The maker of EpiPen announced Thursday that it will help more patients pay for the lifesaving allergy injection, bowing to intense criticism from politicians, doctors and patients over the drug’s soaring list price.
Mylan’s decision to offer patients a coupon and expanded financial assistance was criticized by politicians and insurers who called the move a superficial gesture that still leaves some patients and their health plans saddled with the full cost.
“This step seems like a PR fix more than a real remedy, masking an exorbitant and callous price hike,” said Sen. Richard Blumenthal, D-Connecticut, who this week called on the Senate Judiciary Committee and the Federal Trade Commission to investigate Mylan. “The only fair and effective relief is a substantial price reduction for everyone who needs access to this lifesaving drug.”
A two-pack of the injectors, which release epinephrine to stop an allergic reaction, has risen from less than $100 in 2007 to $608 today. Mylan said the company never intended for patients to pay the full price, expecting insurers would carry the load.
“We recognize the significant burden on patients from continued, rising insurance premiums and being forced increasingly to pay the full list price for medicines at the pharmacy counter,” chief executive Heather Bresch said in a statement.
Mylan declined to comment about criticism of its coupon offer and additional financial assistance.
The debate is the latest to embroil Congress in the battle over increasing drug costs and their role in escalating health insurance premiums. EpiPen’s rising price is particularly notable because state and federal legislation have been key to the drug’s rapid growth. Annual prescriptions for EpiPen products have more than doubled in the past decade to 3.6 million, according to IMS Health data.
Mylan benefited from factors including failed competitors, patent protections and laws requiring allergy medications in schools. Having a virtual monopoly has facilitated the rapid price hike. Mylan reached $1 billion in sales for the second time last year.
Epinephrine is an old drug, but EpiPen has long been the dominant way of injecting it – competitors’ products have never gained the same traction and suffered setbacks.
“It’s like Kleenex – it’s even more dominant,” said Wayne Shreffler, chief of pediatric allergy and immunology at Massachusetts General Hospital. “I think academics like me are very careful when speaking to say ‘epinephrine autoinjector,’ but for most of the community, they just say EpiPen.”
Mylan lobbied lawmakers – both directly and indirectly – to increase the availability of epinephrine autoinjectors in U.S. schools. Although these legislative efforts were not supposed to benefit a particular company, the brand has such a lock on the market that when President Barack Obama signed the School Access to Emergency Epinephrine Act in 2013, a news announcement simply called it the “EpiPen Law.”
The law gave financial incentives to states to enact their own mandates for schools to stock epinephrine autoinjectors, and allow trained school personnel to administer the treatment to students. Undesignated autoinjectors can be used on students even if the prescription is not in their name.
“That was a Trojan horse,” said David Maris, a Wells Fargo analyst. “That was, ‘Let’s get it in schools to help people,’ but it helps market EpiPen and promote it as the trusted product in schools.”
Eleven states require schools to stock epinephrine, according to Food Allergy Research & Education, an allergy advocacy group that counts Mylan as one of its corporate sponsors.
A provision in the Federal Aviation Administration reauthorization bill that passed the Senate in April requires the agency to update its regulations to ensure that airlines carry epinephrine autoinjectors on board.
In 2012, Mylan announced the EpiPen4Schools program, providing the drug for free, which doctors said created a kind of social marketing pressure. Since then, it has given away more than 700,000 free EpiPens to schools nationwide.
In 2014, the company struck a deal with Walt Disney Parks and Resorts to increase anaphylaxis awareness – creating a website and developing storybooks for families living with severe allergies that were distributed in 2015, according to Mylan’s Securities and Exchange Commission filing.
“Their most brilliant maneuver, clearly, was giving them [EpiPens] away to schools and making it the thing that they could say, ‘Well, the nurse knows how to use it,’” said R. Adams Dudley, a pulmonologist at the University of California at San Francisco. “What are the parents afraid of? Their child will be away from them, and they won’t be there to use it. If they can say the school nurse knows how to use an EpiPen; she’s never seen an Adrenaclick. ... It’s just a fear thing.”
When Mylan acquired EpiPen in 2007, the total market for epinephrine was around $207 million a year according to IMS Health. Even then, EpiPen was dominant, with its products accounting for nearly 90 percent of the sales. Another similar product, the Twinject, had just $10 million in sales, and physicians said the device was a little clumsier and not as appealing to patients.
Competitors have fizzled over the years. The Twinject was discontinued in 2012. The Auvi-Q was recalled in 2015 because of the danger it would administer the wrong dose. The Adrenaclick has a tiny market share, according to IMS Health data.
Teva Pharmaceutical Industries is developing a generic autoinjector, but it was rejected by regulators earlier this year for unspecified “major deficiencies,” according to a spokeswoman, which will delay the launch until at least 2017.
The pattern of large, biannual price increases for EpiPen began in 2009. In an earnings call that year, Bresch, Mylan’s chief executive, told investors that the company would be introducing a new version of EpiPen’s autoinjector device, one with patent protection that would make it more difficult for a generic competitor to enter.
The month that the company launched the improved product, Mylan boosted the list price of the drug by 20 percent.
“Having a new version of the drug ... you’re essentially wiping the slate clean – if any generic company wants to create a generic version, they’re going to have to start a lawsuit,” said Jacob Sherkow, an associate professor at New York Law School. “You get to start the pricing strategy process all over again.”
Lesley Solomon, a parent from Brookline, Massachusetts, with a 7-year-old son with severe food allergies, said the EpiPen has saved her son’s life multiple times.
She’s never tried another type of injection device.
“I knew that EpiPen worked for us, so there was no reason to try something else – so there’s the trust factor you get in knowing something works for you. Why try something new?” Solomon said.
Even so, she’d like a better solution. EpiPens expire. They have to be kept at a certain temperature, meaning they can’t be left in a car. She said she’s excited by a Massachusetts start-up, Windgap Medical, which is trying to build an alternative.
Today, some of the congressional champions of laws to encourage stocking EpiPens in schools are among Mylan’s harshest critics.
Sens. Mark Warner, D-Virginia, Amy Klobuchar, D-Minnesota, and Bernie Sanders, I-Vermont, who were among the co-sponsors of the 2013 legislation, are demanding Mylan lower the price of the EpiPen and explain its pricing practices.
“I am deeply concerned about this significant price increase for a product that has been on the market for more than three decades, and by Mylan’s failure to publicly explain the recent cost increase,” Warner wrote in a letter to Bresch.
Bresch is the daughter of Sen. Joe Manchin III, D-West Virginia. Manchin had largely stayed quiet this week as his Senate colleagues expressed outrage over EpiPen costs, but on Thursday, he issued a statement acknowledging their concern about high drug prices – but without directly criticizing Mylan.
“I am aware of the questions my colleagues and many parents are asking and frankly I share their concerns about the skyrocketing prices of prescription drugs,” Manchin said.
