August 24, 2016

400% spike in cost of lifesaving EpiPen sparks controversy

Daily Briefing

    Drugmaker Mylan has increased the price of the EpiPen by about 400 percent since it acquired the lifesaving medication, sparking calls from federal lawmakers for an investigation of the price hikes.

    EpiPens deliver a pre-measured dose of epinephrine, a treatment that can reverse symptoms of severe allergic reactions, including the swelling and closure of airways people need to breathe.

    The epinephrine itself costs less than a dollar a milliliter in developing nations, Aaron Carroll writes for the New York Times' "The Upshot." But EpiPens ensure the treatment is administered quickly and in the proper dosage needed to save lives. More than 3.6 million prescriptions were filled in the United States last year for two-packs of EpiPens, according to the Associated Press. Because epinephrine is unstable, EpiPens generally need to replaced each year.

    Price spike

    Mylan acquired EpiPen in 2007. At that time, a set of two EpiPens cost pharmacies less than $100. According to the Times, physicians recommend that individuals with severe allergies carry two EpiPens at all times, and FDA in 2010 recommended that EpiPens be sold in packages of two.

    Mylan has repeatedly increased the price of EpiPens over the years. In 2009, pharmacies paid $103.40 for a two-pen set. Between July 2013 and May 2015, the price increased by 75 percent from $264.50 to $461. By May of this year, the price had increased again to $608.61 for a two-pen set. All told, adjusting for inflation, since 2007 Mylan has increased the price of EpiPens by about 400 percent.

    Not all patients pay the full price: Medicaid, the Department of Veterans Affairs, and private insurers often negotiate discounts, and insurers often cover some of the costs. Mylan also noted that it offers a copay discount card that can save patients $100 and that its EpiPen4Schools program since 2012 has provided schools with more 700,000 EpiPens at no cost.

    But patients without insurance or with high-deductible plans have "been hit with sticker shock" by the price increases, Ariana Eunjung Cha reports for the Washington Post.

    Lack of competition

    Competition from other drugmakers would decrease EpiPen's price, Carroll notes, but he adds that "it's very hard to bring [a similar device] to market." Several similar products have been pulled from the shelves or discontinued in recent years, in part over concerns about whether they administered proper doses.­

    There is still one alternative treatment: Adrenaclick, which is about $150 cheaper compared with the EpiPen. But Carroll says many insurers don't cover it, some believe it is harder to use, pharmacists can't fill an EpiPen prescription with the alternative, and "few physicians think of it."

    Congressional inquiry

    Lawmakers have responded to the price increases with calls for hearings and answers.

    In a letter sent Monday to Mylan, Sen. Chuck Grassley (R-Iowa) demanded information about the price hikes.

    Grassley wrote, "The substantial price increase has caused significant concern among patients." He continued, "In the case of EpiPens, I am concerned that the substantial price increase could limit access to a much-needed medication," adding, "In addition, it could create an unsafe situation for patients as people, untrained in medical procedures, are incentivized to make their own kits from raw materials."

    Separately, Sen. Amy Klobuchar (D-Minn.) on Monday called on the Federal Trade Commission to investigate Mylan's price increases and whether they violated antitrust regulations and called for the Senate Judiciary Committee to review the price hikes.

    What hospitals can learn from the Martin Shkreli scandal

    In addition, Rep. Grace Meng (D-N.Y.) on Monday sent a letter to leaders on the House Oversight and Government Reform Committee requesting a full committee hearing on EpiPen's rising costs. Rep. Elijah Cummings (D-Md.), the committee's ranking member, in a statement said that committee staff have scheduled a call with Mylan and that the panel is considering holding a hearing on the matter in September.

    Mylan response

    Mylan in a statement said that the price increases have been driven in part by product improvements.

    "Mylan has worked tirelessly over the past years advocating for increased anaphylaxis awareness, preparedness, and access to treatment for those living with potentially life-threatening (severe) allergies," the company said in a statement.

    The drugmaker said that the increase in high-deductible plans "has presented new challenges for consumers, and they are bearing more of the cost." Mylan added, "This change to the industry is not an easy challenge to address, but we recognize the need and are committed to working with customers and payors to find solutions to meet the needs of the patients and families we serve" (Bartz, Reuters, 8/22; Parker-Pope/Rabkin Peachman, "Well," New York Times, 8/22; Hulse, New York Times, 8/23; Sullivan, The Hill, 8/22; Rubenfire, Modern Healthcare, 8/22; Wheeler, The Hill, 8/23; Carroll, "The Upshot," New York Times, 8/23; O'Donnell et al., USA Today, 8/23; Kliff, Vox, 8/23; Willingham, Forbes, 8/22; Johnson, Associated Press, 8/24; Eunjung Cha, "To Your Health," Washington Post, 8/23).

    Providers are facing price questions, too. Here's how to recognize the risk of price sensitivity in your market.

    The era of price transparency has arrived for hospitals and health systems. These days, pressure on prices can come from several directions: patients, payers, or market conditions.

    Review our infographic to examine whether or not your market is price sensitive.

    DOWNLOAD THE INFOGRAPHIC

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