Featured in Health Business Daily, May 9, 2017

Auvi-Q Prepares to Launch at Zero Cost to Most Patients, but Payers Footing the Bill (with Table: List Prices for Epinephrine Autoinjectors)

Reprinted from DRUG BENEFIT NEWS, biweekly news and proven cost management strategies for health plans, PBMs, pharma companies and employers. Subscribe today!

February 3, 2017Volume 18Issue 3

The manufacturer of an insulin autoinjector is once again in the crosshairs of a public that is growing more and more exasperated with the high prices of drugs. But instead of Mylan N.V., which came under fire last year for raising the price of its EpiPen (epinephrine injection) more than 500% since 2007, this time the focus is on kaléo and its Auvi-Q (epinephrine injection), which is poised to launch this month with a price tag more than seven times that of EpiPen. And while the company will offer the product for free to many patients, with payers footing the bill — and receiving rebates — it remains to be seen whether the manufacturer will be able to convince any payers to do so.

Kaléo’s October unveiling of its plans to bring Auvi-Q back onto the market followed months of bad press and congressional outrage over Mylan raising EpiPen’s price to more than $600 for a two-pack of autoinjectors from less than $100 in 2007 (DBN 9/9/16, p. 1). For example, Sen. Amy Klobuchar (D-Minn.) asked the Federal Trade Commission to investigate Mylan for potential antitrust violations. And Sens. Richard Blumenthal (D-Conn.) and Chuck Grassley (R-Iowa) each wrote letters to Mylan CEO Heather Bresch, with Blumenthal calling on the company to “immediately lower the price of your product to an affordable level that truly allows for expanded accessibility,” and Grassley requesting responses to a series of questions “in order to fully understand the pricing for EpiPens.” Even Democratic presidential nominee Hillary Clinton jumped into the fray, calling the price increases “outrageous.”

Drug Benefit News

When kaléo said in October it would bring back Auvi-Q, the move came in the midst of calls for more competition in drug classes as a way to help bring down prices (DBN 9/23/16, p. 1). Indeed, since then, Mylan has launched an authorized generic of the EpiPen (DBN 12/23/16, p. 7), which has a wholesale acquisition cost of $300 per two-pack. Also available are Amedra Pharmaceuticals LLC’s Adrenaclick (epinephrine injection) for a little less than $500 and an authorized generic of that product that’s a little less than $200 (see table, p. 3).

With all the options available, payers have begun to take a more aggressive stance with this class of products. For example, on Jan. 12, CVS Health said that in conjunction with Lineage Therapeutics, Inc., it would offer the authorized generic of Adrenaclick for the cash price of $109.99 for a two-pack (DBN 1/20/17, p. 8). The company says this cash price, available at all CVS Pharmacy locations, is the lowest on the market. And as of Jan. 7, Cigna Corp. stopped covering the EpiPen, EpiPen Jr. and Adrenaclick on its standard prescription drug list, instead covering the authorized generic versions of the products.

It’s into this environment that Auvi-Q will relaunch Feb. 14 with a list price of $4,500, according to kaléo. The company says through its AffordAbility program, people with commercial health insurance, including high-deductible health plans, will pay nothing for Auvi-Q. People without commercial or government insurance who have a household income of less than $100,000 also will receive the product for free.

Sanofi US initially launched Auvi-Q in 2013 after signing a licensing and development agreement with Intelliject Inc. in 2009 for Auvi-Q. But on Oct. 30, 2015, Sanofi announced it was voluntarily recalling all Auvi-Q, both 0.15 mg and 0.3 mg, due to the potential for incorrect dosing. In early 2016, Sanofi said it had signed a deal with kaléo — previously named Intelliject — that would end the Auvi-Q agreement between the companies, returning all rights to kaléo.

Auvi-Q Price Had Been Similar to EpiPen’s

When Auvi-Q previously was available, its price was closer to that of the EpiPen, although a little higher, according to Steve Miller, M.D., senior vice president and chief medical officer for Express Scripts Holding Co., who spoke with AIS Health on Sept. 15 following a conference in Washington, D.C. (DBN 9/23/16, p. 3). Because Auvi-Q was a talking autoinjector that could walk people through self-administration, “it was thought to be better” than the EpiPen, so the company “was able to charge a premium” for it. Miller says that Express Scripts preferred the EpiPen, which cost less. “Auvi-Q kept taking price increases, so EpiPen kept taking price increases” as well as offering rebates, he said.

During a Jan. 19 media conference call unveiling the Auvi-Q launch date, kaléo President and CEO Spencer Williamson said that “the current drug pricing system” is “broken” and based on “stakeholders prioritizing economics over what’s best for patients.” He cited “burdensome” prior-authorization requirements, one of which required a person “to be blind to be covered for Auvi-Q. That’s crazy.”

When one reporter noted that “no [epinephrine autoinjector] product will cost more,” Williamson replied, “No one ever pays the full price” because payers can negotiate discounts and rebates.

But for patients, the pricing scheme means that “no epinephrine autoinjector product, branded or even generic, will cost insured patients less out of pocket than Auvi-Q,” he pointed out. “Let me be clear: This is a bold program.”

Some industry experts had a different choice of words, though. “This pricing model is grotesque,” maintains Elan Rubinstein, Pharm.D., principal at EB Rubinstein Associates. “The Auvi-Q pricing model is an attempt to guarantee kaléo’s profitability at the expense of the third-party payer while holding the patient harmless.” The $4,500 list price is “obscene, laughable and frightening,” he asserts.

And in a Jan. 24 blog on the Drug Channels site, Adam Fein, Ph.D., author of the site and president of Pembroke Consulting, Inc., said that “of course, no one will pay that ludicrous list price.”

Pricing Scheme Could Become ‘Lightning Rod’

Rubinstein tells AIS Health that the pricing scheme “is grotesque because it is likely to become a lightning rod for justifiable criticism of the United States’ laissez-faire approach to prescription pharmaceutical pricing. Renewed focus on this, soon after the Mylan Epi-Pen pricing debacle, could negatively impact the sustainability of our current pharmaceutical pricing and reimbursement, particularly in light of the new administration’s attitude” that prices for pharmaceuticals are too high. Or, as President Trump put it during a Jan. 11 news conference covered by multiple media outlets, pharma companies are “getting away with murder.”

According to Rubinstein, “This pricing model shifts kaléo profitability from the patient, who is held harmless, to the patient’s third-party payer, if that payer reimburses the dispensing pharmacy on the basis of a contractual discount applied to a single-source branded product’s list price. Key, however, will be whether the payer (or its PBM vendor) categorizes Auvi-Q as a single-source branded product or if instead categorizes it as one of several therapeutically similar products to be reimbursed on a maximum allowable cost (MAC) basis — or that simply excludes coverage of the product altogether.”

During the Jan. 19 conference call Q&A, attendees asked no less than four times about insurance coverage, including requesting the names of companies that have said they would cover Auvi-Q.

“We’ve been in discussions with multiple stakeholders,” said Williamson, who declined to identify specific payers that will cover the drug. “We believe multiple plans will cover Auvi-Q.”

That remains to be seen.

“The goal of Cigna’s covered drug list is to support the best health outcomes for customers at the most cost-effective pricing. When a new drug enters the market, we carefully evaluate whether its anticipated health improvements and pricing will deliver greater overall value than alternatives,” Karen Eldred, a spokesperson for Cigna, tells AIS Health. “In this instance, the price for Auvi-Q far exceeds that of epinephrine alternatives with the same expected medical results. Therefore, we have no plans to add Auvi-Q to our covered drug lists. As with other situations, we will work with a customer’s doctor if there is a reason to consider approving coverage for the non-covered brand drug as medically necessary.”

“We see this announcement [as] another egregious pricing scheme that will attempt to gouge payers and damage our health care system,” Ellen Drazen, a spokesperson for Express Scripts, tells AIS Health. “As we do with all new drugs, our clinical and formulary experts are in the process of evaluating Auvi-Q and will determine its formulary status.”

Interestingly, kaléo also has implemented a similar pricing scheme for its Evzio (naloxone) injector, which is used to counteract opioid overdoses. The FDA approved Evzio in 2014, and it launched with a $690 price tag. By last February, that price had increased to $3,750 — and now a two-pack of the product is priced at $4,500. This device also has a speaking mechanism that guides a person through administering the drug.

A Jan. 27 article in The Washington Post reported that the company, “which is trying to blunt the pricing backlash and turn Evzio into the trusted brand, is dispensing its device for free — to cities, first responders and drug-treatment programs,” similar to the EpiPen approach as well. In addition, patients with commercial insurance can use coupons allowing them get the product free of charge. But the company has a “limited charitable donation supply,” which last year was exhausted by the July 17, 2016, publication of a* Los Angeles Times* article on the situation.

View the Post article at http://tinyurl.com/zsrwywd and the Times article at http://tinyurl.com/z9kbe2d.


The AIS E-Savings Club offers regular opportunities to buy AIS products and services at substantial savings. Click here to see the current specials — including $300 off a subscription to Drug Benefit News.

List Prices for Epinephrine Autoinjectors

EpiPen

$630.96*

EpiPen authorized generic

$192.98*

Adrenaclick

$478.90*

Adrenaclick authorized generic

$192.98*/$109.99 cash at CVS Pharmacy

Auvi-Q

$4,500.00

* Based on data from GoodRx accessed Jan. 27, 2017. The prices are the lowest listed and are based on using a free coupon.

Prices are similar for the 0.3 mg and 0.15 mg doses. The products all come in autoinjector two-packs.

SOURCE: Compiled by AIS Health.

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