Company raised prices on drug used to revive victims

WASHINGTON –

A report released Sunday by Sen. Rob Portman accuses a major drug company of taking advantage of the opioid epidemic to dramatically raise the price of a drug used to revive people who have overdosed on opioids.

The report charges the pharmaceutical company Kaleo increased the price of the Naloxone drug EVZIO by more than 600 percent by 2016. The report also charges the company encouraged physicians to make certain the drug was paid for taxpayers who finance Medicaid and Medicare.

The drug does not cure addiction to opioids. But it can save lives by reviving people who are near death from opioid addiction.

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The report by the Senate Permanent subcommittee on investigations – which is chaired by Portman – was made public Sunday during the regular broadcast of CBS's "60 Minutes." Portman's staff made the report available to CBS before providing it to Ohio news organizations.

Portman, R-Ohio, said in a statement that "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 . "

Portman said the subcommittee "will continue its efforts to protect taxpayers from drug manufacturers that are exploiting loopholes in the Medicare and Medicaid system in order to profit from a national opioid crisis."

The synthetic opioid drug fentanyl killed 3,431 people in Ohio last year.

The report charges that to boost "sluggish sales" of EVZIO at its price of $ 575, the company "implemented a new distribution model proposed" by a consultant "that increased the price by more than 600 percent by 2016."

In addition, the report accuses Kaleo's sales force of trying to make sure doctors' offices signed necessary paperwork indicating that EVZIO "was medically necessary, which ensured the overdose reversal drug would be covered by government programs like Medicare and Medicaid."

The price markup by Kaleo was reported earlier this year by Bloomberg News. Any drugs covered on drug lists called formularies are approved for coverage by pharmacy benefit managers or PBMs.

Those PBMs are hired by health care companies with the promise they keep drug costs low. But PBMs receive rebates from drug manufacturers for putting drugs on the formularies.

Company officials could not be reached for comment. But in an opinion piece last May for USA Today, Spencer Williamson, president and chief executive officer of Kaleo wrote "no patient has to pay thousands of dollars out of pocket for EVZIO."

(Lucas Sullivan of the Columbus Dispatch contributed to this story.)