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Kaleo undeterred by Mylan's trevails over EpiPen pricing, employing same controversial strategy for Auvi-Q

Jan. 19, 2017 1:05 PM ETViatris Inc. (VTRS) StockSNY, BHC, AMRX, VTRSBy: Douglas W. House, SA News Editor11 Comments
  • Privately held kaleo appears unconcerned about the potential fallout over its pricing strategy for EpiPen competitor Auvi-Q (epinephrine injection, USP) 0.15 mg/0.3 mg auto-injector. Its plan mirrors the now-discredited and much-reviled method used by Mylan (MYL -0.9%) and Valeant Pharmaceuticals (VRX -0.1%) of setting an exorbitant list price ($4,500) for the product with reimbursement activities managed by specialty pharmacies.
  • Kaleo defends its approach by saying patients who have commercial insurance will pay $0 for Auvi-Q whether their insurer pays or not. It also plans to give the product away to families with annual incomes less than $100K. For people paying cash who do not quality for free product, the price will be $360. In other words, the insurers who do reimburse will have to base their payments on the $4,500 price which will finance the giveaways.
  • Kaleo first launched Auvi-Q with Sanofi (SNY -1.5%) in 2013 at about the same price as EpiPen but it was later withdrawn due to manufacturing problems it says it has now fixed.
  • Analyst Richard Evans opines, "It's a very weak position. If I'm a payer I'm just going to block the product. I'm not going to pay for it. If you're going to give it away, fine. Knock yourself out. What is my motive to pay $4,500 or any derivative of $4,500?"
  • Impax Labs' (IPXL -1.6%) generic version of EpiPen, called Adrenaclick, presents another impediment to Auvi-Q sales. It intends to sell its product for $109.99/two-pack. Commercially insured customers will be eligible for a $100 coupon that will lower their out-of-pocket costs to $9.99.
  • Source: Barron's

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