Okay-- did some digging about this.  Because I'm just curious like that. 

Firstly, this business of "fair pricing is so old-school... it's not the cost to manufacture... no, more 'properly' it's the VALUE that the drug offers...."   

eughhhh.... no.

http://www.fiercepharma.com/pharma/after-taking-mylan-sen-klobuchar-sets-sights-kaleo-s-4-500-auvi-q


Hmm.. so who is making the money... and HOW...... and HOW MUCH???


http://www.modernhealthcare.com/article/20170120/NEWS/170129991

QuoteIt's been widely reported that the actual list price for Auvi-Q is $4,500, which will be the starting point for insurers to negotiate discounts and rebates. It appears Kaléo will foot the bill for patients with commercial insurers that choose not to cover the Auvi-Q.

It's a bold move that could offer serious competition to Mylan and its EpiPen products, which have no such guarantee of a $0 cost for commercially insured patients. Previous reports have suggested the Auvi-Q had a market share of only 10% when it was available.

"We wish we didn't have to do this, but the system is set up in a way that without this bold move, patients wouldn't get access and be able to afford Auvi-Q," Kaléo CEO Spencer Williamson told CNBC Thursday. "We're confident the model provides access and affordability, and that it is a sustainable model."

Hmm... so... still no info on who is picking up the tab-- or at what profit margin??

http://perfscience.com/content/2145276-kaleo-prices-epipen-alternative-4500-insurance-companies-report

http://www.usatoday.com/story/news/politics/2017/01/19/epipen-competitor-out-february-free-200m-people/96777828/

QuoteStill, the $4,500 list price — even with rebates — is "an attempt to push an extraordinary burden on to the commercial and federal (insurers)," says Michael Rea, CEO of Rx Savings Solutions, which represents insurers.

No one pays the list price, Kaleo CEO Spencer Williamson said Thursday. "Our view is that the most important price is the price to the patient," he said. Anything else would be paid by insurers, he said.

Although Williamson repeatedly said many plans will cover Auvi-Q, he refused to name any of them.

Er-- well, then, why is that list price a thing?? 

That... just.. makes no sense.  It just doesn't.  I don't LIKE things that make no sense-- because there is usually something FISHY behind it.


I think that this is correct, actually--

http://www.latimes.com/business/lazarus/la-fi-lazarus-drug-pricing-evzio-20170217-story.html

QuoteIn his statement to me, Williamson said most people won't pay anywhere close to $4,000 for Evzio. Even with a high-deductible insurance plan, he said, a patient won't pay more than $360 and might end up paying nothing thanks to the company's "enhanced patient access program."

But that isn't price transparency. That's a magician's trick known as misdirection. Williamson is saying, "Don't look at the crazy list price in this hand, look instead at the sweet discounts in this hand."

The upshot is that his company's prices remain indecipherable.

"It's awfully hard to see much value in this opaque approach to real drug pricing," said Nicholson Price, an assistant law professor at the University of Michigan who focuses on healthcare and regulation. "Especially if we want to have patients be more cost-conscious to keep costs down, opaque pricing does us no favors."

What it does do, he added, is "create lots of opportunities for gaming and middlemen."

Kaleo's gamesmanship isn't new. As my colleague Melody Peterson noted in a story about naloxone pricing last year: "Not long ago, a dose of the decades-old generic drug cost little more than a dollar. Now the lowest available price is nearly 20 times that."


The reason Williamson can so confidently declare that the list price for Evzio isn't worth fretting about is because he knows it's completely arbitrary. Drug companies and hospitals routinely open their negotiations with insurers with a made-up price and then settle for a much lower amount, which is what the patient ultimately sees.

Unfortunately, that system, such as it is, no longer works. An increasing number of Americans face the full cost of healthcare as a result of high-deductible insurance plans.

Kaleo might pat itself on the back for its patient subsidies and protections, but the reality is that somebody has to pay the company's bills, either the patient or the insurer. Sky-high list prices for insurers raise premiums for everyone.

What's to be done? At the moment, the only effective tool is public shaming.

So-- I'm thinking that this MUST be taking advantage of some loophole somewhere. 


So-- patient has Rx for a drug.

Company which sells that drug markets it for $10 (say)...
patient's insurance company covers the cost of that drug.... $0 co-pay, patient has the drug they were prescribed....




then new Company BUYS the rights to sell that drug, and marks it up to $1000. 

One of two things (at least for insured patients)--

1.  insurance CANNOT respond rapidly enough to eliminate the drug from the formulary-- and is forced to pay that $1000 because the co-pay on that drug in whatever-tier is still $0. 

2.  insurance CAN eliminate drug from formulary, and does so.  With alacrity, probably.  Patient either pays out of pocket, uses 'patient assistance' or goes without the drug.



So then, how does that pricing/marketing model work for uninsured or government-insured patients?

It is an honest question-- I don't know enough about reimbursement mechanisms to know the answer.  But my suspicion is that the latter has been identified as a profit-center in some way. 

Okay-- this has bearing on the entire Kaleo/Auvi-q thing, too-- because they are using an IDENTICAL pricing scheme-- and yes, I DO call it a "scheme" because this is a newly identified profit center, apparently, in the industry--



http://www.chicagotribune.com/business/ct-high-drug-prices-marathon-muscular-dystrophy-0219-biz-20170217-story.html

QuoteIt's true that patient assistance programs may help patients cover out-of-pocket expenses. Aronin wrote in his letter that Marathon has "developed the most robust patient access program allowed by law," and a document on Marathon's website says it will offer a copay assistance program to people with nongovernmental insurance who face out-of-pocket costs for the drug, but it doesn't say how much that assistance will be.

Aaron Kesselheim, an associate professor of medicine at Brigham and Women's Hospital and Harvard Medical School, called patient assistance programs a "classic marketing strategy" that doesn't solve the larger issue of high drug prices. Some patients might not benefit from assistance programs because they don't know about them, don't qualify for them or the programs last only a limited time.

Plus, they still leave insurers on the hook for most of the cost — an expense that can get passed down to consumers, he said.

"Somebody's paying for that," Kesselheim said. "In the case of private insurance, it's everybody who's paying for it in terms of higher premiums, and in the case of Medicaid and Medicare, it's taxpayers paying for it."

Quote
But the arguments that insurance will cover much of a drug's cost and that patient assistance programs will decrease out-of-pocket expenses don't always reflect the reality patients face when it comes to pricey drugs, experts say.

Those who need costly medications can face thousands of dollars in deductible and co-insurance payments, depending on how their insurance plans cover drugs and whether they get help from patient assistance programs. Even with insurers covering most of the expenses, that coverage can come at a cost to all consumers in the form of higher premiums.

"This idea that the vast majority of people out there are just paying flat $20 copays, it's based on an old understanding of what insurance (does)," said Rena Conti, a University of Chicago associate professor of health policy who studies drug prices.

This is the same problem that I have with Auvi-q's new "free to you!!  why care what our 'retail' pricing structure looks like!  Great product!  FREE!  To you!" scheme. 

They aren't doing this out of the 'goodness' of their hearts.  FAR FROM IT.  They are motivated by profits-- so where are those profits coming from??

Seriously-- consider that.

I'm alarmed because this is a new strategy of some kind, and it's becoming widespread in not only lifestyle drugs, or those where there is an incentive to market the BRAND name drug, over a cheaper generic (that's gone on a while)-- but this is becoming the new strategy with life-saving and RESCUE drugs which have no medical equivalent.

Call me a cynic, but I'm also reminded of how drug dealers traditionally have worked 'marketing' with substances with very high addiction potential-- they know that once you're using, you will come back at any price.   

http://www.reuters.com/article/us-usa-healthcare-drugpricing-idUSKBN15S2E0


The response from Marathon is what is most disheartening of all..


"Ohhh... right.  well, since you mention it, we'll need to just halt sales, then...."

QuoteTwo U.S. lawmakers have called on privately held Marathon Pharmaceuticals LLC to explain how it came to price its newly approved drug to treat Duchenne muscular dystrophy at $89,000 a year when patients have for decades been able to acquire it overseas for as little as $1,000.

The drug, Emflaza, known generically as deflazacort, is a steroid, one of a class of drugs commonly used to treat Duchenne's that patients could import for personal use because it was not available in the United States. Last week it won U.S. approval, closing off that option for patients.

"We are investigating how Marathon set its price for this drug and how much the company stands to make as a result," Independent Senator Bernie Sanders of Vermont and Democratic Congressman Elijah Cummings from Maryland wrote in a letter to Marathon Chief Executive Officer Jeffrey Aronin on Monday, adding that the price tag was "outrageous."

Drug pricing is a hot political issue. Democrats and Republicans have both investigated Mylan NV for sharply increasing the price of its emergency EpiPen allergy treatment. Last year Turing Pharmaceuticals became a household name after it dramatically increased the price of an important antibiotic.

President Donald Trump has said he wants to lower drug prices and increase competition, though he has not spelled out how.

Marathon officials did not immediately respond to a request for comment. In an interview last week, the company's chief financial officer, Babar Ghias, said Marathon took the pricing issue "very seriously" and that its goal was to ensure patients can access the drug for zero to low cost.

The company said the price of the drug reflected its investment in the product.

The Food and Drug Administration approved Emflaza under its "orphan" drug program that provides incentives to drugmakers to develop treatments for diseases with small patient populations. The incentives include seven years of market exclusivity. Duchenne's, a devastating muscle-wasting disease, affects some 15,000 patients in the United States, mostly young boys.


"Marathon will have a monopoly on deflazacort for years to come, preventing less expensive generic competitors from entering the market, despite the fact that this drug is already available in generic form in other countries," the lawmakers wrote.

http://www.cnbc.com/2017/02/13/marathon-pharmaceuticals-criticized-for-outrageous-pricing-of-drug.html

 

Info about what the current US administration seems to be planning--

https://www.washingtonpost.com/news/wonk/wp/2017/02/03/what-ceos-say-happened-in-trumps-closed-door-meeting-with-big-pharma/?tid=pm_business_pop&utm_term=.40cc9ba69217

Apparently, they are NOT intending to negotiate lower pricing directly using the block-purchasing leverage that the Medicare/Medicaid programs (and USMil) provide-- but to deregulate (?) and encourage market forces by fast-tracking FDA approvals.


Or... something like that. 


Unclear how all of that will work (or not) or whether it will work, and what else it might do from a consumer standpoint. 


Personally,--

I'm wary.  Since fast-tracking became a thing in the wake of a push for HIV meds/treatments, it has been a decidedly mixed bag, and big pharma has NOT actually responded very well to need in the market... but to financial interests.   This is why Viagra exists, and things like a generic autoinjector  for so long did not, and why new antibiotic drug development stalled.   

Well, when everyone was up in arms about the epi-pen, a bunch of memes came out about how unfair it was that the same tech was being used to save heroin users for free. Common, ethical folk took those memes to mean the epi should be free. The drug companies just took it as a missed opportunity.

 

https://www.scientificamerican.com/article/massive-price-hike-for-life-saving-opioid-overdose-antidote/


Obviously-- this is the same TECHNOLOGY that we rely upon in autoinjector devices which deliver epinephrine.

The underlying common theme is price gouging.  Neither drug is new.  The technology was developed by the military to deliver nerve gas antidotes in forward positions.  In other words, pharma R&D didn't invest in the basic technology to begin with-- not really.

What that means, ultimately-- is that there is simply NO justification for the pricing schemes-- and I mean, industry-wide, with ANY auto-injector medication which has FDA approval-- in which the stakes are 'have this or die.'

They are doing it because THEY CAN... and because they know that anyone who needs it-- will literally pay anything to have it.  Because.... life or death, YK?