Why do they do it? Because they can– and because we let them!
Mylan, the manufacturer of the EpiPen, an auto-injector used to inject epinephrine beneath the skin, has raised the price of its product some 800% between 2009 and 2016. The active drug itself is a traditional generic that costs very little. Mylan has copied a business model of buying a standard drug that is essential for some and jacking up the price to more than what desperate people are willing or able to pay. It was easy to do so because Mylan lost its major competition and because individuals with “good” health insurance are insulated from having to pay the full price in the drugstore. The price of the usual prescription for EpiPen is reported to have risen from $100 in 2009 to around $600 today. The pricing of this medical device that makes it convenient to carry and administer epinephrine is another of the innumerable examples of the failure of our healthcare system to protect the interests of individuals with medical needs and to tolerate predation such as this.
One of the scariest things that can happen to a person with certain allergies such as too fish, peanuts, or insect sting; is to have an anaphylactic attack as a result of the exposure. In this systemic allergic reaction, the body’s defense mechanisms get activated both inappropriately and excessively with the result that among other things, the airways of the lung constrict making breathing difficult and blood pressure falls. For people with these severe allergies, a peanut can be fatal. Fortunately, when treated immediately with a shot of epinephrine, the systems can be reversed. This means however, that the vulnerable individual must have this injectable drug on their person or immediately available. In the past, this meant carrying around an ampule or bottle of epinephrine and a separate syringe and needle. As with insulin, to simplify administration, pre-filled auto-injector pens containing a single dose became a commercially available. The most heavily marketed and used such device is the EpiPen.
EpiPen in Medicare and Medicaid.
When I first learned of the the pricing issues with the EpiPen, I looked at the drug databases most available and familiar to me: the Medicare and Medicaid drug utilization databases, and the now- abandoned 2013 National Average Retail Price database. These confirm the rising price of EpiPen, the lack of penetration of less expensive potential alternatives, and the limited ability of even the pharmacy benefit managers that administer the Part-D Drug program to intervene on the behalf of their beneficiaries.
The EpiPen is almost always sold as a two-pack. It is available in two strengths of epinephrine for adults and children. In 2013, the average retail price for either strength was $248 for the 2-pack. In the 2013 Medicare Part-D drug utilization and cost database, the total price per prescription paid by insurer and patient was $267. In that calendar year, the Part-D program paid a total of $64.0 million for 239,918 EpiPen prescriptions and refills for a calculated $267 per prescription. In the Medicaid program for calendar 2014, the price per prescription was $207. In the recently released CY2014 Medicare Part-D database, the cost per prescription had risen to $360. The aggregate amount paid by Medicare that year for 212,218 unique beneficiaries was $87.5 million, ranking 260th out of 3362 different drugs in total cost to the program.
Below are the data for epinephrine in 2014 Part-D which enable additional points to be made. (Click to enlarge.)
1. Simple liquid preparations of epinephrine (Adrenalin) is just plain cheap.
2. Somehow a handful of people received a single Epipen injector. This was not standard.
3. EpiPen had two alternative competing auto-injector products. After EpiPen, Auvi Q, (introduced by the Sanofi company in 2013) was the second most prescribed device costing even more at $400 per pair. Because there were problems with Auvi Q delivering the expected dose of drug, it was pulled from the market in 2015 and subsequently abandoned. Following the withdrawal of its main competitor, Mylan had no meaningful competition for its product in America– a perfect time to raise its prices further.
4. In 2014 a third product, Adrenaclick, was available as a two pack costing $241 per prescription but it was used only a handful of times by this population of patients. It had issues with recalls in 2013 that may have affected its attractiveness to prescribers and patients alike, but it is still available. The useful website GoodRx today lists a typical cash price for Adrenaclick at around $450 per 2-pack compared to $730 to $840 cash price for EpiPen.
5. Just because there are alternative products, the practice of “shadow pricing” does not mean that they will be less expensive.
Apparently there are one or more generic versions of self-injectable epinephrine in the FDA/product pipeline but these are not expected to be available for a year or so if at all. Congress and pharmacy-benefit managers have been either powerless or uninterested in doing much to do much on behalf of their constituencies or consumers.
In response to considerable public outrage in social and traditional media, Mylan points to their coupons that decrease or eliminate copays by the patient at the drugstore. In any event, the insurer is still paying a bundle and this cost shows up in the premiums we all pay. If I as a physician routinely excused my patients from their copay, I might go to jail. I have always wondered how it is that the drug companies can do so legally. In any event, a system that depends on coupons or rebates available to those lucky enough to find them is a cosmetic that only props up a pricing structure unrelated to cost of production and which is is abusive to patients and payers alike. As usual, those not covered by some form of health insurance are denied any protection at all and are confronted with the full price.
In my opinion, Mylan has adopted the despised business model of Turing Pharmaceuticals which purchased and raised the price of the previously cheap anti-parasitic drug Daraprim from $13.50 to $750 per tablet. A photograph of a Turing executive was portrayed as the “face of greed.” I contend that there are many other candidates for this title.
Why is it we are so reluctant to make changes to a healthcare system that serves us so poorly?
Peter Hasselbacher, MD
Emeritus Professor of Medicine, UofL
26 Aug 2016