Kaleo, a Virginia pharmaceutical company, raised the price of its opioid antidote by more than 600 percent in 2016 to "capitalize on the opportunity" as the nationwide epidemic worsened, according to a report released by a subcommittee chaired by Ohio Republican Sen. Rob Portman cited by Cleveland.com.
But Kaleo claims it's never turned an annual profit on the drug.
The hefty price hike of Evzio by Kaleo increased costs to taxpayers by more than $142 million in the last four years, according to Cleveland.com.
"The fact that one company dramatically raised the price of its naloxone drug and cost taxpayers tens of millions of dollars in increased drug costs, all during a national opioid crisis, no less, is simply outrageous," Mr. Portman told Cleveland.com.
Kaleo raised the prices on the recommendation of drug industry consultant Todd Smith, according to the report. Although the drugmaker said its production cost for the drug is $174 per unit, Mr. Smith proposed raising the price of the drug in 2016 from $575 per unit to $3,750 per unit and later, up to $4,100.
To ensure the drug would continue to be covered by government insurance programs, despite the price hike, the company's salesforce allegedly focused on making sure physicians signed paperwork that determined Evzio to be medically necessary, the report claims.
"Kaleo's more than 600 percent price increase of Evzio not only exploits a country in the middle of an opioid crisis, but also American taxpayers who fund government-run healthcare programs designed to be a safety net for our country's elderly and most vulnerable," the report said, according to Cleveland.com.
The report recommends CMS review its policies to prevent drug companies from influencing physician prescribing habits. In addition, it calls on Congress to mandate a three-day limit on opioid prescriptions to curb addiction rates.
Kaleo said it gives away a lot of the opioid antidote to first responders and it has "never turned an annual profit on the sale of Evzio. Patients, not profits, have driven our actions."