Payers block Kaléo's expensive EpiPen challenger

Kaléo plans to relaunch its epinephrine autoinjector, Auvi-Q, next month.

So much for the idea of offering patients an EpiPen alternative at no cost and then pushing the expense elsewhere. At a list price multiples higher than its competition, Kaléo Pharma’s revived Auvi-Q has hit resistance from some of the nation’s top pharmacy benefit managers and insurers.

Cigna has said no to the idea, while Humana is not talking to the company and Aetna is restricting its product for now.

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A spokesperson told FiercePharma that Cigna has “no plans” to add Auvi-Q to its list of covered drugs. The injector’s price “far exceeds that of epinephrine alternatives with the same expected medical results,” she said.

Kaléo reintroduced its Auvi-Q last week at a list price of $4,500 for a two-pack in an effort to capture some market share from Mylan’s EpiPen, which is listed at about $600 for a two-pack. Auvi-Q is set to launch next month.

Under Kaléo’s pricing strategy, Auvi-Q will cost most patients $0 out-of-pocket. If an insurer refuses to cover the med, the company will step in and pay for that access, execs said last week. Uninsured patients can purchase the drug at a cash price of $360 for a two-pack.

Instead, the strategy shifts the costs to insurers and pharmacy benefit managers. Kaléo CEO Spencer Williamson told reporters during a conference call last week that multiple insurance plans have signed on to cover the product and that he expects the list to “continue to grow.” He declined to name any, however.

When asked whether Auvi-Q will actually cost the healthcare system more than any competing rival, Williamson said Kaléo believes “the most important price is the price to the patient.”

But payers don't seem to be buying it. Humana and its PBM have not "engaged in any discussions with Kaléo regarding Auvi-Q ... as we are not supportive of its U.S. pricing strategy at this time," according to a spokesperson. Aetna is placing the Kaléo product on a “restricted coverage level until a final formulary coverage is determined,” a representative told FiercePharma.

A spokesperson for leading PBM Express Scripts said the Auvi-Q announcement is "another egregious pricing scheme that will attempt to gouge payers and damage our healthcare system." The company's experts are reviewing the product, she said. Optum, according to TheStreet, doesn’t plan to purchase the autoinjectors.

Mylan benefits in two ways from Kaléo's strategy, Bernstein analyst Ronny Gal wrote in a note on Monday. One, he said, is optics. "Kaléo makes them look good, in a relative sense," Gal wrote. Another is that Kaléo is likely focused on "permissive plans" as its autoinjector isn't likely to reach 10% market share. Gal wrote that Mylan CEO Heather Bresch "needs to send some flowers."

Sanofi previously marketed Auvi-Q through a partnership with Kaléo and voluntarily recalled the product back in November 2015 for dosing problems. The French pharma later canceled the deal and returned the rights to Kaléo.

In response to a swell of public and political scrutiny over repeated price hikes on the lifesaving EpiPen, Mylan recently launched an authorized generic at half the price of the original. Cigna has dropped the branded EpiPen from its coverage list, instead pushing patients to the authorized generic or a cheaper option from Impax Laboratories.

CVS, for its part, this month said it’d sell the Impax rival at a cash price of $109.99 for a two-pack.

Editor's note: This story was updated with comments from Express Scripts.


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