatment. We believe it is priced responsibly.”

It’s lovely to know that Pfizer believes they’re acting responsibly, but the fact remains, the opioid crisis is very real, and it’s not going anywhere any time soon. And as long as heroin abuse remains a serious issue in America, we have to make very hard choices regarding where we draw the line between protecting free market principles, and ensuring the ability of all Americans to save their own lives.