In the midst of what essentially is a public relations nightmare, and facing increasing scrutiny from U.S. lawmakers, drugmaker Mylan announced it will now sell a generic version of its own life-saving allergy treatment EpiPen for half the list price of its brand-name treatment. The announcement does not seem—at least for now—to be received well.
Mylan has aggressively defended multiple price increases over the years that have resulted in the company listing a two-pack of EpiPens at about $600—up from $100 in 2007. This is important to note because the pens expire, which means people with allergies must purchase a two-pack of EpiPens annually. If they do use a pen, they must then buy a replacement pack immediately.
EpiPen has a 94 percent market share for auto-injector devices. The company’s chance to raise prices for the EpiPen came when its sole market competitor, Sanofi, voluntarily recalled its own autoinjector following miscalibration issues. Without that competition, Mylan made several cost increase moves. In the meantime, an anticipated generic competitor from Teva Pharmaceutical failed to pass US Food and Drug Administration testing, leaving the market mostly to Mylan.
The dramatic price increase has drawn considerable notice as well as growing criticism. In an attempt to stem the tide, Mylan announced it would reduce the out-of-pocket costs of its allergy injection for some patients. The list price of the drug will remain the same, but the company said it would increase the maximum copay assistance program to $300 from $100 for patients who pay for the EpiPen two-pack in cash or who are covered by a commercial health insurer.
That move was met with criticism from 20 U.S. lawmakers, who in a letter to CEO Bresch, daughter of Senator Joe Manchin of West Virginia, asked the company to spell out the company’s programs to provide some people with lower cost EpiPens. Such discount programs are often an “industry tactic to keep costs high through a complex shell game,” the letter said, Reuters reports. “Insurance companies, the government and employers still bear the burden of these excessive prices. In turn, those costs are eventually passed on to consumers in the form of higher premiums,” the senators wrote.
Mylan has announced it will also market the generic treatment.
In explaining the situation in an interview on CNBC, Bresch didn’t seem to help the company’s case. First she blamed the “broken” health-care industry, then added that “no one’s more frustrated than me.”
It actually seems many consumers are extremely frustrated, as are both Republican and Democrat lawmakers. Leaders of the U.S. House Committee on Oversight and Government Reform have launched an investigation into EpiPen price increases, an article in USA Today reports. Committee chairman Jason Chaffetz, R-Utah, and ranking member Elijah Cummings, D-Md., requested numerous documents from Mylan, including details of EpiPen profits and sales, lobbying data, internal cost figures and federal health reimbursement numbers.
Mylan has “a virtual monopoly over the epinephrine auto-injector market,” the lawmakers wrote in a letter to Bresch. “While families and schools are struggling to keep up with your company’s unreasonable price increases, Mylan has profited richly from its pricing strategy.”
The committee's letter, which requested a briefing by Sept. 6 and documents by Sept. 12, paves the way for a potential congressional hearing on the matter.
In the meantime, the question remains whether or not consumers will actually pay less for the generic version. If patients don’t see cost savings and are still paying high amounts for EpiPens, Mylan can say “We lowered the price and this is on insurers and pharmacy benefits managers,” Walid Gellad, who heads the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh, says in a Bloomberg article.
What are your thoughts on this situation? Are the EpiPen price increases justified? Does the fault indeed lie with what Bresch calls the “broken” health-care industry that, she claims, “incentivizes” higher prices?