EpiPen Price Hikes and Public Action

by Jeremy Winograd on February 1, 2017

EpiPen price hikeDuring this past year’s hot button political season, Big Pharma took plenty of heat from all sides for the rising cost of life-saving drugs. It’s easy to understand why. When faced with an impossible choice between paying outrageous markups for necessary drugs or foregoing the purchase and putting one’s own well-being at risk, individual consumers can begin to feel helpless. Economic principles of supply and demand don’t always apply in such situations – being forced to put a price tag on your own life isn’t exactly the same as buying a new car or deciding whether to get your morning egg and sausage on a bagel or a croissant. So in instances where economic pressures may be inadequate to impact pharmaceutical companies’ pricing decisions, only through collective political pressure is it be possible to affect positive change.

This all played out in illustrative fashion in recent months surrounding controversial hikes in the price of the EpiPen. The massive global pharmaceutical company Mylan first acquired the rights to sell the pre-loaded epinephrine-containing injection device, which counteracts severe, life-threatening allergic reactions, a decade ago. They initially charged pharmacies approximately $100 for a two-pack. Since then, however, Mylan incrementally raised that priceuntil it had ballooned to over $600 in 2016. While this substantial cost was often diminished on the consumer end thanks to insurance payouts and $100 coupons that Mylan offers, for many allergy-sufferers with either high-deductible plans or no insurance—not to mention EMTs with tight hospital budgets to contend with—it was simply prohibitive. Add that to the fact that around the same time, Mylan came under scrutiny for possible Medicaid fraud tied to misclassifying the EpiPen as a generic drug in order to pay lower rebates, and the company was suddenly in hot water.

From an economic standpoint, consumers had little recourse. There were very few viable generics or alternative brands on the market, meaning there wasn’t much of an option to “shop around” (you know… the entire basis of capitalism). So they could either pay the huge sticker price for EpiPens, or resort to a few legitimately dangerous options: save and use expired EpiPens, purchase epinephrine directly and manually fill syringes with it (which is difficult to do correctly and safely), or simply forego the medicine altogether and risk death by peanut, et al.

Fortunately, from a democratic standpoint, Americans had another effective tool in their arsenal: public outcry. And in the case of Mylan’s price gouging, it was swift and loud. A series of petitions demanding that Mylan lower their EpiPen prices brought major media attention to the issue. One such petition, on change.org, has over 200,000 signatures to date. Another, with 500,000 signatures, was delivered directly to Mylan’s Canonsburg, Pennsylvania headquarters by protesters. This scrutiny forced responsive action on several fronts. First, Mylan announced plans to begin selling a generic version of the EpiPen for $300 – still a significant increase over the brand name price when Mylan first acquired it, but still half of what it costs now. Next, compelled by the will of its constituents, Congress summoned Mylan CEO Heather Bresch for a hearing in front of the House Oversight Committee in September. In a true miracle of bipartisanship, members of Congress on both sides of the aisle chastised Bresch for the EpiPen price hikes and the large increases in her own personal compensation that have mirrored it (she made $18 million in 2015). Shortly thereafter, Mylan’s competitor, Kaleo, announced plans to reintroduce its EpiPen alternative, Auvi-Q, back on the market in 2017 at affordable prices (it was recalled in 2015 due to functionality issues; it’s set to hit the shelves again in February).

As one might expect, all this commotion has hurt Mylan. Ironically, thanks to public action, a move the company made aimed at increasing profits has ultimately turned out to be bad for business. On top of a $465 million settlement with the Justice Department over the aforementioned alleged Medicaid fraud, one analyst estimates that Mylan will lose $800 million over the next two years as major purchasers and insurers—such as CVS and Cigna—have begun offering or covering substantially cheaper, previously less easily obtainable EpiPen alternatives like Impax’s Adrenaclick. Even beyond the hit the company’s bottom line is taking, it isn’t exactly good for Mylan’s brand to be associated, fairly or not, with putting average people’s lives at risk for selfish financial gain. It’s this same type of public perception that doomed former Turing Pharmaceuticals CEO Martin Shkreli to “pharmacy bro” ignominy.

As a pharmacist, you too can be part of this kind of public action against unfair drug prices. If you are a community pharmacist, then really be a part of your community – let your patients and customers know you are on their side by speaking out against price gouging.

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