Epinephrine is an incredibly useful drug that treats allergic reactions (like anaphylactic shock) and asthma attacks. A dose of epinephrine is exceedingly cheap, costing $10 or under. People with certain allergies tend to keep a dose or two of epinephrine on their person at all times in case of emergency.
The methods of delivering epinephrine are incredibly costly. Since the drug needs to be taken almost immediately after an allergic reaction begins, one cannot simply take the time to prepare a needle and inject it intravenously. Instead, auto-injectors like EpiPen (the most popular method of delivery) and Adrenaclick create a user-friendly and quick method of injecting epinephrine into the user. The companies making these drugs famously charge anywhere from 100 to $600+ just for two auto-injecting epinephrine needles that only deliver around $5-$10 worth of the drug.
Kaléo, a small U.S. pharmaceutical company, is trying to shake the epinephrine market by introducing a revolutionary new product. There’s only one problem: it costs over $4000.
Kaléo plans on selling Auvi-Q, an EpiPen competitor, for $4,500. But there’s a catch.
Kaléo will charge customers who have insurance $0 for the Auvi-Q, regardless of whether or not their insurance covers the drug. If you come from a family with an income of less than $100,000, you will also get the drug for free. If you do not meet either of these qualifications, the drug will cost you $360, or a little over what a generic EpiPen two-pack costs.
Why the weird pricing? Kaléo hopes to make big bucks through insurance companies paying full price for Auvi-Q.
After Auvi-Q was previously recalled for faulty products or not delivering enough epinephrine, Kaléo found itself in some debt. They hope that by having insurance providers pay the steep price for Auvi-Q, they’ll be able to make a decent amount back. Pharmacies and other industry professionals, however, aren’t so convinced that this idea works.
What makes Auvi-Q so special? It talks to you.
Auvi-Q has an audio feature (yes, on the injector) that instructs users how to actually use it. This prevents bad usage while calmly coaching users as they avoid suffering from shock or an asthma attack. This is more helpful and, for most users, ultimately cheaper than EpiPens.
You can’t invest in Kaléo, and that might be a good thing. Mylan has the EpiPen market cornered. Their next biggest competitor sells their product for a lot less, but they sell a lot less of their product. Kaléo also only makes two drugs (Auvi-Q being one of them), which means their bottom line relies a lot on two products that are marked up exponentially. They’ll likely have to reexamine their pricing structures…or face some pretty dire monetary consequences.